Document:

Exhibit 10.16

 

Agreement

 

STEINWAY & SONS

 

WITH

 

LOCAL 102, F.W.

 

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

 

 

OCTOBER 1, 2003

 

 

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

 

WITNESSETH:

 

  WHEREAS, it is
the intent and desire of both the Company and the Union to cooperate with each
other in the administration of the provisions of this Agreement in order to
achieve more stable and desirable conditions of employment for the employees
covered hereby and more harmonious and profitable operations for the Company;

 

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

 

ARTICLE
1.

EMPLOYEES
COVERED BY THIS

AGREEMENT

 

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

 

ARTICLE
2.

UNION
SECURITY

 

A. Present Employees who are
members of the Union shall remain members in good standing for the duration
of  this Agreement as a condition of
employment.

 

B. Present Employees who are
not members of the Union and new Employees shall become members of the  Union thirty (30) days after the date of
hiring, and remain members in good standing for the duration of this Agreement
as a condition of employment.

 

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

 

D. An Employee shall be
deemed in good standing hereunder as long as such Employee pays his or her
initiation fee and monthly Union dues as they come due.

 

E. The Company shall have the
right to obtain new Employees from any possible source whatever, except,
however, the Company shall notify the union of any vacancy or vacancies and
give to the Union an opportunity to send its members to become applicants for
such vacancies.   The Company agrees
that it Will not discriminate against any applicant sent by the Union.

 

F. The Union agrees to accept
all new Employees as members without limitations, provided such Employees
remain in good standing.

 

ARTICLE
3.

CHECK-OFF

 

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

 

2

 

ARTICLE
4.

STRIKES
AND LOCKOUTS

 

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

 

B. The Union shall not
authorize or engage in, nor shall Employees engage in, any Stoppage, and the
Company shall not lock out said Employees.

 

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

 

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

 

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

 

ARTICLE
5.

SAFETY
AND HEALTH

 

  The Company
agrees to abide by all Federal, State and Municipal rules and regulations for
the safety and health of its Employees.

 

ARTICLE
6.

SHOP
RULE CHANGE

 

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

 

ARTICLE
7.

TRIAL
PERIOD

 

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

 

ARTICLE
8.

DISCHARGE
OF EMPLOYEES

 

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

 

3

 

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

 

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

 

ARTICLE
9.

INJURED
AND AGED EMPLOYEES

 

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

 

  Any Employee, not
otherwise compensated therefor by insurance, shall, if injured on the Company
premises in the course of his work and in the sole, conclusive opinion of the
Company’s doctor, be unable to continue for the balance of the day, be entitled
to pay for the balance of one (1) full working day.

 

ARTICLE
10.

HOURS
OF WORK

 

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

 

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

 

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

 

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

 

(iii)   Service Employees working outside will not
be assigned work on a job-by-job basis. 
They will be required to call in at the beginning of each day and at the
end of each job, at which time they will be assigned their next job.

 

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

 

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

 

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

 

4

 

worked. If an Employee hired after the date of this Agreement moves his
or her residence after being hired and such relocation results in additional
travel, then the application of this subsection (vi) shall be in the discretion
of the Company.

 

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

 

E. The Company may at any
time reasonably require any Employee to work overtime. Any Employee with a
reasonable, bona fide excuse preventing working overtime shall not be required
to work such overtime. The Union and Company shall make reasonable efforts to
assist each other in effecting the intent that the Company’s production not be
unreasonably  impeded and due
consideration be given to individual Employee’s needs.

 

ARTICLE
11.

WAGE
RATES

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

D. Commissions The
Company will pay to any Employee a five percent (5%) commission on the invoiced
amount of any sale of service work brought to it initially by that Employee. In
order to qualify for the commission, the Employee must either personally write
the sale or provide the name of the customer and the item/service to be
purchased, prior to the Company’s knowledge of the sale. (i.e. after the first
claims against

 

5

 

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

 

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

 

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

 

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

 

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

 

ARTICLE
12.

NEW
OPERATIONS AND METHOD CHANGES

 

  The Company may
institute new operations and methods, and determine the skill classification
thereof within existing factory skill classifications, and work thereon shall
commence when and continue as long as the Company directs. Rates shall be
determined by the Company by comparison of time and skill with existing
operations and methods and the related hourly rate.

  If within thirty
(30) days of regular work commencing on such operation or method both parties
fail to present a written grievance regarding such rate, it shall be conclusively
deemed properly established. If a grievance is filed within such period, the
Employees shall continue to work at such rate until such grievance has been
finally determined, at which time, if the rate is increased, each Employee
shall be paid the amount of such increase for each hour worked by him at the
lesser rate. If the rate is decreased, the Employee shall, after the date of
final determination be paid at such new rate but no Employee shall be obliged
to refund any overpayment made. When a job previously performed by hand is
mechanized, the same shall be deemed a new method and subject to the foregoing
provisions.

 

ARTICLE
13.

TRANSFER

 

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

 

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

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

 

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

 

6

 

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

 

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

 

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

 

ARTICLE
14.

LEADPERSON
AND INSTRUCTORS

 

  The Union and
Company will agree as to each operation upon the instruction time to be
allocated for each break-in, such time to be graded in a reducing scale so as
not to cover the entire Trial Period. Until agreement or arbitration award to the
contrary, the Company’s time allocation shall control and shall be accepted by
Instructors. All agreements or awards shall, however be retroactive to the date
of filing grievance. While instructing, the Instructor shall receive as
compensation per hour his posted average hourly earnings plus 15¢ per hour
extra while instructing. No Employee may refuse to instruct another Employee in
his work without a good reason.

 

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

 

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

 

  The designated
lead person will receive as compensation $1.00 per hour above his posted hourly
rate.

 

  Leadperson
designation does not alter that employee’s status as an employee covered by
this agreement or seniority in any way, and may be transferred or ended based
on the Company’s determination of need.

 

  Leadperson
responsibilities do not include authority to discipline employees.

 

ARTICLE
15.

WORK
RECORDS

 

  Each Employee
shall record work performed, indicating quantity and description of, and hours
spent on, each unit of production. No records shall be accepted unless approved
by the foreman.

 

ARTICLE
16.

DIVISION
OF WORK AND SENIORITY

 

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

 

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

 

7

 

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

 

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

 

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

 

  Union delegates
shall, under similar limitations, have department-wide seniority and shall not
be subject to prior seniority of the other Union officials. This article shall
not apply to any Employee while on leave of absence.

 

ARTICLE
17.

ADJUSTMENT
OF GRIEVANCES AND DISPUTES

 

All disputes shall be settled
in the following order between:

 

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

 

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

 

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

 

(d) The respective executives
of the parties. In case of any dispute, work shall continue to be performed in
accordance with the Company position until such dispute has been fully
determined.

 

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

 

	
  At Step (a)

  	
   

  	
  1 working day

  
	
  At Step (b)

  	
   

  	
  5  working days

  
	
  At Step (c)&(d)

  	
   

  	
  10 working days

  

 

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

 

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

 

Any findings, decisions and
awards, including reinstatement, shall be binding and conclusive upon the
parties and judgment thereon may be entered in any court of the forum having
jurisdiction. The expense of the arbitrators’ fees, if any, shall be jointly
borne by the parties.  The expense of
stenographic minutes shall be borne by the party ordering same for its
exclusive use.

 

No award shall be retroactive
prior to the date of the formal Presentation in writing of any grievance by the
Union.

 

All Union grievances to the
date of the execution of this Agreement are deemed to have been settled and
determined.

 

8

 

All Union grievances or
disputes shall be deemed conclusively settled, determined and rejected unless
submitted to arbitration within thirty (30) days from the date they first
reached state (c) or (d) above.

 

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

 

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

 

ARTICLE
18.

VETERANS

 

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

 

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

 

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

 

ARTICLE
19.

HOLIDAYS

 

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

 

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

 

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

 

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

 

9

 

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

 

 

ARTICLE
20.

VACATION
AND CHRISTMAS BONUSES

 

A. Vacation.

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

 

	
   

  	
   

  	
  DAYS WORKED

  	
   

  
	
  Service as of June 1

  	
   

  	
  Less than

  80 days

  	
   

  	
  80 thru

  159 days

  	
   

  	
  160 days

  and over

  	
   

  
	
  0-6
  months

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  
	
  6
  mos. To 1 year

  	
   

  	
  0

  	
   

  	
  40
  hrs.

  	
   

  	
  40
  hrs.

  	
   

  
	
  1
  year thru 5 years

  	
   

  	
  0

  	
   

  	
  40
  hrs.

  	
   

  	
  80
  hrs.

  	
   

  
	
  5
  years thru 14 years

  	
   

  	
  0

  	
   

  	
  60
  hrs.

  	
   

  	
  120
  hrs.

  	
   

  
	
  15
  years thru 19 years

  	
   

  	
  0

  	
   

  	
  80
  hrs.

  	
   

  	
  160
  hrs.

  	
   

  
	
  20
  years and over

  	
   

  	
  0

  	
   

  	
  100
  hrs.

  	
   

  	
  200
  hrs.

  	
   

  

 

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

 

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

 

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

 

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

 

B. Christmas Bonus

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

 

10

 

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

 

C. Absences

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

 

D. Layoffs

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

 

ARTICLE
21.

ELIMINATION
OR CHANGE OF OPERATIONS

 

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

 

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

 

C. The parties recognize the
general principle between them that they will mutually cooperate to avoid the
elimination of a department or change of operation as the result of the
purchase of foreign parts. It is, however, recognized that this principle shall
not apply to any plant of the Company which may be situated abroad, to the
purchase of raw materials, incidental small parts or hardware not customarily
manufactured by the Company, or purchased by it within the United States,
regardless of place of origin, nor shall this principal apply to any other
purchases within the United States, regardless of the place of origin of the
article purchased nor to any other purchases outside the United States which
neither effects the elimination of a department or material change in
operation, or which is being purchased by the Company at any time that an
agreement between the parties hereto is made.

 

D. (i) The Company will give
the Union reasonable notice of its intent to change operations or to purchase
foreign parts where the effects of its action would be to permanently displace
an Employee from his current job. If requested , the Company will meet with the
Union to discuss its intended action. (ii) In any such discussion the Company
shall explain the reason why it needs to take any proposed action and the Union
may respond on the merits including the suggestion of any alternative action
consistent with the Company’s needs. The Company will consider such suggestion
before making the final decision. (iii) In the event that an Employee will be
permanently displaced from his current job because of a change in operations or
the Company’s purchase of foreign parts, the Company will make reasonable
efforts to find him another available job for which he is qualified within the
plant, including returning him to a prior position which may have held. His
rate for such job will be the rate commonly associated with the job. If no
available job exists, the Company shall lay the Employee off provided that
Company shall demonstrate legitimate business reasons for the change in
operations or the purchase of foreign parts. In the event that the Union and
the Company cannot agree that the Company had legitimate business reasons for a
change in operations or the purchase of foreign parts, this question shall be
submitted for binding arbitration.

 

11

 

ARTICLE
22.

TERMINATION
OF EMPLOYMENT

 

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

 

ARTICLE
23.

LEAVES
OF ABSENCE

 

Employees while on leave are
not deemed laid off and retain all seniority rights but acquire no benefits.
The business agent shall be deemed on leave during the term of his office or
this Agreement, whichever is shorter. No leave shall be longer than six (6)
months.  Employees must be employed for
more than sixty (60) days to be eligible for a medical leave of absence.
Employment will be terminated when an Employee is on a medical leave (including
Worker’s Compensation) for more than twelve (12) months unless the Employee has
at least seven (7) years service in which case employment will be terminated
when the Employee has been on a medical leave more than twenty four (24)
months.

 

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

 

All applications for leave
will be reviewed by a committee of four (4), two (2) appointed by the Company
and two (2) by the Union. Consideration will be given first to the need for
production in the applicant’s department, and the effect of his leave on other
departments.  Consideration will be next
given to the applicant’s length of service, the reason for leave, and his
record of prior leaves or absences.

 

The recommendation of a
majority of the committee shall be required for, and govern the right to, any
leave, and shall be binding upon all of the parties.

 

ARTICLE
24.

CALL-IN
PAY

 

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

 

ARTICLE
25.

INSURANCE

 

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

 

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

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

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

 

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

 

12

 

Such Insurance Fund shall be
a trust fund for the sole benefit of the Employees of the Company and of other
companies which similarly contribute to said Fund, for the purchase, or
provision by self insurance, of group Life Insurance, Group Accident, Death and
Dismemberment Insurance, Group Accident and Health Insurance, Hospitalization
Insurance and Group Surgical Insurance as the Fund’s Trustees determine to
provide.

 

To the extent that in the
manner above mentioned, the Company joins with other companies in the
Furniture, Bedding and Piano Industries, who have made or may make contracts
containing provisions similar to those set forth in this section, in
maintaining the said Fund, it being understood, however, that the Fund will be
held and managed by Trustees thereof under the terms and provisions of a
Declaration of Trust or Trust Agreement to which the Trustees of the Fund are
parties. It is further understood and agreed that the Company shall be under no
obligation to see to the application of monies paid to the Trustees pursuant to
this paragraph for the purposes and use above-mentioned.

 

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

 

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

 

ARTICLE
26.

PENSIONS

 

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

 

A. Said Fund shall be a plan
entitling the employer to a tax deduction as an ordinary expense under the tax
laws for any contributions made by it to said Fund certified by the
Commissioner  of Internal Revenue as tax
deductible under Section 162 of the Internal Revenue Code.

 

B. During any period that
piano work is frozen by Government order or authority, the Company’s
contribution to said Fund shall be made only as to Employees who had previously
been engaged in piano work and who continue to work for the Company during the
period of such freeze, and shall not be required to be made as to any other
Employees.

 

C. During the period a new
foreman retains his full seniority status as described in Article 13(D),
pension contributions for him will be held in reserve. If after such period,
the foreman continues in such capacity, he may apply for the ‘Withdrawal
Benefit” provided under Section IV D(1) of the United Furniture Worker’s
Pension Plan A. However, if the foreman returns to his prior position, the
reserve will be transferred to the United Furniture Worker’s Pension Plan A. No
other adjustments will be made in favor of the United Furniture Worker’s Plan
A., either at the time of promotion to foreman or in the event of demotion
after the one (1) year temporary

period.

 

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

 

ARTICLE
27

LAYOFF

 

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

 

13

 

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

 

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

 

In the event the Union and
the Company cannot agree that the Company had a legitimate business reason for
a lay-off or that the Company identified the proper Employees to be laid-off,
the Union retains the right to submit the question to binding arbitration.  If an Employee has been laid off, the work
performed by that Employee may not be performed by persons from another
category, department or operation for more than one (1) day per week without
the Union’s consent.

 

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

 

ARTICLE
28.

SHOP
CHAIRMAN

 

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

 

ARTICLE
29.

WAR
WORK

 

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

 

ARTICLE
30.

JURY
DUTY PAY

 

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

 

B.   In order to be eligible for jury duty pay, an Employee who is
summoned for jury duty must immediately present such summons to his supervisors
and the Employee must provide the Company with a statement signed by an official
of the court certifying as to the Employee’s service as a juror of reporting
for jury duty, the date or dates of such service, and the compensation paid him
therefor.

 

ARTICLE
31.

BEREAVEMENT
PAY

 

  In the event that
the spouse, child, parent, brother or sister, stepmother, stepfather
stepsister, or stepbrother of an Employee shall die, such Employee shall be
entitled to three (3) days bereavement pay at the ‘regular hourly rate for
eight (8) hours per day, provided that the time is actually taken off. The
Company reserves the right to require proof of death.

 

14

 

ARTICLE
32.

SICK
LEAVE

 

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

 

B. Effective at the beginning
of the first full calendar quarter following their first anniversary of
employment, Employees will be eligible to earn bonuses for perfect attendance
in accordance with the following rules;

 

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

 

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

 

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

 

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

 

	
  Example:

  
	
   

  
	
  Current 6% plant wide
  absence rate = current $100/quarterly bonus

  
	
   

  	
   

  	
   

  	
   

  
	
  Improvement to 5% plant
  wide absence rate 

  	
  = current

  	
   

  	
  $100/quarterly bonus

  
	
   

  	
  + additional

  	
   

  	
  $100 bonus

  
	
   

  	
   

  	
   

  	
  $200/quarterly bonus

  
	
   

  	
   

  	
   

  	
   

  
	
  Improvement to 4% plant
  wide absence rate 

  	
  = current

  	
   

  	
  $100/quarterly bonus

  
	
   

  	
  + additional

  	
   

  	
  $200 bonus

  
	
   

  	
   

  	
   

  	
  $300/quarterly bonus

  

 

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

 

Perfect attendance means no
absenteeism for any reason except: paid Vacation, paid Funeral leave; paid
Military leave; Jury Duty, and one paid Sick Day per quarter.

 

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

 

15

 

The Company and Union also
agree that Employees may be absent due to layoff up to fifteen (15) days in a
calendar quarter without such absences counting against them for the purpose of
determining eligibility for the attendance bonus.

 

ARTICLE
33.

MISCELLANEOUS

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

J.  Employees required to use their automobiles for Company business
will be reimbursed at the appropriate rate per mile authorized by the Internal
Revenue Service.

 

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

 

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

 

M.  The Company will provide each Employee, at a provider of the
Company’s choice, an annual eye exam and a single pair of safety glasses at no
cost to the Employee.

 

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

 

ARTICLE
34.

TERMINATION
AND RENEWAL

 

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

 

16

 

similarly, from year to year thereafter. If either party shall give such
notice, then negotiations shall commence forthwith. Only matters set forth in
such demands shall be considered in negotiations. This Agreement, including the
wage provisions thereof, is not subject to reopening, change or modification
during the term, for any cause whatsoever unless the parties hereto agree
otherwise.

 

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

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

 

	
   

  	
  STEINWAY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bruce A. Stevens

  	
   

  
	
   

  	
   

  	
  Bruce
  A. Stevens

  	
   

  
	
   

  	
   

  	
  President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Local 102 F.W.

  
	
   

  	
  I.U.E., AFL-CIO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Harry Boot

  	
   

  
	
   

  	
   

  	
  Harry
  Boot

  	
   

  
	
   

  	
   

  	
  President

  	
   

  
						

 

17

 

APPENDIX
I.

FACTORY
RULES AND REGULATIONS

 

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

 

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

 

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

 

4. It is the duty of every
person employed in this establishment to carry out and complete the work
assigned to him with care and diligence and without interruption during regular
work hours.

 

5. Employees are prohibited
from visiting other departments than those in which they are employed for the
purpose of talking with others during working hours, except in discharge of
their proper duties.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

13. Smoking, drinking
intoxicating liquor, or use of controlled or illegal substances and gambling
are absolutely prohibited in the factory.

 

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

 

15. The Company phones are
not to be used for personal business. In the event of emergency, you can be reached
through our switchboard. Pay telephones are available for employees use during
other than working hours.

 

16. It is prohibited to call
or hold meetings in any part of the establishment, or to distribute or put up
any placards, posters, or circulate lists, or make collection for any purpose
whatsoever, without authorization.

 

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

 

18

 

18. Employees who engage in
violent criminal activities outside the plant whose continued employment will
pose a serious and imminent threat to the health, safety and welfare of other
Employees may be terminated.

 

19. These rules and
regulations must be observed by every Employee, and any breach will be cause
for disciplinary action, subject to the grievance procedure in our Union
contract.

 

20. It is absolutely
prohibited to bring firearms or other weapons into the workplace.  Employees who do so will be discharged at
once.

 

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

 

APPENDIX II.

SKILL CLASSIFICATION

 

	
   

  	
   

  	
  10/1/03

  	
   

  	
  1/1/05

  	
   

  	
  1/1/06

  	
   

  
	
  Skilled
  A

  	
   

  	
  15.36

  	
   

  	
  15.67

  	
   

  	
  15.98

  	
   

  
	
  Skilled
  B

  	
   

  	
  15.23

  	
   

  	
  15.53

  	
   

  	
  15.84

  	
   

  
	
  Skilled
  C

  	
   

  	
  15.04

  	
   

  	
  15.34

  	
   

  	
  15.65

  	
   

  
	
  Semi-Skilled
  A

  	
   

  	
  14.65

  	
   

  	
  14.94

  	
   

  	
  15.24

  	
   

  
	
  Semi-Skilled
  B

  	
   

  	
  14.37

  	
   

  	
  14.66

  	
   

  	
  14.95

  	
   

  
	
  Unskilled

  	
   

  	
  14.15

  	
   

  	
  14.43

  	
   

  	
  14.72

  	
   

  
	
  Hiring
  Rate

  	
   

  	
  8.60

  	
   

  	
  8.77

  	
   

  	
  8.95

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0%
  increase

  	
   

  	
  2%
  increase

  	
   

  	
  2% increase

  	
   

  

 

19

 

INDEX

 

	
   

  	
  Sections

  
	
  Apprentices

  	
  11C

  
	
  Bereavement Pay

  	
  31

  
	
  Call-In Pay

  	
  4

  
	
  Change of Operations

  	
  12,
  21

  
	
  Check-off

  	
  3

  
	
  Christmas Bonus

  	
  20B

  
	
  Covered Employees

  	
  1

  
	
  Discharge

  	
  8,
  22

  
	
  Division of Work.

  	
  16

  
	
  Employee

  	
  1

  
	
  Foreman

  	
  13D,
  26C, 33G

  
	
  General Lay-off

  	
  27

  
	
  Grievance Procedure

  	
  4D,
  17

  
	
  Health

  	
  5,
  9, 25

  
	
  Hiring

  	
  2
  E, F

  
	
  Hiring Rates

  	
  11B

  
	
  Holidays

  	
  19

  
	
  Hourly Rates.

  	
  11B,
  12

  
	
  Hours of Work.

  	
  10,
  16

  
	
  Injured and Aged Employees

  	
  9

  
	
  Instructors.

  	
  14

  
	
  Insurance

  	
  25

  
	
  Jury Duty Pay

  	
  30

  
	
  Layoff

  	
  27

  
	
  Leave of Absence

  	
  18,
  23

  
	
  Lockout.

  	
  4

  
	
  New Operations &
  Methods Changes

  	
  12,
  21

  
	
  Overtime

  	
  10
  D-E

  
	
  Pension

  	
  26

  
	
  Safety

  	
  5

  
	
  Seniority

  	
  13,16

  
	
  Shop Chairman

  	
  28

  
	
  Shop Rules

  	
  6,
  9

  
	
  Sick Leave

  	
  32

  
	
  Strikes

  	
  4

  
	
  Terminations

  	
  8,
  22

  
	
  Termination and Renewal.

  	
  34

  
	
  Transfers

  	
  13

  
	
  Trial Period

  	
  7

  
	
  Tuning Department

  	
  10C

  
	
  Union Activities

  	
  3,
  33B

  
	
  Union President

  	
  16,
  17, 33B

  
	
  Union Security

  	
  2

  
	
  Vacations

  	
  20

  
	
  Veterans

  	
  18

  
	
  Wages

  	
  11

  
	
  Work Records

  	
  15

  
	
  Work & Seniority

  	
  16

  
	
  Workweek

  	
  16

  

 

20

 

Notes

 

21Exhibit 10.14

 

January 9, 2004

 

 

Michael J. Lafitte

[XXXXXXXXXX]

[XXXXXXXXXX]

 

Re:              Employment Agreement

 

Dear Michael:

 

We are pleased to present you with this
employment letter agreement (“Agreement”) which sets forth the terms upon which
you will continue to be employed by Trammell Crow Company (the “Company”, or
“we”, or “us”).

 

1.             Employment Period.  Subject to the terms and provisions of this
Agreement, we agree to continue to employ you, and you agree to continue to be
employed by us, for a period (the “Employment Period”) commencing on the
date hereof and expiring December 31, 2006; provided, that on December 31, 2006
and on each subsequent December 31, this Agreement will automatically be
extended for one additional year unless, during the four  month period beginning March 1 and
ending July 1 immediately prior to the next scheduled extension, you or we
will have given written notice (a “Non-Renewal Notice”) that the
Employment Period will not be extended (a “Non-Renewal”).

 

2.             Employment Terms and Conditions.

 

(a)           Position and Duties;
Extent of Services; Location. 
During the Employment Period, you will serve initially as President of
Global Services of the Company and from time to time will serve in such other
positions as the Board of Directors of the Company (the “Board”) may
from time to time determine.  In so
doing, you will have such powers and duties (including holding officer
positions with one or more Subsidiaries of the Company) as may be assigned from
time to time by the Board.  During the
Employment Period, you will devote your full business time, energy, and best
efforts to the business and affairs of the Company.  You agree not to engage, directly or indirectly, in any other
business, investment, or activity that interferes with your performance of your
duties under this Agreement, is contrary to the interests of the Company or
requires any portion of your business time, provided, however, that (i) you may
serve on the board of directors (or similar governing body) of one public
company if the Board has provided prior approval for such service, and (ii)
unless it would unreasonably interfere with your performance of your duties to
the Company, you may serve on the board of directors (or similar governing
body) of no more than one other organization that does not directly or
indirectly conduct a Competing Business (as defined herein), in each case which
boards shall be in addition to the boards of directors (or similar governing
bodies) on which you serve at the request of the Company.  The location of your principal work office
will

 

 

be Dallas, Texas.  “Subsidiary”
means any entity 50% or more of the voting securities of which are owned,
directly or indirectly, by the Company.

 

(b)           Compensation.  During the Employment Period, you will receive
an annual base salary (“Annual Base Salary”), payable in accordance with
the customary payroll practices of the Company for executive officers.  The Board, in its sole discretion, may at
any time increase the amount of the Annual Base Salary as it may deem
appropriate.  From time to time prior to
a Change in Control, and following the second anniversary of such Change in
Control, the Board may decrease your Annual Base Salary in the same manner and
to the same proportional extent as the average (mean) percentage decrease in
the annual base salaries of all other members of the Executive Officer
Committee.  The term “Annual Base
Salary” will refer to the Annual Base Salary as it may be so adjusted from
time to time.  In addition, during the
Employment Period, you will (i) be eligible to receive such annual bonus
payments, if any, as the Board or the Compensation Committee of the Board may
specify in its sole discretion (each an “Annual Bonus”), subject to any
terms or conditions as may be established by the Board or its Compensation
Committee, provided, that you will be provided an individual “annual incentive
plan” for each year and any performance criteria included in such incentive
plan must be reasonably achievable,
(ii) be entitled to participate in all incentive, savings, stock option, profit
sharing and retirement plans, practices, policies and programs applicable
generally to other executives of the Company (“Investment Plans”),
subject to all of the terms and conditions of such Investment Plans; and (iii)
be eligible to participate in all health, life and disability insurance
policies, all death and disability plans, practices, policies and programs and
all other welfare benefit plans, practices, policies and programs which are in
each such case applicable generally to other executives of the Company (“Welfare
Plans”), subject to all of the terms and conditions of such Welfare
Plans.  Subject to Sections 4 and 5, any
Annual Bonus awarded to you by the Board or the Compensation Committee of the
Board for any calendar year will be payable in March of the following year,
whether or not you are employed by the Company at such time. The term “Executive
Officer Committee” will refer to the Company’s Executive Officer Committee,
any successor committee thereto, and if there is no longer such a committee at
the time in question, then a comparable group of the Company’s executive
officers (as defined in Rule 3b-7 promulgated under the Securities Exchange Act
of 1934).

 

(c)           Vesting of Equity
Awards.  Notwithstanding the
provisions of any plan or agreement governing such an Award (as defined in Section
4(c)), all Awards granted to you that remain outstanding and unvested
immediately prior to the occurrence of a Change in Control (as defined in Section
4(d)(i)) automatically shall vest in full upon the occurrence of the Change
in Control.

 

3.             Termination of Employment.

 

(a)           Death.  Your employment hereunder will terminate
automatically upon your death.

 

(b)           Disability.  If your Disability occurs, we may give you a
written Notice of Termination (herein so called), and your employment will
terminate effective 30 days later if you have not returned to perform, with or
without reasonable accommodation, the essential functions of your position on a
full-time basis.  “Disability” means your inability, due to
physical or mental incapacity or impairment, to perform the material duties of
your position(s) with the Company

 

2

 

for
any period of more than 120 consecutive days, or for more than 180 days,
regardless of how consecutively they occur, during any 360-day period.

 

(c)           Termination by Us.  We may terminate your employment hereunder
at any time (A), subject to Section 6(b), for Cause or (B) for any
reason other than Cause.  “Cause”
means (i) your continued failure to substantially perform your obligations and
duties, as determined in good faith by the Board, and which is not remedied
within 30 days after your receipt of written notice thereof; (ii) commission of
an act of fraud, embezzlement, misappropriation, willful misconduct or breach
of fiduciary duty against the Company or other conduct materially harmful or
potentially materially harmful to the Company’s best interest, as determined in
good faith by the Board; (iii) material breach of Section 7 or 8
which is not cured within 30 days after your receipt of notice thereof, if such
breach is capable of being cured; (iv) conviction, plea of no contest or nolo
contendere, deferred adjudication or unadjudicated probation for any felony or
any crime involving moral turpitude; (v) failure to carry out, or comply with,
in any material respect, any lawful directive of the Board consistent with the
terms of this Agreement, which is not remedied within 30 days after receipt of
written notice thereof; or (vi) unlawful use (including being under the
influence) or possession of illegal drugs.

 

(d)           Resignation by You.  You may terminate your employment hereunder
at any time (i) subject to Section 6(a), for Good Reason or (ii) without
Good Reason.  Prior to a Change in
Control and following the second anniversary of such Change in Control, “Good
Reason” means (A) any material diminution (considering all previous
diminutions during the Employment Period in the aggregate, including all
previous diminutions during the Employment Period which are not material when
considered separately) in your position, authority, powers, functions, duties
or responsibilities; provided,
however, that Good Reason may not be asserted by you under this clause (A) after
a Non-Renewal Notice has been given; (B) the relocation or transfer of
your principal office to a location more than 50 miles from your regular work
address as of the date hereof without your consent; (C) any reduction in your
Annual Base Salary to an amount that is less than 90% of the highest Annual
Base Salary in effect for you during the Employment Period; (D) any
reduction in your Annual Bonus Target from your Annual Bonus Target for the
calendar year 2003; (E) the receipt by you of Awards in any calendar year that
differ (as to number, terms or type of Awards), in a manner adverse to you,
from the Award of  57,500 stock options
received by certain members of the Executive Officer Committee in calendar year
2002, unless either (1) such adverse differences are in the same manner and to
the same proportional extent as the average (mean) changes made to the Awards
received by all other members of the Executive Officer Committee in such
calendar year or (2) such adverse differences are directly related to the
Board’s good faith assessment of your relative contribution to the Company or
your relative performance as compared to other members of the Executive Officer
Committee; provided, however, that in the case of adverse differences pursuant
to clause (2), the receipt by you of a number of any type of Award in such
calendar year that is less than one-half of the Final Average Number of Awards
of such type for such calendar year shall constitute Good Reason; or (F) any
failure by the Company to comply with any of the provisions of Section 2(b)
which failure is not contemplated previously within this definition, excluding
in all such cases any isolated, insubstantial and inadvertent failure not
occurring in bad faith and which is remedied by the Company promptly after
receipt of notice thereof given by you. 
Upon or after a Change in Control but prior to the second anniversary of
such Change in Control, “Good Reason” means (A) any material
diminution (considering all previous diminutions during the Employment Period
in the aggregate, including all previous diminutions during the

 

3

 

Employment Period which are not material when considered separately) in
your position authority, powers, functions, duties or responsibilities in
effect immediately prior to the Change in Control (subject to the same
exclusions as provided above prior to a Change in Control and following the
second anniversary of such Change in Control); (B) any reduction in your
Annual Base Salary; (C) (i) any reduction in your Annual Bonus Target
from your Annual Bonus Target for the calendar year 2003 or (ii) the
awarding to you of an Annual Bonus that is less in amount than the Annual Bonus
awarded to you for the calendar year immediately preceding the year during
which the Change in Control occurs; (D) the receipt by you of Awards in
any calendar year that differ (as to number, terms or type of Awards), in a
manner adverse to you, from the Award of 
57,500 stock options received by certain members of the Executive
Officer Committee in calendar year 2002, unless either (1) such adverse
differences are in the same manner and to the same proportional extent as the
average (mean) changes made to the Awards received by all other members of the
Executive Officer Committee in such calendar year or (2) such adverse
differences are directly related to the Board’s good faith assessment of your
relative contribution to the Company or your relative performance as compared
to other members of the Executive Officer Committee; provided, however, that in
the case of adverse differences pursuant to clause (2), the receipt by you of a
number of any type of Award in such calendar year that is less than one-half of
the Final Average Number of Awards of such type for such calendar year shall
constitute Good Reason; or (E) any failure by the Company to comply with
any of the provisions of Section  2(b) which failure is not
contemplated previously within this definition; or (F) the relocation or
transfer of your principal office to a location more than 50 miles from your
regular work address as of the date hereof without your consent, excluding in
all such cases any isolated, insubstantial and inadvertent failure not
occurring in bad faith and which is remedied by the Company promptly after
receipt of notice thereof given by you. 
As used in this Agreement:

 

(i)            “Annual
Bonus Target” means the percentage of your Annual Base Salary that is
authorized to be awarded to you as an Annual Bonus if certain performance
criteria are met.

 

(ii)           “Final
Average Number of Awards” means, for any calendar year and for each type of
Award granted during such year, the quotient (rounded up to the nearest whole
number) equal to the aggregate number of Awards of such type received by all
members of the Adjusted EOC Group in such calendar year, divided by the number
of members of the Adjusted EOC Group in such calendar year.

 

(iii)          “Adjusted
EOC Group” means, for any calendar year and for each type of Award granted
during such year, the members of the Executive Officer Committee who are
eligible to receive Awards of such type in such calendar year, excluding the
Chief Executive Officer of the Company and each Outlier Award Recipient in such
calendar year; provided, however, that if more than 50% of the members of the
Executive Officer Committee for any calendar year are determined to be Outlier
Award Recipients in such calendar year, then, notwithstanding the foregoing,
all members of the Executive Officer Committee (excluding the Chief Executive
Officer of the Company) who are eligible to receive Awards of such type in such
calendar year shall be included in the Adjusted EOC Group for such calendar
year with respect to such type.

 

(iv)          “Outlier
Award Recipient” means, for any calendar year and for each type of Award
granted during such year, each member of the Executive Officer

 

4

 

Committee (excluding the Chief Executive
Officer of the Company) who is eligible to receive Awards of such type in such
calendar year and who receives a number of Awards of such type in such calendar
year that is (i) 150% or more of the Preliminary Average Number of Awards or
(ii) 66 2/3% or less of the Preliminary Average Number of Awards.

 

(v)           “Preliminary
Average Number of Awards” means, for any calendar year and for each type of
Award granted during such year, the quotient (rounded up to the nearest whole
number) equal to the aggregate number of Awards of such type received by all
members of the Executive Officer Committee (excluding the Chief Executive
Officer of the Company) in such calendar year, divided by the number of members
of the Executive Officer Committee (excluding the Chief Executive Officer of
the Company) who are eligible to receive Awards of such type in such calendar
year.

 

(vi)          The
phrase “number of Awards” refers to the underlying number of shares of capital
stock of the Company to which the applicable Award relates.

 

(e)           Expiration of Term.  Your employment will end at the expiration
of the Employment Period as a result of any Non-Renewal.  Except as described in Sections 3(e)(i)
and (ii), a termination of your employment under this Agreement due to
the expiration of the Employment Period as a result of any Non-Renewal will not
be deemed a termination of your employment entitling you to any benefits
described in Section 4 or Section 5.

 

(i)            If
the Company delivers a Non-Renewal Notice to you, upon the effectiveness of
such Non-Renewal you will be entitled to receive (i) an amount equal to your
Pro Rata Bonus, which will be paid at such time as the Company pays its other
members of the Executive Officer Committee their annual cash incentive bonuses
with respect to the calendar year in which termination occurs, (ii) the
severance or separation benefits (including continuation of any welfare
benefits) provided generally by us to the members of the Executive Officer
Committee under our general policies in effect from time to time upon
termination by the Company of their employment (excluding any other severance or
separation benefits available to any member of the Executive Officer Committee
pursuant to an employment agreement and not under our general policies in
effect from time to time), and (iii) the other compensation and benefits
described in Section 4(b).

 

(ii)           If
any Non-Renewal is effected at your election, you will be entitled to receive
(i) an amount equal to your Pro Rata Bonus, which will be paid at such time as
the Company pays its other members of the Executive Officer Committee their
annual cash incentive bonuses with respect to the calendar year in which
termination occurs, and (ii) the other compensation and benefits described in Section
4(b) upon the effectiveness of such Non-Renewal.

 

4.             Compensation Upon
Termination Prior to a Change in Control and After the Second Anniversary of
such Change in Control.  Prior
to a Change in Control and after the second anniversary of such Change in
Control, conditioned on the effectiveness of a Release signed by you or your
legal representative, you will be entitled to the following compensation from
the Company upon the termination of your employment, which is in lieu of any
other

 

5

 

severance pay or employment benefits to which you might otherwise be
entitled (whether contractual, under a severance plan, the WARN Act, any other
applicable law, or otherwise):

 

(a)           Death or Disability.  If your employment is terminated by reason
of your death or Disability, the Company will pay you or your legal
representative, as applicable, (A) in a cash lump sum within thirty (30) days
after the effective date of the Release, the following amounts:  (1) the sum of your unpaid Annual Base
Salary through the date of termination and any compensation previously deferred
by you (together with any accrued interest or earnings thereon) (“Accrued
Obligations”); and (2) the amount of any unpaid Annual Bonus that was
awarded to you prior to the date of termination; (B) any amounts arising
from your participation in any Investment Plan (“Accrued Investments”),
which amounts will be payable in accordance with the terms and conditions of
such Investment Plan; (C) any amounts to which you are entitled from your
participation in, or benefits under, any Welfare Plan (“Accrued Welfare
Benefits”), which amounts will be payable in accordance with the terms and
conditions of such Welfare Plan; and (D) an amount equal to your Pro Rata
Bonus, which will be paid at such time as the Company pays its other members of
the Executive Officer Committee their annual cash incentive bonuses with
respect to the calendar year in which termination of your employment
occurs.  “Pro Rata Bonus” means
the amount equal to the product of (i) your Annual Bonus Target for the
calendar year in which your employment is terminated (or your Annual Bonus
Target for the immediately preceding year if you resign for Good Reason as
defined in the first clause (D) or the second clause (C)(i) of Section
3(d)), multiplied by (ii) the amount of your Annual Base Salary for the
calendar year in which your employment is terminated (or the highest Annual
Base Salary to which you were entitled during the twelve months immediately
preceding the date of termination if you resign for Good Reason as defined in
the first clause (C) or the second clause (B) of Section 3(d)), multiplied
by (iii) the average (mean) percentage of annual cash incentive bonus
targets actually paid as bonuses to the members of the Executive Officer
Committee as a group for such year, and multiplied by (iv) a fraction, the
numerator of which is the number of days that have elapsed in such calendar
year as of the date of termination, and the denominator of which is 365.  Except as described in this Section 4(a),
in the event of your termination by reason of your death or Disability, you and
your legal representatives, as applicable, will forfeit all rights to any other
compensation.

 

(b)           For Cause;
Resignation by You Without Good Reason; Non-Renewal Election by You or the
Company.  If your employment is
terminated by us for Cause or by you without Good Reason or due to a
Non-Renewal election by us or you, we will have no further obligations to you
other than as set forth in Section 3(e), if applicable, and the
obligation for payment of (i) Accrued Obligations (which will be payable within
the time period set forth in Section 4(a)(A) above), (ii) the
Accrued Investments and the Accrued Welfare Benefits (which will be payable in
accordance with the terms and conditions of the Investment Plans and the
Welfare Plans, as applicable), and (iii) the amount of any unpaid Annual Bonus
that was awarded to you prior to the date of termination (which will be payable
within the time period set forth in Section 4(a)(A) above).  Except as described in this Section 4(b)
or in Section 3(e), if applicable, in the event of your termination by
the Company for Cause or due to your resignation without Good Reason or a
Non-Renewal election by us or you, you will forfeit all rights to any other
compensation.

 

(c)           Without Cause;
Resignation for Good Reason.  If we
terminate your employment without Cause or you resign for Good Reason, then we
will pay or provide to you:

 

6

 

(i)            a
cash lump sum within thirty (30) days after the effective date of the Release
equal to the aggregate of the following amounts:  (A) the Accrued Obligations; (B) an amount equal to one and
one-half (1.5) multiplied by the sum of (x) the highest Annual Base Salary to
which you were entitled during the twelve months immediately preceding the date
of termination, and (y) the sum of (i) one-half of your average (mean) Annual
Bonus awarded to you for the three years preceding termination, plus
(ii) one-half of the product of your current Annual Bonus Target (or your
Annual Bonus Target for the immediately preceding year if you resign for Good
Reason as defined in the first clause (D) of Section 3(d)), multiplied by the
amount of your Annual Base Salary for the calendar year in which your
employment is terminated (or the highest Annual Base Salary to which you were
entitled during the twelve months immediately preceding the date of termination
if you resign for Good Reason as defined in the first clause (C) of Section
3(d)); and (C) the amount of any unpaid Annual Bonus that was awarded to you prior
to the date of termination;

 

(ii)           an
amount equal to your Pro Rata Bonus, which will be paid at such time as the
Company pays its other members of the Executive Officer Committee their annual
cash incentive bonuses with respect to the calendar year in which termination
of your employment occurs;

 

(iii)          the
Accrued Investments and the Accrued Welfare Benefits, which amounts will be
payable in accordance with the terms and conditions of the Investment Plans and
the Welfare Plans, as applicable;

 

(iv)          if
you are entitled on the date of termination to coverage under the healthcare
portion of the Trammell Crow and Associated Companies Welfare Benefits Plan or
a similar Company group health arrangement 
(the “Health Plan”), continuation of such coverage for you and
your dependents for a period ending on the 180th day following the second (2nd)  anniversary of the date of termination, at
the active employee cost payable by you with respect to those costs paid by you
prior to your termination; provided, however, that this coverage will count
towards the depletion of any continued health care coverage rights that you and
your dependents may have pursuant to the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”); provided further,
however, that you or your dependents’ rights to continued health care coverage
pursuant to this Section will terminate at the time you or your dependents
become covered, as described in COBRA, under another group health plan, and
will also terminate as of the date the Company ceases to provide coverage to
its senior executives generally under any such Health Plan; and

 

(v)           upon
your request and at the Company’s sole cost and expense, your enrollment in an
outplacement program with a placement agency selected by the Company, and
reasonably acceptable to you, for a period of up to twelve months, commencing
on the date of termination.

 

Notwithstanding the provisions of any plan or
agreement governing such an Award, the Company also will continue to vest all
of your outstanding Awards that would have otherwise vested during the eighteen
(18) month period beginning on the date of termination and such Awards will
continue to vest and, if applicable, be exercisable during such eighteen (18)
month

 

7

 

period; provided, that nothing set forth herein shall result in an
extension of the term of any Award beyond
the term of the Award that would be applicable absent any termination of your
employment; provided further, however, that, in the case of a
termination of your employment pursuant to this Section 4(c), if the
terms of the plan or agreement governing such Award are more favorable to you
as to vesting or exercisability than the terms of this paragraph, then the more
favorable term(s) of such Award agreement or plan (in lieu of the corresponding
less favorable term(s) in this paragraph) shall govern the vesting or
exercisability, as the case may be, of such Award upon your termination. “Award”
means any option to acquire common stock, restricted stock award, stock
appreciation right or similar equity-based award granted under the Trammell
Crow Long-Term Incentive Plan or any other option or equity-based incentive
plan sponsored by the Company.  Except
as described in this Section 4(c), in the event of your termination by
us without Cause or by you for Good Reason, you will forfeit all rights to any
other compensation.

 

(d)           As used in this
Agreement:

 

(i)            “Change
in Control” has the meaning given such term in the Trammell Crow Long-Term
Incentive Plan (as such plan is in effect on the date of this Agreement, the
“LTIP”); provided, however, that the occurrence of a Rule 13e-3 transaction
(within the meaning of Rule 13e-3 promulgated under the Securities Exchange Act
of 1934 or any similar successor rule thereto) that has been approved by the
Board and subsequent to which you are part of a group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 or any
similar successor rule thereto) that owns more than 50%, respectively, of the
then outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the election
of directors of the Company will not be deemed to be a Change in Control;
provided, further, if, prior to any Change in Control, you terminate your
employment for Good Reason or your employment is terminated by the Company
without Cause and a Change in Control occurs within 180 days after such
termination (excluding a Change in Control that occurs pursuant to an
unsolicited tender or exchange offer by any person, in response to which the
Company does not recommend acceptance of the person’s tender or exchange
offer), then for all purposes hereof, the date of the Change of Control with
respect to your employment shall mean the date immediately prior to such
termination; provided, further that notwithstanding that any such transaction
does not constitute a Change in Control as defined in the LTIP, a Change in
Control shall be deemed to have occurred for all purposes under this Agreement
upon either (A) the consummation of a Business Combination (as defined in the
LTIP) with a National Competitor, unless, following such Business Combination,
the conditions in clauses (B) and (C) of Section 1.6 (iii) of the LTIP
are satisfied and all or substantially all of the individuals and entities who
were the beneficial owners of, respectively, the Outstanding Corporation Common
Stock and Outstanding Corporation Voting Securities (each as defined in the
LTIP) immediately prior to such Business Combination beneficially own, directly
or indirectly, more than 60%, respectively, of the then outstanding shares of
common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors of the
corporation resulting from such Business Combination (including, without
limitation, a corporation which as a result of such transaction owns the
Company, or all or substantially all of the Company’s assets either directly or
through one or more

 

8

 

subsidiaries)
in substantially the same proportions as their ownership, immediately prior to
such Business Combination, of the Outstanding Corporation Common Stock and
Outstanding Corporation Voting Securities, as the case may be, or (B) the
acquisition by any National Competitor (or any group (as defined in the LTIP)
of which a National Competitor is a controlling (within the meaning of Rule
12b-2 promulgated under the Securities Exchange Act of 1934) member of the
group) of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Securities Exchange Act of 1934) of 40% or more of either the
Outstanding Corporation Common Stock or the Outstanding Corporation Voting
Securities.  By way of clarification,
any transaction with a National Competitor that constitutes a Change in Control
as defined in the LTIP shall be considered a Change in Control for all purposes
under this Agreement.

 

(ii)           “National
Competitor” means any one of the companies known as Jones Lange LaSalle,
Inc., Grubb and Ellis Co. and CB Richard Ellis or their respective successors.

 

5.             Compensation Upon Termination Occurring On or
Within Two Years After a Change in Control.  After a Change in Control and on or before
the second anniversary of such Change in Control, conditioned on the
effectiveness of a Release signed by you or your legal representative, you will
be entitled to the following compensation from the Company upon termination of
your employment (including a termination resulting from the delivery of a
Non-Renewal Notice by the Company or you during such two-year period), which
shall be in lieu of any other severance pay or employment benefits to which you
might otherwise be entitled (whether contractual, under a severance plan, the
WARN Act, any other applicable law, or otherwise):

 

(a)           Death or Disability.  If your employment is terminated by reason
of your death or Disability, the Company will pay you or your legal
representative, as applicable, (A) in a cash lump sum within thirty (30) days
after the effective date of the Release, the following amounts:  (1) the Accrued Obligations; and (2) the
amount of any unpaid Annual Bonus that was awarded to you prior to the date of
termination; (B) the Accrued Investments, which amounts will be payable in
accordance with the terms and conditions of the Investment Plans; (C) the
Accrued Welfare Benefits, which amounts will be payable in accordance with the
terms and conditions of the Welfare Plans; and (D) an amount equal to your Pro
Rata Bonus, which will be paid at such time as the Company pays its other
members of the Executive Officer Committee their annual cash incentive bonuses
with respect to the calendar year in which termination of your employment
occurs.  Except as described in this Section
5(a), in the event of your termination by reason of your death or
Disability, you and your legal representatives, as applicable, will forfeit all
rights to any other compensation.

 

(b)           For Cause;
Resignation by You Without Good Reason; Non-Renewal Election by You or the
Company.  If your employment is
terminated by us for Cause or by you without Good Reason or due to a
Non-Renewal election by us or you, we will have no further obligations to you
other than as set forth in Section 3(e), if applicable, and for
payment of (i) Accrued Obligations (which will be payable within the time
period set forth in Section 5(a)(A) above), (ii) the Accrued
Investments and the Accrued Welfare Benefits (which will be payable in
accordance with the terms and conditions of the Investment Plans and the
Welfare Plans, as applicable), and (iii) the amount of any unpaid Annual Bonus
that was awarded to you prior to

 

9

 

the date of termination (which will be payable within the time period
set forth in Section 5(a)(A) above).  Except as described in this Section 5(b) or in Section
3(e), if applicable, in the event of your termination by the Company for
Cause or due to your resignation without Good Reason or a Non-Renewal election
by us or you, you will forfeit all rights to any other compensation.

 

(c)           Without Cause;
Resignation for Good Reason.  If
your employment is terminated by the Company without Cause or by you for Good
Reason (taking into account in each such case the definition of Change in
Control), then, in lieu of any other severance pay or benefits, and conditioned
on the effectiveness of a Release signed by you, the Company will pay or
provide to you:

 

(i)            a
cash lump sum within thirty (30) days after the effective date of the Release
equal to the aggregate of the following amounts:  (A) the Accrued Obligations; (B) an amount equal to two and
one-half (2.5) multiplied by the sum of (x) the highest Annual Base Salary to
which you were entitled during the twelve months immediately preceding the date
of termination, and (y) the sum of (i) one-half of your average (mean) Annual
Bonus awarded to you for the three years preceding termination (or the three years
preceding the year to which the Annual Bonus in question relates if you resign
for Good Reason as defined in the second clause (C)(ii) of Section 3(d)), plus
(ii) one-half of the product of your current Annual Bonus Target (or your
Annual Bonus Target for the immediately preceding year if you resign for Good
Reason as defined in the second clause (C)(i) of Section 3(d)), multiplied
by the amount of your Annual Base Salary for the calendar year in which your
employment is terminated (or the highest Annual Base Salary to which you were
entitled during the twelve months immediately preceding the date of termination
if you resign for Good Reason as defined in the second clause (B) of Section
3(d)); and (C) the amount of any unpaid Annual Bonus that was awarded to you
prior to the date of termination; provided, however, that if the Company fails
to make such lump sum payment when due and such failure continues for ten (10)
days following notice of nonpayment to the Company, the amount of the payment
the Company is obligated to make pursuant to this Section 5(c)(i) shall
automatically be increased by twenty-five percent (25%);

 

(ii)           the
Accrued Investments and the Accrued Welfare Benefits, which amounts will be
payable in accordance with the terms and conditions of the Investment Plans and
the Welfare Plans, as applicable;

 

(iii)          a
cash lump sum within thirty (30) days after the effective date of the Release
equal to the sum of (1) the unvested portion of your Matching Contribution
Account under the Company’s Retirement Savings Plan, plus (2) the product of
(x) two and one-half (2.5) multiplied times (y) the Matching Contribution you
received for the calendar year ended prior to the calendar year in which the
Change in Control occurs;

 

(iv)          if
you are entitled on the date of termination to coverage under the healthcare
portion of the Health Plan, continuation of such coverage for a period ending
on the 180th day following the second (2nd)  anniversary
of the date of termination, at the active employee cost payable by you with
respect to those costs paid by you prior to such termination.  Provided, however, that this coverage will
count towards the depletion of any continued health care coverage rights that
you and your dependents may have

 

10

 

pursuant to
COBRA.  Provided further, that you or
your dependents’ rights to continued health care coverage pursuant to this
Section will terminate at the time you or your dependents become covered, as
described in COBRA, under another group health plan, and will also terminate as
of the date the Company ceases to provide coverage to its senior executives
generally under any such Health Plan;

 

(v)           an
amount equal to your Pro Rata Bonus, which will be paid at such time as the
Company pays its other members of the Executive Officer Committee their annual
cash incentive bonuses with respect to the calendar year in which termination
occurs; and

 

(vi)          upon
your request and at the Company’s sole cost and expense, your enrollment in an
outplacement program with a placement agency selected by the Company, and
reasonably acceptable to you, for a period of up to twelve months, commencing
on the effective date of the Release.

 

Notwithstanding the provisions of any plan or
agreement governing such an Award and without limiting Section 2(c), (A)
the Company will also continue to vest all of your outstanding Awards granted
on or after a Change in Control that would have otherwise vested during the
eighteen (18) month period beginning on the date of termination and such Awards
will continue to vest and, if applicable, be exercisable during such eighteen
(18) month period and (B) all of your outstanding Awards that are vested
immediately prior to the date of termination shall be exercisable during the eighteen
(18) month period beginning on the date of termination; provided, however, that
nothing set forth herein shall result in an extension of the term of any Award
beyond the term of the Award that would be applicable absent any termination of
your employment; provided, further, however, that, in the case of a termination
of your employment pursuant to this Section 5(c), if the terms of the
plan or agreement governing such Award are more favorable to you as to vesting
or exercisability than the terms of this paragraph, then the more favorable
term(s) of such Award agreement or plan (in lieu of the corresponding less
favorable term(s) in this paragraph) shall govern the vesting or
exercisability, as the case may be, of such Award upon your termination.  Except as described in this Section 5(c),
in the event of your termination by us without Cause or by you for Good Reason
(taking into account in each such case the definition of Change in Control),
you will forfeit all rights to any other compensation.

 

6.             Other Provisions Relating to Termination.

 

(a)           Good Reason.  Upon you learning of any event described in
the definition of Good Reason, you may terminate your employment for Good
Reason by giving a Notice of Termination (describing, if applicable, the action
required to cure the basis for termination) to us within 60 days thereafter. If
the event constituting Good Reason may be cured, we will have the opportunity
to cure any such event for a period of 60 days following receipt of your Notice
of Termination.  If you do not give a
Notice of Termination to us within 60 days after learning of an event giving
rise to Good Reason, then this Agreement will remain in effect and, without any
further act on your part, you will have waived your right to terminate your employment
hereunder for Good Reason in respect of such event.

 

(b)           Cause.  Upon the Company learning of any event
described in the definition of Cause, we may terminate your employment for
Cause by giving a Notice of

 

11

 

Termination (describing, if applicable, the action required to cure the
basis for termination) to you within 60 days thereafter. If we do not give you
a Notice of Termination within 60 days after learning of an event giving rise
to Cause, then this Agreement will remain in effect and, without any further
act on our part, we will have waived our right to terminate your employment for
Cause in respect of such event.

 

(c)           Full Settlement;
Mitigation.  In no event will you be
obligated to seek other employment or take any other action by way of
mitigation of the amounts payable to you under any of the provisions of this
Agreement and, except for your right, if any, to continue your participation in
the Health Plan as provided herein, such amounts will not be reduced whether or
not you obtain other employment.  The
Company will not be liable to you for any damages for breach of this Agreement
arising out of the termination of your employment other than for amounts
payable under Sections 3(e), 4 or 5, which amounts will be
payable subject to the terms and conditions set forth therein.  The Company will be entitled to seek damages
from you for any breach of Section 7 or 8 by you or for your
criminal misconduct.

 

(d)           Release and Other
Agreements.  Notwithstanding any
other provision in this Agreement to the contrary, as a condition to receiving
the benefits described in this Agreement, upon any termination of your
employment hereunder you hereby agree to execute (and not revoke) a release in
substantially the form attached hereto as Exhibit A (the “Release”) and
such other documents and agreements as required by the Company, in the form and
pursuant to the procedures reasonably established by the Company.  For purposes of this Agreement, the Release
will be considered to have been executed by you if it is signed by your legal
representative in the case of your legal incompetence or on behalf of your
estate in the case of your death.  Upon
your execution and delivery of the Release, the Company will also promptly
execute and deliver the Release.

 

7.             Confidential Information.

 

(a)           You acknowledge that
the Company has trade, business and financial secrets and other confidential
and proprietary information regarding the Company and its business, in whatever
form, tangible or intangible (collectively, the “Confidential Information”),
and that during the course of your employment with the Company you have
received, will receive or will contribute to the Confidential Information.  Confidential Information includes sales
materials, technical information, processes and compilations of information,
records, specifications and information concerning customers, prospective
customers or vendors, customer and prospective customer lists, and information
regarding methods of doing business. 
However, Confidential Information does not include information that
(i) is obtained by you from a source other than the Company or its
affiliates who is not under a duty of non-disclosure to the Company or such
affiliate or (ii) becomes generally available to the public other than
through disclosure by you in violation of the provisions of this Agreement.

 

(b)           You are aware of those
policies implemented by the Company to keep its Confidential Information
secret.  You acknowledge that the Confidential
Information has been developed or acquired by the Company through the
expenditure of substantial time, effort and money and provides the Company with
an advantage over competitors who do not know or use such Confidential
Information.

 

12

 

(c)           During and following
your employment by the Company, you will hold in confidence and will not
directly or indirectly disclose, use, copy, make lists of, or make available to
others any Confidential Information except in the good faith performance of
your duties to the Company or to the extent authorized in writing by the Board
or required by law or compelled by legal process.  You agree to use reasonable efforts to give the Company notice
(accompanied by a copy of the subpoena, order or other process used to compel
disclosure) of any and all attempts to compel disclosure of any Confidential
Information, in such a manner so as to provide the Company with written notice
within one (1) business day after you are informed that such disclosure is
being or will be compelled.

 

(d)           You further agree not
to use any Confidential Information for the benefit of any person or entity
other than the Company.

 

(e)           Upon termination of
your employment, you agree that all Confidential Information and other files,
documents, materials and other repositories containing information concerning
the Company or the business of the Company (including all copies thereof) in
your possession, custody or control, whether prepared by you or others, will
remain with or be returned to the Company promptly (within twenty-four (24)
hours) after the date of such termination.

 

(f)            Notwithstanding
anything herein to the contrary, you may disclose to any and all persons,
without limitation of any kind, the U.S. federal income tax treatment and tax
structure of the transactions contemplated in this Agreement and all materials
of any kind (including opinions and other tax analyses) that are provided to
you relating to such tax treatment and tax structure.  For this purpose, “tax structure” is limited
to facts relevant to the U.S. federal income tax treatment of the transactions
contemplated in this Agreement and does not include information relating to the
identity of the parties hereto.

 

8.             Non-Competition; Non-Solicitation.

 

(a)           You acknowledge and
agree that your use of Confidential Information and our lists of, and
information concerning, customers and prospective customers in the conduct of
business on behalf of a competitor of the Company would constitute unfair
competition with the Company and would adversely affect the business goodwill
of the Company.  Accordingly, as a
material inducement to the Company to enter into this Agreement; to protect the
Company’s Confidential Information, including lists of, and information
concerning, customers and prospective customers of the Company, that may be
disclosed or entrusted to you (the disclosure of which by you in violation of
this Agreement would adversely affect the business goodwill of the Company),
the business goodwill of the Company that may be developed in you and the
business opportunities that may be disclosed or entrusted to you by the
Company; in consideration for the compensation and other benefits payable
hereunder to you, for the benefits to you of having access to Confidential
Information, including lists of, and information concerning, customers and
prospective customers of the Company, during the Employment Period (the
disclosure of which by you in violation of this Agreement would adversely affect
the business goodwill of the Company); and for other good and valuable
consideration, you hereby covenant and agree that, during the Term of
Non-Competition, you will not directly or indirectly, individually or as an
officer, director, manager, employee, shareholder, consultant, contractor,
partner, member, joint venturer, agent, equity owner or in any capacity
whatsoever:

 

13

 

(i)            own,
engage in, manage, operate, join, control, be employed by, provide Competing
Services to, or participate in the ownership, management, operation or control
of or provision of Competing Services to, a Competing Business operating in the
Geographic Area;

 

(ii)           recruit,
hire, assist in hiring, attempt to hire, or contact or solicit with respect to
hiring any person who, at any time during the twelve (12) month period ending
on the date of termination, was an employee of the Company; provided, that you
may hire any person that served as an administrative or clerical employee at
the time their employment with the Company terminates so long as you do not
recruit, contact or solicit such employee;

 

(iii)          induce
or attempt to induce any employee of the Company to terminate, or in any way
interfere with, the relationship between the Company and any employee thereof;
or

 

(iv)          induce
or attempt to induce any customer, client, supplier, service provider, or other
business relation of the Company in the Geographic Area to cease doing business
with the Company, or in any way interfere with the relationship between the
Company and any such person.

 

Notwithstanding
the foregoing, the Company agrees that you may own less than one percent of the
outstanding voting securities of any publicly traded company that is a
Competing Business so long as you do not otherwise participate in such
competing business in any way prohibited by this Section.

 

(b)           You acknowledge that
the geographic boundaries, scope of prohibited activities, and time duration of
the preceding paragraphs in this Section are reasonable in nature and are no
broader than are necessary to maintain the goodwill of the Company and the
confidentiality of its Confidential Information and to protect the goodwill and
other legitimate business interests of the Company, and also that the enforcement
of such covenants would not cause you any undue hardship or unreasonably
interfere with your ability to earn a livelihood.  If you violate the covenants and restrictions in this Section and
the Company brings legal action for injunctive or other equitable relief, you
agree that the Company will not be deprived of the benefit of the full period
of the restrictive covenant, as a result of the time involved in obtaining such
relief.  Accordingly, you agree that the
provisions in this Section will have a duration determined pursuant to
Subsection (a) above, computed from the date the legal or equitable relief is
granted.

 

(c)           As used in this
Agreement:

 

(i)            “Competing
Business” means a business that competes in any material respect with the
business, or any line of business, engaged in by the Company or any of its
Subsidiaries (A) at the time in question in respect of the Term of
Non-Competition occurring prior to the date of termination of your employment
and (B) as of the date of termination of your employment in respect of the Term
of Non-Competition occurring on and after the date of termination of your
employment.

 

14

 

(ii)           “Competing
Services” means services that, if provided to a business other than a
Competing Business, would constitute the conduct of a Competing Business.

 

(iii)          “Geographic
Area” means the geographic area in which the Company or any of its
Subsidiaries engages in its respective business or any line of its business (A)
at the time in question in respect of the Term of Non-Competition occurring
prior to the date of termination of your employment and (B) as of the date of
termination of your employment in respect of the Term of Non-Competition
occurring on and after the date of termination of your employment.

 

(iv)          “Term
of Non-Competition” means the period of time beginning on the date hereof
and continuing until 5:00 p.m., Dallas, Texas time, on:

 

(A)          the
date of termination if your employment is terminated (1) by the Company for any
reason other than Cause, (2) by you for Good Reason, or (3) due to a
Non-Renewal election by you or the Company at any time, or

 

(B)           the
date that is twelve (12) months after the date of termination if your
employment is terminated (1) by the Company for Cause or (2) by you for any
reason other than Good Reason (other than a Non-Renewal election made by you).

 

(d)           If any court or
arbitrator determines that any portion of this Section 8 is invalid or
unenforceable, the remainder of this Section 8 will not thereby be
affected and will be given full effect without regard to the invalid or
unenforceable provisions.  If any court
or arbitrator construes any of the provisions of this Section 8 to be
invalid or unenforceable because of the duration or scope of such provision,
such court or arbitrator will be required to reduce the duration or scope of
such provision, to the minimum extent necessary so as to be enforceable, and to
enforce such provision as so reduced.

 

9.             Gross-Up for Certain Taxes.  If any of the payments or benefits due to
you under this Agreement would otherwise result in your liability for any
excise taxes pursuant to Internal Revenue Code (“Code”) Section 4999 (“Excise
Tax”) (whether at the time of payment or upon a later IRS audit), the
Company and you agree to use commercially reasonable efforts to restructure, in
a manner reasonably acceptable to the Company and you, such payments or
benefits due to you so that such Excise Tax is eliminated or minimized to the
extent permitted by applicable law; provided, however, that, without creating
any implication as to whether or not, under all the circumstances it would be
unreasonable for you to refuse to defer receipt for a shorter period, the
Company agrees that, regardless of the circumstances, it shall not be
unreasonable for you to refuse to defer receipt of a material portion of the
payments or benefits due to you under this Section 9 for more than six
months after the date on which such payments or benefits would otherwise become
due to you under this Agreement.  If,
despite the use of commercially reasonable efforts, the Company and you are
unable either to agree on any such restructuring or to restructure the payments
or benefits due to you under this Agreement to eliminate such Excise Tax, the
Company will reimburse you for the amount of such Excise Tax plus all federal,
state and local taxes applicable to the Company’s payment of such Excise Taxes,
including any additional taxes due under Section 4999 of the Code with respect
to payments made pursuant to this provision. 
Calculations for these purposes will assume the highest

 

15

 

marginal rate for individuals applicable at the time of
calculation.  The intent of this Section
9 is that the Company will pay you an additional amount (the “Gross-Up
Payment”) such that the net amount retained by you after deduction of (i)
any Excise Tax imposed on any such payment or benefit; and (ii) any excise tax,
federal, state or local income, payroll, and/or other taxes, imposed on the
Gross-Up Payment, will equal the amount of such payment or benefit reduced by
all applicable taxes on such amount other than the Excise Tax.

 

10.          Successors; Binding Agreement.

 

(a)           This Agreement may not
be assigned by you other than by will or by the laws of descent and
distribution.  This Agreement will inure
to the benefit of and be enforceable by your personal and legal
representatives, executors, administrators, heirs, distributees, devisees and
legatees. This Agreement will inure to the benefit of and be binding upon the
Company and its successors and assigns.

 

(b)           The Company will
require any successor to all or substantially all of the business and/or assets
of the Company, by a written agreement in form and substance reasonably
satisfactory to you, to assume expressly and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place.  Failure of the Company to obtain such agreement prior to the
effectiveness of any such succession will be considered grounds for you to
terminate your employment for Good Reason, and if you do so terminate your
employment, you will be entitled to compensation from the Company in the same
amount and on the same terms as you would be entitled to pursuant to Section
5 if you terminated your employment for Good Reason thereunder after, but
before the second anniversary of, a Change in Control.  As used in this Agreement and after any such
succession, “Company” will mean the Company as hereinbefore defined and any
successor and/or assigns which assumes and agrees to perform this Agreement by
operation of law, or otherwise.

 

11.          Miscellaneous.

 

(a)           Construction.  This Agreement will be deemed drafted
equally by both the parties.  Any
presumption or principle that the language is to be construed against any party
will not apply.

 

(b)           Notices.  For purposes of this Agreement, notices and
all other communications provided for in this Agreement will be in writing and
will be deemed to have been duly given when (i) delivered personally; (ii) sent
by facsimile or similar electronic device and confirmed; (iii) delivered by
overnight express; or (iv) if sent by any other means, upon receipt.  Any notice or other communication shall be
delivered to the address set forth below the Company’s or your signature
hereto, as applicable, or to such other address as either party will have
furnished to the other in writing in accordance herewith.

 

(c)           Severability.  Except as otherwise provided in Section
8(d), if any provision of this Agreement is held to be illegal, invalid or
unenforceable, such provision will be fully severable; this Agreement will be
construed and enforced as if such illegal, invalid or unenforceable provision had
never comprised a portion of this Agreement; and the remaining provisions of
this Agreement will remain in full force and effect and will not be affected by
the illegal, invalid or unenforceable provision or by its severance from this
Agreement.

 

16

 

Furthermore, except as otherwise provided in Section 8(d),
in lieu of such illegal, invalid or unenforceable provision there will be added
automatically as part of this Agreement a provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible and be legal,
valid and enforceable.

 

(d)           Withholding.  The Company may withhold from any amounts
payable under this Agreement such Federal, state or local taxes as are required
to be withheld pursuant to any applicable law or regulation.

 

(e)           No Waiver.  Except as expressly set forth in this
Agreement, no waiver by either party at any time of any breach by the other
party of, or compliance with, any condition or provision of this Agreement to
be performed by the other party will be deemed a waiver of similar or
dissimilar provisions or conditions at any time.

 

(f)            Equitable and Other
Relief.  You acknowledge that money
damages would be both incalculable and an insufficient remedy for a breach of Section
7 or 8 by you and that any such breach would cause the Company
irreparable harm.  Accordingly, the
Company, in addition to any other remedies at law or in equity it may have,
will be entitled, without the requirement of posting of bond or other security,
to equitable relief, including injunctive relief and specific performance, in
connection with a breach of Section 7 or 8 by you.  The parties agree that the only
circumstances in which disputes between them will not be subject exclusively to
arbitration pursuant to the provisions in Section 11(h) are in
connection with a breach of Section 7 or 8 by you.  If the Company files a pleading with a court
seeking immediate injunctive relief and this pleading is challenged by you and
injunctive relief sought is not awarded, the Company will pay all of your costs
and attorneys’ fees.  The parties
consent to venue in Dallas County, Texas and to the exclusive jurisdiction of
competent state courts or federal courts in the state or district in Dallas County,
Texas for all litigation which may be brought, subject to the requirement for
arbitration hereunder, with respect to the terms of, and the transactions and
relationships contemplated by, this Agreement.

 

(g)           Entire Agreement.  The provisions of this Agreement constitute
the entire and complete understanding and agreement between the parties with
respect to the subject matter hereof. 
The Company and you acknowledge that the Indemnification Agreement,
dated August 27, 2002, by and between you and the Company shall remain in full
force and effect, without limitation of your rights thereunder by the terms of
this Agreement.

 

(h)           Arbitration.  Except as otherwise provided in Section
11(f), in the event any claim, demand, cause of action, dispute, controversy
or other matter in question (“Claim”) arises out of this Agreement (or
its termination) or your employment (or termination of employment) by the
Company or its Subsidiaries, then, upon the written request of you or us, such
dispute or controversy will be submitted to binding arbitration.  Any arbitration will be conducted in
accordance with the Federal Arbitration Act (“FAA”) and, to the extent
an issue is not addressed by the FAA or the FAA does not apply, with the
then-current National Rules for the Resolution of Employment Disputes of the
American Arbitration Association (“AAA”) or other rules of the AAA as
applicable to the claims asserted.  The
results of arbitration will be binding and conclusive on the parties
hereto.  All parties agree that venue
for arbitration will be in Dallas County, Texas.  If you are the prevailing party, then you will be entitled to
reimbursement by the Company for reasonable attorneys fees, reasonable costs
and other

 

17

 

reasonable expenses pertaining to the arbitration.  All proceedings conducted pursuant to this Section
11(h) will be kept confidential by all parties.  THE ARBITRATORS SHALL HAVE NO
AUTHORITY TO AWARD PUNITIVE DAMAGES UNDER ANY CIRCUMSTANCES (WHETHER IT BE EXEMPLARY
DAMAGES, TREBLE DAMAGES, OR ANY OTHER PENALTY OR PUNITIVE TYPE OF
DAMAGES).  REGARDLESS OF WHETHER SUCH
DAMAGES MAY BE AVAILABLE UNDER TEXAS LAW, YOU AND THE COMPANY EACH HEREBY WAIVE
THE RIGHT, IF ANY, TO RECOVER PUNITIVE DAMAGES IN CONNECTION WITH ANY
CLAIMS.  YOU AND THE COMPANY ACKNOWLEDGE
THAT BY SIGNING THIS AGREEMENT YOU AND THE COMPANY ARE WAIVING ANY RIGHT THAT
YOU OR THE COMPANY MAY HAVE TO A JURY TRIAL OR, OTHER THAN AS EXPRESSLY
PROVIDED BY SECTION 11(f), A TRIAL BEFORE A JUDGE IN CONNECTION WITH, OR
RELATING TO, A CLAIM.

 

(i)            Survival.  Sections 3(e), 4, 5, 6,
7, 8, 9, 10 and 11 of this Agreement will
survive the termination of this Agreement.

 

(j)            Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT REFERENCE
TO PRINCIPLES OF CONFLICT OF LAWS OF TEXAS OR ANY OTHER JURISDICTION, AND,
WHERE APPLICABLE, THE LAWS OF THE UNITED STATES.

 

(k)           Amendments.  This Agreement may not be amended or
modified at any time except by a written instrument approved by the Board and
executed by the Company and you.

 

(l)            Acknowledgement.  You acknowledge that you have read and
understand this Agreement (including its legal effect), have had an opportunity
to consult legal counsel regarding it, have not acted in reliance upon any
representations or promises made by the Company not contained herein, and have
entered into this Agreement freely.

 

(m)          Counterparts.  This Agreement may be executed (including by
facsimile transmission) in any number of counterparts.

 

18

 

By signing and countersigning this Agreement
in the appropriate space set forth below, we and you have agreed to be bound by
the terms and conditions set forth herein, effective as of January 9, 2004.

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  TRAMMELL CROW COMPANY,

  
	
   

  	
  a Delaware
  corporation

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ ROBERT
  E. SULENTIC

  
	
   

  	
  Name:

  	
  Robert E.
  Sulentic

  
	
   

  	
  Title:

  	
  President
  and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  Trammell
  Crow Company

  
	
   

  	
   

  	
  2001 Ross
  Avenue, Suite 3400

  
	
   

  	
   

  	
  Dallas,
  Texas 75201

  
	
   

  	
   

  	
  Attention:
  General Counsel

  
	
   

  	
   

  	
  Telephone:
  (214) 863-3000

  
	
   

  	
   

  	
  Fax: (214)
  863-3125

  
	
   

  	
   

  
	
  ACKNOWLEDGED
  AND AGREED BY EXECUTIVE:

  	
   

  
	
   

  	
   

  
	
  /s/ MICHAEL
  J. LAFITTE

  	
   

  	
   

  
	
  Name:
  Michael J. Lafitte

  	
   

  
	
   

  	
   

  
	
  Address:

  	
  [XXXXXXXXXX]

  	
   

  
	
   

  	
  [XXXXXXXXXX]

  	
   

  
	
   

  	
  Telephone:

  	
   

  	
   

  	
   

  
	
   

  	
  Fax:

  	
   

  	
   

  	
   

  
										

 

19

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