Document:

EXHIBIT
10.5 

FORM OF RBC 2005
LONG-TERM EQUITY INCENTIVE PLAN 

1.             Purpose.

This plan shall be known
as the RBC 2005 Long-Term Equity Incentive Plan (the “Plan”).  The purpose of the Plan shall be to promote
the long-term growth and profitability of RBC Bearings Incorporated (the “Company”)
and its Subsidiaries by (i) providing certain directors, officers and
employees of, and certain other individuals who perform services for, or to
whom an offer of employment has been extended by, the Company and its Subsidiaries
with incentives to maximize stockholder value and otherwise contribute to the
success of the Company and (ii) enabling the Company to attract, retain
and reward the best available persons for positions of responsibility.  Grants (“Grants”) of incentive or
non-qualified stock options, stock appreciation rights (“SARs”), either
alone or in tandem with options, restricted stock, performance awards or any
combination of the foregoing may be made under the Plan.  This Plan supercedes any prior plans, and any
Grant hereunder supercedes any prior written agreement pursuant to which such
Grant is made.

2.             Definitions.

(a)           “Award Agreement” means any
written agreement between the Company and any person pursuant to which the
Company makes any Grant under the Plan.

(b)           “Board of Directors” and “Board”
mean the board of directors of the Company.

(c)           “Cause” means, unless
otherwise defined in any Award Agreement, the occurrence of one or more of the
following events:

(i)            conviction of a felony or any crime
or offense lesser than a felony involving the property of the Company or a
Subsidiary or commission of an act involving fraud or dishonesty; or, in the
case of any of the foregoing, a plea of nolo
contendere with respect thereto;

(ii)           conduct that has caused demonstrable
and serious injury to the Company or a Subsidiary, reputational, monetary or
otherwise;

(iii)          willful refusal to perform or
substantial disregard of duties properly assigned, as determined by the
Company;

(iv)          willful misrepresentation or material
non-disclosure to the Board;

(v)           engaging willfully in misconduct in
connection with the performance of any of one’s duties, including, without
limitation, the misappropriation of funds or securing or

attempting to secure
personally any profit in connection with any transaction entered into on behalf
of the Company or its Subsidiaries or affiliates;

(vi)          willful breach of duty of loyalty to
the Company or, if applicable, a Subsidiary or any other active disloyalty to
the Company or, if applicable, any Subsidiary, including, without limitation,
willfully aiding a competitor or, without duplication of clause (vii),
improperly disclosing confidential information;

(vii)         willful breach of any confidentiality
or non-disclosure agreement with the Company or any Subsidiary; or

(viii)        material violation of any code or
standard of behavior generally applicable to employees (or executive employees,
in the case of an executive of the Company or any Subsidiary) of the Company or
any Subsidiary.

(d)           “Change in Control” means,
unless otherwise defined in any Award Agreement,

(i)            if any “person” or “group” as those
terms are used in Sections 13(d) and 14(d) of the Exchange Act or any
successors thereto, is or becomes the “beneficial owner” (as defined in Rule
13d-3 under the Exchange Act or any successor thereto), directly or indirectly,
of securities of the Company representing 50% or more of the combined voting
power of the Company’s then outstanding securities, provided, that the
acquisition of additional securities by any person or group that owns 50% or
more of the voting power prior to such acquisition of additional securities
shall not be a Change of Control; or

(ii)           during any twelve-month period,
individuals who at the beginning of such period constitute the Board and any
new directors whose election by the Board or nomination for election by the
Company’s stockholders was approved by at least a majority of the directors
then still in office who either were directors at the beginning of the period
or whose election was previously so approved, cease for any reason to
constitute a majority thereof; or

(iii)          the stockholders of the Company
approve a merger or consolidation of the Company with any other corporation,
other than a merger or consolidation (A) which would result in all or a portion
of the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than 50% of the combined
voting power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation or (B) by which the
corporate existence of the Company is not affected and following which the
Company’s chief executive officer and directors retain their positions with the
Company (and constitute at least a majority of the Board); or

(iv)          the stockholders of the Company
approve an agreement for the sale or disposition by the Company of all or
substantially all the Company’s assets.

(e)           “Code”  means the Internal Revenue Code of 1986, as
amended.

 

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(f)            “Committee” means the
Compensation Committee of the Board, which shall consist solely of two or more
outside directors.

(g)           “Common Stock” means the
common stock, par value $0.01 per share, of the Company, and any other
shares into which such stock may be changed by reason of a recapitalization,
reorganization, merger, consolidation or any other change in the corporate
structure or capital stock of the Company.

(h)           “Disability” means a
disability that would entitle an eligible participant to payment of monthly
disability payments under any Company disability plan or as otherwise
determined by the Committee; provided that in any instance where a grant to a
participant is treated as “deferred compensation” within the meaning of Section
409A of the Code, “Disability” shall be interpreted consistently with the
meaning of Section 409A of the Code and guidance issued thereunder.

(i)            “Exchange Act” means the
Securities Exchange Act of 1934, as amended.

(j)            “Fair Market Value” of a
share of Common Stock of the Company means, as of the date in question, the
officially-quoted closing selling price of the stock (or if no selling
price is quoted, the bid price) on the principal securities exchange or market
on which the Common Stock is then listed for trading (including, for this
purpose, the New York Stock Exchange or the Nasdaq National Market) (the “Market”)
for the applicable trading day or, if the Common Stock is not then listed or
quoted in the Market, the Fair Market Value shall be the fair value of the
Common Stock determined in good faith by the Board using any reasonable method;
provided, however, that when shares received upon exercise of an option are
immediately sold in the open market, the net sale price received may be used to
determine the Fair Market Value of any shares used to pay the exercise price or applicable withholding taxes and to
compute the withholding taxes.

(k)           “Incentive Stock Option” means
an option conforming to the requirements of Section 422 of the Code and/or any
successor thereto.

(l)            “Initial Public Offering”
means an underwritten initial public offering and sale of any shares of Common
Stock pursuant to an effective registration statement under the Securities Act.

(m)          “Non-Employee Director”
has the meaning given to such term in Rule 16b-3 under the Exchange Act
and/or any successor thereto.

(n)           “Non-qualified Stock Option”
means any stock option other than an Incentive Stock Option.

(o)           “Other Securities” mean
securities of the Company other than Common Stock, which may include, without
limitation, debentures, unbundled stock units or components thereof, preferred
stock, warrants and securities convertible into or exchangeable for Common
Stock or other property.

 

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(p)           “Retirement” means retirement
as defined under any Company pension plan or retirement program or termination
of one’s employment on retirement with the approval of the Committee; provided
that in any instance where a grant to a participant is treated as “deferred
compensation” within the meaning of Section 409A of the Code, “Retirement”
shall be interpreted consistently with the meaning of Section 409A(a)(2)(A)(i)
of the Code and guidance issued thereunder..

(q)            “Subsidiary” means a corporation
or other entity of which outstanding shares or ownership interests representing
50% or more of the combined voting power of such corporation or other entity
entitled to elect the management thereof, or such lesser percentage as may be
approved by the Committee, are owned directly or indirectly by the Company.

3.             Administration.

The Plan shall be
administered by the Committee; provided that the Board may, in its discretion,
at any time and from time to time, resolve to administer the Plan, in which
case the term “Committee” shall be deemed to mean the Board for all purposes
herein.  Subject to the provisions of the
Plan, the Committee shall be authorized to (i) select persons to
participate in the Plan, (ii) determine the form and substance of Grants
made under the Plan to each participant, and the conditions and restrictions,
if any, subject to which such Grants will be made, (iii) certify that the
conditions and restrictions applicable to any Grant have been met,
(iv) modify the terms of Grants made under the Plan in accordance with the
provisions of Sections 16 and 17 hereof, (v) interpret the Plan and Grants made
thereunder, (vi) make any adjustments necessary or desirable in connection with
Grants made under the Plan to eligible participants located outside the United
States and (vii) adopt, amend, or rescind such rules and regulations, and
make such other determinations, for carrying out the Plan as it may deem
appropriate.  Decisions of the Committee
on all matters relating to the Plan shall be in the Committee’s sole discretion
and shall be conclusive and binding on all parties.  The validity, construction, and effect of the
Plan and any rules and regulations relating to the Plan shall be determined in
accordance with applicable federal and state laws and rules and regulations
promulgated pursuant thereto.  No member
of the Committee and no officer of the Company shall be liable for any action
taken or omitted to be taken by such member, by any other member of the
Committee or by any officer of the Company in connection with the performance
of duties under the Plan, except for such person’s own willful misconduct or as
expressly provided by statute.

The expenses of the Plan
shall be borne by the Company.  The
Company shall not be required to establish any special or separate fund or make
any other segregation of assets to assume the obligations pursuant to any Grant
made under the Plan, and rights to any payment in connection with such Grants
shall be no greater than the rights of the Company’s general creditors.

4.             Shares Available for the Plan. 

Subject to adjustments as
provided in Section 15, an aggregate of 1,139,170 shares of Common Stock, which represents the number of
shares equal to six percent (6%) of the number of shares of Common Stock outstanding
immediately following the consummation of the Company’s Initial Public Offering
(the “Shares”), may be
issued pursuant to the Plan.  Such Shares
may be in whole or in part authorized and unissued or held by the Company as

 

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treasury shares.  If any Grant under the Plan expires or
terminates unexercised, becomes unexercisable or is forfeited as to any Shares,
or is tendered or withheld as to any Shares in payment of the exercise price of
the Grant or taxes payable with respect to the Grant or the vesting or exercise
thereof, then such unpurchased, forfeited, tendered or withheld Shares may
thereafter be available for further Grants under the Plan as the Committee
shall determine.

Without limiting the
generality of the foregoing provisions of this Section 4 or the generality of
the provisions of Sections 3, 6 or 17 or any other section of this Plan, the
Committee may, at any time or from time to time, and on such terms and
conditions (that are consistent with and not in contravention of the other
provisions of this Plan) as the Committee may, in its sole discretion,
determine, enter into agreements (or take other actions with respect to the
Grants) for new Grants containing terms (including exercise prices) more (or
less) favorable than the outstanding Grants.

5.             Participation.

Participation in the Plan
shall be limited to those directors (including Non-Employee Directors),
officers (including non-employee officers) and employees of, and other
individuals performing services for, or to whom an offer of employment has been
extended by, the Company and its Subsidiaries selected by the Committee
(including participants located outside the United States).  Nothing in the Plan or in any Grant
thereunder shall confer any right on a participant to continue in the employ as
a director or officer of, or in any other capacity or in the performance of
services for, the Company or shall interfere in any way with the right of the
Company to terminate the employment or performance of services or to reduce the
compensation or responsibilities of a participant at any time.  By accepting any Grant under the Plan, each
participant and each person claiming under or through him or her shall be
conclusively deemed to have indicated his or her acceptance and ratification of,
and consent to, any action taken under the Plan by the Company, the Board or
the Committee.

Incentive Stock Options
or Non-qualified Stock Options, SARs 
alone or in tandem with options, restricted stock awards, performance
awards or any combination thereof may be granted to such persons and for such
number of Shares as the Committee shall determine (such individuals to whom
Grants are made being sometimes herein called “optionees” or “grantees,” as the
case may be).  Determinations made by the
Committee under the Plan need not be uniform and may be made selectively among
eligible individuals under the Plan, whether or not such individuals are
similarly situated.  A Grant of any type
made hereunder in any one year to an eligible participant shall neither guarantee
nor preclude a further Grant of that or any other type to such participant in
that year or subsequent years.

6.             Incentive and Non-qualified Options and SARs.

The Committee may from
time to time grant to eligible participants Incentive Stock Options, Non-qualified
Stock Options, or any combination thereof; provided that the Committee may
grant Incentive Stock Options only to eligible employees of the Company or its
subsidiaries (as defined for this purpose in Section 424(f) of the Code or any
successor thereto).  In any one calendar
year, the Committee shall not grant to any one participant options or SARs to
purchase or receive the economic equivalent of a number of shares of Common
Stock in excess of 10% of the total number

 

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of Shares authorized
under the Plan pursuant to Section 4; provided, however, that the
Committee shall be permitted to grant to Dr. Michael J. Hartnett up
to 40% of the total number of Shares authorized under the plan at any time.  The options granted shall take such form as
the Committee shall determine, subject to the following terms and conditions.

It is the Company’s
intent that Non-qualified Stock Options granted under the Plan not be
classified as Incentive Stock Options, that Incentive Stock Options be
consistent with and contain or be deemed to contain all provisions required
under Section 422 of the Code or any successor thereto, that neither any
Non-qualified Stock Option nor any Incentive Stock Option be treated as a
payment of deferred compensation for the purposes of Section 409A of the Code
and any successor thereto, and that any ambiguities in construction be
interpreted in order to effectuate such intent. 
If an Incentive Stock Option granted under the Plan does not qualify as
such for any reason, then to the extent of such non-qualification, the
stock option represented thereby shall be regarded as a Non-qualified
Stock Option duly granted under the Plan, provided that such stock option
otherwise meets the Plan’s requirements for Non-qualified Stock Options.

(a)           Price.  The price per Share deliverable upon the
exercise of each option (“exercise price”) shall not be less than 100% of the
Fair Market Value of a share of Common Stock as of the date of Grant of the
option, and in the case of the Grant of any Incentive Stock Option to an
employee who, at the time of the Grant, owns more than 10% of the total
combined voting power of all classes of stock of the Company or any of its
Subsidiaries, the exercise price may not be less than 110% of the Fair Market
Value of a share of Common Stock as of the date of Grant of the option, in each
case unless otherwise permitted by Section 422 of the Code or any successor
thereto.

(b)           Payment.  Options may be exercised, in whole or in
part, upon payment of the exercise price of the Shares to be acquired. Unless
otherwise determined by the Committee, payment shall be made (i) in cash
(including check, bank draft, money order or wire transfer of immediately
available funds), (ii) by delivery of outstanding shares of Common Stock with a
Fair Market Value on the date of exercise equal to the aggregate exercise price
payable with respect to the options’ exercise, (iii) by simultaneous sale
through a broker reasonably acceptable to the Committee of Shares acquired on
exercise, as permitted under Regulation T of the Federal Reserve Board, (iv) by
authorizing the Company to withhold from issuance a number of Shares issuable
upon exercise of the options which, when multiplied by the Fair Market Value of
a share of Common Stock on the date of exercise, is equal to the aggregate
exercise price payable with respect to the options so exercised or (v) by any
combination of the foregoing.

In the event a grantee
elects to pay the exercise price payable with respect to an option pursuant to
clause (ii) above, (A) only a whole number of share(s) of Common Stock (and not
fractional shares of Common Stock) may be tendered in payment, (B) such grantee
must present evidence acceptable to the Company that he or she has owned any
such shares of Common Stock tendered in payment of the exercise price (and that
such tendered shares of Common Stock have not been subject to any substantial
risk of forfeiture) for at least six months prior to the date of exercise, and
(C) Common Stock must be delivered to the Company.  Delivery for this purpose may, at the
election of the grantee, be made either by (A) physical delivery of the
certificate(s) for all such shares of Common Stock tendered in payment of the
price, accompanied by duly executed instruments of transfer in a form
acceptable to the Company, or (B) direction to the grantee’s broker to
transfer, by book entry, of such shares of Common Stock from a brokerage
account of the grantee to a brokerage account specified by the Company.  When payment of the exercise price is made by
delivery of

 

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Common Stock, the
difference, if any, between the aggregate exercise price payable with respect
to the option being exercised and the Fair Market Value of the shares of Common
Stock tendered in payment (plus any applicable taxes) shall be paid in
cash.  No grantee may tender shares of
Common Stock having a Fair Market Value exceeding the aggregate exercise price
payable with respect to the option being exercised (plus any applicable taxes).

In the event a
grantee elects to pay the exercise price payable with respect to an option
pursuant to clause (iv) above, only a whole number of Shares (and not
fractional Shares) may be withheld in payment. 
When payment of the exercise price is made by withholding of Shares, the
difference, if any, between the aggregate exercise price payable with respect
to the option being exercised and the Fair Market Value of the Shares withheld
in payment (plus any applicable taxes) shall be paid in cash.  No grantee may authorize the withholding of
Shares having a Fair Market Value exceeding the aggregate exercise price
payable with respect to the option being exercised (plus any applicable
taxes).  Any withheld Shares shall no
longer be issuable under such option.

(c)           Terms of Options; Vesting.  The term during which each option may be
exercised shall be determined by the Committee, but if required by the Code and
except as otherwise provided herein, no option shall be exercisable in whole or
in part more than ten years from the date it is granted, and no Incentive Stock
Option granted to an employee who at the time of the Grant owns more than 10%
of the total combined voting power of all classes of stock of the Company or
any of its Subsidiaries shall be exercisable more than five years from the date
it is granted.  All rights to purchase
Shares pursuant to an option shall, unless sooner terminated, expire at the
date designated by the Committee.  The
Committee shall determine the date on which each option shall become
exercisable and may provide that an option shall become exercisable in
installments.  The Shares constituting
each installment may be purchased in whole or in part at any time after such
installment becomes exercisable, subject to such minimum exercise requirements
as may be designated by the Committee. 
Prior to the exercise of an option and delivery of the Shares
represented thereby, the optionee shall have no rights as a stockholder with
respect to any Shares covered by such outstanding option (including any
dividend or voting rights).

(d)           Limitations on Grants. If
required by the Code, the aggregate Fair Market Value (determined as of the
Grant date) of Shares for which an Incentive Stock Option is exercisable for
the first time during any calendar year under all equity incentive plans of the
Company and its Subsidiaries (as defined in Section 422 of the Code or any
successor thereto) may not exceed $100,000.

(e)           Termination; Forfeiture.

(i)            Death or Disability.  Unless otherwise provided in any Award
Agreement, if a participant ceases to be a director, officer or employee of, or
to perform other services for, the Company and any Subsidiary due to death or
Disability, (A) all of the participant’s options and SARs that were
exercisable on the date of death or Disability shall remain exercisable for,
and shall otherwise terminate at the end of, a period of one year after the
date of death or Disability, but in no event after the expiration date of the
options and SARs and (B) all of the participant’s options and SARs that
were not exercisable on the date of death or Disability shall be forfeited
immediately upon such death or Disability; provided, however, that the
Committee may

 

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determine to additionally
vest such options and SARs, in whole or in part, in its discretion.  Notwithstanding the foregoing, if the
Disability giving rise to the termination of employment is not within the
meaning of Section 22(e)(3) of the Code or any successor thereto, Incentive
Stock Options not exercised by such participant within one year after the date
of termination of employment will cease to qualify as Incentive Stock Options
and will be treated as Non-qualified Stock Options under the Plan if
required to be so treated under the Code.

(ii)           Retirement.  Unless otherwise provided in any Award
Agreement, if a participant ceases to be a director, officer or employee of, or
to perform other services for, the Company and any Subsidiary upon the
occurrence of his or her Retirement, (A) all of the participant’s options
and SARs that were exercisable on the date of Retirement shall remain
exercisable for, and shall otherwise terminate at the end of, a period of 90
days after the date of Retirement, but in no event after the expiration date of
the options or SARs; provided that the participant does not engage in Competition
during such 90-day period unless he or she receives written consent to do so
from the Board or the Committee, and (B) all of the participant’s options
and SARs that were not exercisable on the date of Retirement shall be forfeited
immediately upon such Retirement; provided, however, that such options and
SARs, may become fully vested and exercisable in the discretion of the
Committee.  Notwithstanding the
foregoing, Incentive Stock Options not exercised by such participant within 90
days after Retirement will cease to qualify as Incentive Stock Options and will
be treated as Non-qualified Stock Options under the Plan if required to be so
treated under the Code.

(iii)          Discharge for Cause.  Unless determined by the Committee, if a
participant ceases to be a director, officer or employee of, or to perform
other services for, the Company or a Subsidiary due to Cause, or if a
participant does not become a director, officer or employee of, or does not
begin performing other services for, the Company or a Subsidiary for any
reason, all of the participant’s options and SARs shall expire and be forfeited
immediately upon such cessation or non-commencement, whether or not then
exercisable.

(iv)          Other Termination.  If a participant ceases to be a director,
officer or employee of, or to otherwise perform services for, the Company or a
Subsidiary for any reason other than death, Disability, Retirement or Cause,
(A) all of the participant’s options and SARs that were exercisable on the
date of such cessation shall remain exercisable for, and shall otherwise
terminate at the end of, a period of 30 days after the date of such cessation,
but in no event after the expiration date of the options or SARs; provided that
the participant does not engage in Competition during such 30-day period unless
he or she receives written consent to do so from the Board or the Committee,
and (B) all of the participant’s options and SARs that were not
exercisable on the date of such cessation shall be forfeited immediately upon
such cessation.

(v)           Change of Control. 
If there is a Change in Control of the Company or similar event, the
Committee may, in its discretion, provide for the vesting of a participant’s
options and SARs on such terms and conditions as it deems appropriate in such
participant’s Award Agreement.

 

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7.             Stock Appreciation Rights.

Provided that the Company’s
stock is traded on an established securities market, the Committee shall have
the authority to grant SARs under this Plan, subject to such terms and
conditions specified in this paragraph 7 and any additional terms and
conditions as the Committee may specify.

No SAR may be issued
unless (a) the exercise price of the SAR may never be less than the Fair Market
Value of the underlying Shares on the date of grant and (b) the SAR does not
include any feature for the deferral of compensation income other than the
deferral of recognition of income until the exercise of the SAR.

No SAR may be exercised
unless the Fair Market Value of a share of Common Stock of the Company on the date
of exercise exceeds the exercise price of the SAR.  Prior to the exercise of the SAR and delivery
of the Shares represented thereby, the participant shall have no rights as a
stockholder with respect to Shares covered by such outstanding SAR (including
any dividend or voting rights).

Upon the exercise of an
SAR, the participant shall be entitled to a distribution in an amount equal to
the difference between the Fair Market Value of a share of Common Stock on the
date of exercise and the exercise price of the SAR, multiplied by the number of
Shares as to which the SAR is exercised. 
Such distribution shall be made in Shares having a Fair Market Value
equal to such amount.

All SARs will be
exercised automatically on the last day prior to the expiration date of the SAR
so long as the Fair Market Value of a share of Common Stock on that date
exceeds the exercise price of the SAR or any related option, as applicable.

The provisions of
Subsections 6(c) shall apply to all SARs except to the extent that the Award
Agreement pursuant to which such Grant is made expressly provides otherwise.

It is the Company’s
intent that no SAR shall be treated as a payment of deferred compensation for
purposes of Section 409A of the Code and that any ambiguities in construction be
interpreted in order to effectuate such intent.

8.             Restricted Stock.

The Committee may at any
time and from time to time grant Shares of restricted stock under the Plan to
such participants and in such amounts as it determines.  Each Grant of restricted stock shall specify
the applicable restrictions on such Shares, the duration of such restrictions,
and the time or times at which such restrictions shall lapse with respect to
all or a specified number of Shares that are part of the Grant.

The participant will be
required to pay the Company the aggregate par value of any Shares of restricted
stock (or such larger amount as the Board may determine to constitute capital
under Section 154 of the Delaware General Corporation Law, as amended, or any
successor thereto) within 15 days
of the date of Grant, unless such Shares of restricted stock are treasury
shares.  Unless

 

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otherwise
determined by the Committee, certificates representing Shares of restricted
stock granted under the Plan will be held in escrow by the Company on the
participant’s behalf during any period of restriction thereon and will bear an
appropriate legend specifying the applicable restrictions thereon, and the
participant will be required to execute a blank stock power therefor.  Except as otherwise provided by the
Committee, during such period of restriction the participant shall have all of
the rights of a holder of Common Stock, including but not limited to the rights
to receive dividends and to vote, and any stock or other securities received as
a distribution with respect to such participant’s restricted stock shall be
subject to the same restrictions as then in effect for the restricted stock.

Unless otherwise provided
in any Award Agreement, at such time as a participant ceases to be a director,
officer or employee of, or to otherwise perform services for, the Company and
its Subsidiaries due to death, Disability or Retirement during any period of
restriction, all Shares of restricted stock granted to such participant on
which the restrictions have not lapsed shall be immediately forfeited to the
Company.  If there is a Change in Control
of the Company or similar event, the Committee may, in its discretion, provide
for the lapsing of restrictions on a participant’s Shares of restricted stock
on such terms and conditions as it deems appropriate in such participant’s
Award Agreement.  At such time as a participant ceases to
be, or in the event a participant does not become, a director, officer or
employee of, or otherwise perform services for, the Company or its Subsidiaries
for any other reason, all Shares of restricted stock granted to such
participant on which the restrictions have not lapsed shall be immediately
forfeited to the Company.  The provisions
of Subsections 6(c) and (e) shall apply to Restricted Stock except to the
extent that the Award Agreement in relation thereto expressly provides
otherwise.

It is the Company’s
intent that Restricted Stock shall not be treated as a payment of deferred
compensation for purposes of Section 409A of the Code and that any ambiguities
in construction be interpreted in order to effectuate such intent.

9.             Performance Awards.

Performance awards may be
granted to participants at any time and from time to time as determined by the
Committee.  The Committee shall have
complete discretion in determining the size and composition of performance
awards granted to a participant.  The
period over which performance is to be measured (a “performance cycle”) shall
commence on the date specified by the Committee and shall end on the last day
of a fiscal year specified by the Committee. 
A performance award shall be paid no later than the fifteenth day of the
third month following the completion of a performance cycle (or following the
elapsed portion of the performance cycle, in the circumstances described in the
last paragraph of this Section 9). 
Performance awards may include (i) specific dollar-value
target awards (ii) performance units, the value of each such unit being
determined by the Committee at the time of issuance, and/or
(iii) performance Shares, the value of each such Share being equal to the
Fair Market Value of a share of Common Stock. 
In any one calendar year, the Committee shall not grant to any one participant
performance awards in excess of 10% of the total number of Shares authorized
under the Plan pursuant to Section 4; provided, however, that the
Committee shall be permitted to grant Dr. Michael J. Hartnett up to
40% of the total number of Shares authorized under the plan at any time.

The value of each
performance award may be fixed or it may be permitted to fluctuate based on a
performance factor (e.g., return on equity) selected by the Committee.  It is the

 

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Company’s intent
that no performance award be treated as the payment of deferred compensation
for purposes of Section 409A of the Code and that any ambiguities in
construction be interpreted in order to effectuate such intent.

The Committee shall
establish performance goals and objectives for each performance cycle on the
basis of such criteria and objectives as the Committee may select from time to
time, including, without limitation, the performance of the participant, the
Company, one or more of its Subsidiaries or divisions or any combination of the
foregoing.  During any performance cycle,
the Committee shall have the authority to adjust the performance goals and
objectives for such cycle for such reasons as it deems equitable.

The Committee shall
determine the portion of each performance award that is earned by a participant
on the basis of the Company’s performance over the performance cycle in
relation to the performance goals for such cycle. The earned portion of a
performance award may be paid out in Shares, cash, Other Securities, or any
combination thereof, as the Committee may determine.

A participant must be a
director, officer or employee of, or otherwise perform services for, the
Company or its Subsidiaries at the end of the performance cycle in order to be
entitled to payment of a performance award issued in respect of such cycle;
provided, however, that except as otherwise determined by the Committee, if a
participant ceases to be a director, officer or employee of, or to otherwise
perform services for, the Company and its Subsidiaries upon his or her death,
Retirement, or Disability prior to the end of the performance cycle, the
Committee may provide in a Grant that the participant may earn a proportionate
portion of the performance award based upon the elapsed portion of the
performance cycle and the Company’s performance over that portion of such
cycle.

10.           Withholding Taxes.

(a)           Participant Election.  Unless otherwise determined by the Committee,
a participant may elect to deliver shares of Common Stock (or have the Company
withhold shares acquired upon exercise of an option or SAR or deliverable upon
grant or vesting of restricted stock, as the case may be) to satisfy, in whole
or in part, the amount the Company is required to withhold for taxes in
connection with the exercise of an option or SAR or the delivery of restricted
stock upon grant or vesting, as the case may be.  Such election must be made on or before the
date the amount of tax to be withheld is determined.  Once made, the election shall be
irrevocable.  The fair market value of
the shares to be withheld or delivered will be the Fair Market Value as of the
date the amount of tax to be withheld is determined.  In the event a participant elects to deliver
or have the Company withhold shares of Common Stock pursuant to this Section
10(a), such delivery or withholding must be made subject to the conditions and
pursuant to the procedures set forth in Section 6(b) with respect to the
delivery or withholding of Common Stock in payment of the exercise price of
options.

(b)           Company Requirement.  The Company may require, as a condition to
any Grant or exercise under the Plan or to the delivery of certificates for
Shares issued hereunder, that the grantee make provision for the payment to the
Company, either pursuant to Section 10(a) or this Section 10(b), of federal, state
or local taxes of any kind required by law to be withheld with respect

 

11

to any Grant or delivery of Shares.  The Company, to the extent permitted or
required by law, shall have the right to deduct from any payment of any kind
(including salary or bonus) otherwise due to a grantee, an amount equal to any
federal, state or local taxes of any kind required by law to be withheld with
respect to any grant or delivery of Shares under the Plan.

11.           Written Agreement.

Each employee to whom a
Grant is made under the Plan shall enter into an Award Agreement with the
Company that shall contain such provisions consistent with the provisions of
the Plan, as may be approved by the Committee.

12.           Transferability.

Unless the Committee
determines otherwise, no option, SAR, performance award or restricted stock
granted under the Plan shall be transferable by a participant other than by
will or the laws of descent and distribution; provided that, in the case of
Shares of restricted stock granted under the Plan, such Shares of restricted
stock shall be freely transferable following the time at which such
restrictions shall have lapsed with respect to such Shares.  Unless the Committee determines otherwise, an
option, SAR or performance award may be exercised only by the optionee or
grantee thereof; by his or her executor or administrator, the executor or
administrator of the estate of any of the foregoing, or any person to whom the
option, SAR or performance award is transferred by will or the laws of descent
and distribution; or by his or her guardian or legal representative; or the
guardian or legal representative of any of the foregoing; provided that
Incentive Stock Options may be exercised by any guardian or legal
representative only if permitted by the Code and any regulations
thereunder.  All provisions of this Plan
and any Award Agreement referred to in Section 11 shall in any event continue
to apply to any option, SAR, performance award or restricted stock granted
under the Plan and transferred as permitted by this Section 12, and any
transferee of any such option, SAR, performance award or restricted stock shall
be bound by all provisions of this Plan and any agreement referred to in
Section 11 as and to the same extent as the applicable original grantee.

13.           Listing, Registration and
Qualification.

If the Committee
determines that the listing, registration or qualification upon any securities
exchange or under any law of Shares subject to any option, SAR, performance
award or restricted stock Grant is necessary or desirable as a condition of, or
in connection with, the granting of same or the issue or purchase of Shares
thereunder, no such option or SAR may be exercised in whole or in part, no such
performance award may be paid out, and no Shares may be issued, unless such
listing, registration or qualification is effected free of any conditions not
acceptable to the Committee.

14.           Transfer of Employee.

The transfer of an
employee from the Company to a Subsidiary, from a Subsidiary to the Company, or
from one Subsidiary to another shall not be considered a termination of
employment; nor shall it be considered a termination of employment if an
employee is placed on

 

12

military or sick
leave or such other leave of absence which is considered by the Committee as
continuing intact the employment relationship.

15.           Adjustments.

In the event of a
reorganization, recapitalization, spin-off or other extraordinary distribution,
stock split, stock dividend, combination of shares, merger, consolidation,
distribution of assets, spin-off or other extraordinary distribution, or any
other change in the corporate structure or shares of the Company, the Committee
shall make such adjustment as it deems appropriate in the number and kind of
Shares or other property available for issuance under the Plan (including,
without limitation, the total number of Shares available for issuance under the
Plan pursuant to Section 4), in the number and kind of options, SARs, Shares or
other property covered by Grants previously made under the Plan, and in the
exercise price of outstanding options and SARs. 
Any such adjustment shall be final, conclusive and binding for all
purposes of the Plan.  In the event of
any merger, consolidation or other reorganization in which the Company is not
the surviving or continuing corporation or in which a Change in Control is to
occur, all of the Company’s obligations regarding options, SARs, performance
awards, and restricted stock that were granted hereunder and that are
outstanding on the date of such event shall, on such terms as may be approved
by the Committee prior to such event, be (a) assumed by the surviving or
continuing corporation; or (b) canceled in exchange for cash, securities of the
acquiror or other property; provided that, in the case of clause (b), (i) such
merger, consolidation, other reorganization or Change in Control constitutes a “change
in ownership or control” of the Company or a “change in the ownership of a
substantial portion” of the Company’s assets within the meaning of Section
409A(a)(2)(A)(v) of the Code and the guidance issued thereunder or (ii) the
payment of cash, securities or other property is not treated as a payment of “deferred
compensation” under Section 409A of the Code.

Without limitation of the
foregoing, in connection with any transaction described in of the last sentence
of the preceding paragraph, the Committee may, in its discretion, (i) cancel
any or all outstanding options under the Plan in consideration for payment to
the holders thereof of an amount equal to the portion of the consideration that
would have been payable to such holders pursuant to such transaction if their
options had been fully exercised immediately prior to such transaction, less
the aggregate exercise price that would have been payable therefor, or (ii) if
the amount that would have been payable to the option holders pursuant to such
transaction if their options had been fully exercised immediately prior thereto
would be equal to or less than the aggregate exercise price that would have
been payable therefor, cancel any or all such options for no consideration or
payment of any kind.  Payment of any
amount payable pursuant to the preceding sentence may be made in cash or, in
the event that the consideration to be received in such transaction includes
securities or other property, in cash, securities of the acquiror or other
property in the Committee’s discretion.

16.           Amendment and Termination of the
Plan.

Except as otherwise
provided in an Award Agreement, the Board of Directors, without approval of the
stockholders, may amend or terminate the Plan, except that no amendment shall
become effective without prior approval of the stockholders of the Company if
stockholder approval would be required by applicable law or regulations,
including if required for continued

 

13

compliance with
the performance-based compensation exception of Section 162(m) of
the Code or any successor thereto, under the provisions of Section 409A of the
Code or any successor thereto, under the provisions of Section 422 of the Code
or any successor thereto, or by any listing requirement of the principal stock
exchange on which the Common Stock is then listed.

17.           Amendment or Substitution of
Grants under the Plan.

The terms of any
outstanding Grant under the Plan may be amended from time to time by the
Committee in its discretion in any manner that it deems appropriate including,
but not limited to, acceleration of the date of exercise of any Grant and/or
payments thereunder or of the date of lapse of restrictions on Shares (but, in
the case of a Grant that is or would be treated as “deferred compensation” for
purposes of Section 409A of the Code, only to the extent permitted by guidance
issued under Section 409A of the Code); provided that, except as otherwise
provided in Section 16 or in an Award Agreement, no such amendment shall
adversely affect in a material manner any right of a participant under the
Grant without his or her written consent, and further provided that the
Committee shall not reduce the exercise price of any options or SARs awarded
under the Plan.  The Committee may, in
its discretion, permit holders of Grants under the Plan to surrender
outstanding Grants in order to exercise or realize rights under other Grants,
or in exchange for new Grants, or require holders of Grants to surrender
outstanding Grants as a condition precedent to the receipt of new Grants under
the Plan, but only if such surrender, exercise, realization, exchange or Grant
(a) is not treated as a payment of, and does not cause a Grant to be treated as,
deferred compensation for the purposes of Section 409A of the Code or (b) is
permitted under guidance issued pursuant to Section 409A of the Code.

18.           Commencement Date; Termination
Date.

The date of commencement
of the Plan shall be                  ,
2005, subject to approval by the shareholders of the Company.  If required by the Code, the Plan will also
be subject to reapproval by the shareholders of the Company prior to                   , 2010.

Unless previously
terminated upon the adoption of a resolution of the Board terminating the Plan,
the Plan shall terminate at the close of business on                     , 2015.  Subject to the provisions of an Award
Agreement, which may be more restrictive, no termination of the Plan shall
materially and adversely affect any of the rights or obligations of any person,
without his or her written consent, under any Grant of options or other
incentives theretofore granted under the Plan.

19.           Severability.

Whenever possible, each
provision of the Plan shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of the Plan is held to be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of the Plan.

 

14

20.           Governing Law.

The Plan shall be
governed by the corporate laws of the State of 
Delaware, without giving effect to any choice of law provisions that
might otherwise refer construction or interpretation of the Plan to the
substantive law of another jurisdiction.

21.           Compliance Amendments.

Except as otherwise
provided in an Award Agreement, notwithstanding any of the foregoing provisions
of the Plan, and in addition to the powers of amendment set forth in Sections
16 and 17 hereof, the provisions hereof and the provisions of any award made
hereunder may be amended unilaterally by the Company from time to time to the
extent necessary (and only to the extent necessary) to prevent the
implementation, application or existence (as the case may be) of any such
provision from (i) requiring the inclusion of any compensation deferred
pursuant to the provisions of the Plan (or an award thereunder) in a
participant’s gross income pursuant to Section 409A of the Code, and the
regulations issued thereunder from time to time and/or (ii) inadvertently
causing any award hereunder to be treated as providing for the deferral of
compensation pursuant to such Code section and regulations.

 

15Exhibit
10.16

 

AGREEMENT

 

Between

 

NICE BALL
BEARINGS, INC.

AN
RBC COMPANY

 

and

 

UNITED
STEELWORKERS OF AMERICA (AFL-CIO)

LOCAL 6816-12

 

Effective
JANUARY 8, 2005

 

 

TABLE OF
CONTENTS

 

	
  ARTICLE

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
  Parties to the Agreement

  	
   

  
	
  2

  	
   

  	
  Union Recognition

  	
   

  
	
  3

  	
   

  	
  Management Rights

  	
   

  
	
  4

  	
   

  	
  Union Security and Check-off

  	
   

  
	
  5

  	
   

  	
  Non-Discrimination

  	
   

  
	
  6

  	
   

  	
  Structure and Decision-Making Process

  	
   

  
	
  7

  	
   

  	
  Work Performed Outside the Bargaining Unit

  	
   

  
	
  8

  	
   

  	
  Multi Machine Operator Program

  	
   

  
	
  9

  	
   

  	
  Training

  	
   

  
	
  10

  	
   

  	
  Probationary Period

  	
   

  
	
  11

  	
   

  	
  Seniority

  	
   

  
	
  12

  	
   

  	
  Layoffs and Recall to Work

  	
   

  
	
  13

  	
   

  	
  Open Jobs

  	
   

  
	
  14

  	
   

  	
  Leave of Absence

  	
   

  
	
  15

  	
   

  	
  Overtime

  	
   

  
	
  16

  	
   

  	
  Wages and Other Compensation

  	
   

  
	
  17

  	
   

  	
  New Products

  	
   

  
	
  18

  	
   

  	
  Shift Premium

  	
   

  
	
  19

  	
   

  	
  Temporary Transfers

  	
   

  
	
  20

  	
   

  	
  Vacations

  	
   

  
	
  21

  	
   

  	
  Holidays

  	
   

  
	
  22

  	
   

  	
  Safety and Health

  	
   

  
	
  23

  	
   

  	
  Union Facilities

  	
   

  
	
  24

  	
   

  	
  Dispute Resolution

  	
   

  
	
  25

  	
   

  	
  Living Agreement

  	
   

  
	
  26

  	
   

  	
  Insurance

  	
   

  
	
  27

  	
   

  	
  Pension Benefits

  	
   

  
	
  28

  	
   

  	
  Waiver of Any Clause

  	
   

  
	
  29

  	
   

  	
  Good Faith

  	
   

  
	
  30

  	
   

  	
  General

  	
   

  
	
  31

  	
   

  	
  Plant Shutdown

  	
   

  
	
  32

  	
   

  	
  Duration of Agreement

  	
   

  
	
   

  	
   

  
	
  APPENDIX A-Tier 1

  	
   

  
	
  APPENDIX A-Tier 2

  	
   

  
	
  APPENDIX B-Memorandum of Understanding

  	
   

  

 

1

 

ARTICLE 1

PARTIES
TO THE AGREEMENT

 

This
Agreement is entered into between NICE BALL BEARINGS, INC. – AN RBC COMPANY (“RBC”
or the “Company” or the “Employer”) and the UNITED STEELWORKERS OF AMERICA,
AFL-CIO, on behalf of itself and the members of Local Union No. 6816-12
(the “Union”).

 

ARTICLE 2

UNION
RECOGNITION

 

The Company recognizes
the Union as the certified collective bargaining agent for all of its
production and maintenance employees engaged on jobs at its plant in
Kulpsville, Pennsylvania, excluding clerical employees, general office
employees, and supervisory employees pursuant and subject to the provisions of
the Labor-Management Relations Act of 1947 and amendments thereto.   The Company recognizes the right of labor to
organize in order to promote the interests and welfare of labor and to bargain
effectively and will not interfere with the right of employees to become
members of the Union, nor will it discriminate against employees for filing or
causing to be filed a just grievance or because of membership in the Union, or
against any officer or representative elected or appointed to act in behalf of
the Union pursuant to the terms of the Agreement.

 

ARTICLE 3

MANAGEMENT RIGHTS

 

The parties recognize
that all functions of management are reserved exclusively to the Company,
except insofar as they are delegated or shared pursuant to the terms of this
Agreement.  These functions include the
management of the business, the determination of the products, methods,
processes, and means of manufacturing, the establishment of the size and
direction of the workforce, the setting of work schedules, the rights to hire,
promote, demote, layoff, transfer, discipline, discharge for proper cause and
establishing fair efficiencies and work rules.

 

ARTICLE 4

UNION SECURITY AND CHECK-OFF

 

To the extent permitted
by law, all bargaining unit members shall be required, as a condition of
employment, to acquire and maintain membership in the Union immediately upon
completion of thirty (30) days of employment or the effective date of this
agreement, whichever is the later.

 

The Company will provide
for check-off of union dues and initiation fees on behalf of employees who
request such a service in accordance with prevailing law.  The Company agrees to compute union dues on
the basis of earnings in the preceding month. 
In case of earnings of less than sixteen (16) hours, dues will not be
deducted.  They will be deducted from the
next pay which is sixteen (16) or more hours. 
Further, the Company will deduct $5.00 from one pay per year for P.A.C.
for those employees who have so directed. 
The Union shall indemnify and save RBC harmless with respect to any
claims or expenses arising out of any action taken as or not taken by RBC for
the purpose of complying with this Article.

 

ARTICLE 5

NON-DISCRIMINATION

 

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

 

2

 

ARTICLE 6

STRUCTURE AND DECISION-MAKING
PROCESS

 

UNION PLANT COMMITTEE:

The Union Plant Committee
is elected by the Union members according to the Union bylaws and will be
comprised of the President, Vice President and Area Grievance Chairman.   However, the current committee members will
continue in office for the balance of their term or until they resign or are
removed by the Union, whichever occurs first. 
Union Plant Committee members will have top seniority for layoffs and
recall purposes.  They will be assigned
to serve on the Plant Council and the other committees created by this
Agreement as the Union sees fit.

 

PLANT COUNCIL:

A consultative employee
group, consisting of the Union Plant Committee and an equal number of
representatives from the Company, which includes the Plant Manager or his
designee, will meet to discuss unresolved issues affecting the entire plant or
which have not been resolved through previous discussions.   The Plant Council will seek to reach
agreement through consensus.  The Plant
Council meetings will meet as often as necessary, at least weekly, unless
mutually agreed not to meet.

 

ARTICLE 7

WORK PERFORMED OUTSIDE THE
BARGAINING UNIT

 

1.    It is not the intent of the Company to
subcontract work provided there is sufficient manpower, skills, abilities, and
equipment in the plant to timely and economically perform the work involved.  The Company will notify the Union of
scheduled subcontracting at the weekly Plant Council meeting, including a brief
description of the work to be performed, and reasons for having it performed by
an outside contractor.  If such notice is
not feasible, the Company will verbally contact a representative so designated
by the Union.  The Union shall have the
right to file a grievance regarding the Company’s action at Step 3 of Article 24.

 

2.   The parties shall conform to the principle
that non-bargaining unit employees shall not perform any operation that would
deprive bargaining unit employees of their regular work.  Non-bargaining unit employees may be used to
perform experimental work, with or without the assistance of employees in the
bargaining unit, as management determines. 
Experimental work is defined to mean all work involved in the
development of new, different or modified products, parts, tools or
equipment.  Non-bargaining unit employees
may also be used in cases of emergency or training.

 

ARTICLE 8

MULTI-MACHINE OPERATOR PROGRAM

 

All
employees hired after October 25, 2003 will be hired in the multi-machine
operator position.  Current employees may
elect to be reclassified as multi-machine operators.  If a multi-machine operator, at step five,
has the appropriate skills as determined in his annual evaluation, the employee
will move to the next level even if a position is not available.  Employees in the multi-machine operator
classification may be assigned by the Company to perform any function the
employee has the skill and ability to perform.

 

Newly
hired multi-machine operators will normally be placed on the multi-machine
operator grid at level three, step one, however, an employee who possesses
appropriate skills may be placed at a higher level step one.

 

Existing
employees who convert to a multi-machine operator shall retain their current
level and step in the existing employee pay scale.

 

On
their anniversary date, and each six months there-after, multi machine
operators below step five, will receive an employee performance
evaluation.  The minimum points to
advance to the steps are as follows:

 

	
  Step

  	
   

  	
  Points

  
	
  5

  	
   

  	
  91-100

  
	
  4

  	
   

  	
  81-90

  
	
  3

  	
   

  	
  71-80

  
	
  2

  	
   

  	
  60-70

  
	
  1

  	
   

  	
  Below 60

  

 

3

 

An employee may not
advance more than one step at each rating.

 

Once a multi-machine
operator has reached step five, he will receive an annual performance
evaluation.  The employee shall then move
to the next higher level if the employee has the appropriate skills even if an
open position is not available.

 

To move to the next
higher level, the multi-machine operator will have to possess the skills set
forth in the job description for that level. 
Job descriptions will be reviewed by Plant Council.  The multi-machine operator’s level and step
will remain the same (present level reaching through qualification and
evaluation) no matter what job classification performed.

 

Once a multi-machine
operator has advanced to a level and step, he will retain that level and step
even if he does not achieve the appropriate number of points for his current
level and step.  In these circumstances,
the multi-machine operator will be placed on a performance improvement program.

 

If there is a dispute
over an employee’s performance evaluation the matter will be subject to review
by Plant Council.  If the Plant Council
does not reach agreement, the employee will receive another review by a
different reviewer and the higher score of the initial review or second review will
be the employee’s rating.  Failure to
reach resolution by the above method could make the matter, subject to a
grievance/arbitration procedure.

 

Current employees who do
not wish to transition to the multi-machine operator classification will be
permitted to retain their current job classification and level and will be
placed on the appropriate level and step with their current pay level.  Those employees will participate in the
employee performance evaluation each six months and may move to the next step.  The minimum points to advance to the next
step will be the same as for the multi-machine operators.  Those employees who are placed on step five
of a level will receive an annual performance evaluation and if eligible and
qualified could advance to the next level at step five if an open position
exists.

 

Employees at step five
will receive wage increases if the step five level is increased.

 

As detailed in article nine
the company intends to develop two training positions.  The training positions will be posted in the
same manner as open jobs are posted in article thirteen.  The successful bidder will have to meet the
minimum requirements of the training position.

 

An employee may elect to
become a multi-machine operator at any time by accepting an open job posting
and declaring their switch to a multi-machine operator, except after notice of
a lay-off and between the notice and actual lay-off.

 

If an employee’s
anniversary occurs while the employee is participating in a multi-machine
operator training slot, the employee will receive an evaluation at the
completion of training and be eligible for advancement at that time to the next
level.  Step evaluations will take place
at the normal six month cycle.

 

ARTICLE 9

TRAINING

 

The company will post a
skills matrix representing the qualified skills each employee has
acquired.  This matrix in combination
with the present business needs will determine job classification training
needs.  The company will have two (2) training
positions available for continual skill training of the workforce.  These positions will be added based on
company business conditions which will be reviewed on a quarterly basis within
the plant council.  Trainees for the
training positions will be through job postings.  The two (2) training positions will be
in different job classifications. 
Additional training will be based on business conditions.  Selections for additional training will be
determined by employee desire to advance and their seniority.

 

4

 

ARTICLE 10

PROBATIONARY PERIOD

 

1.    An employee may acquire seniority rights by
working ninety (90) continuous days, in which event the employee’s seniority
will date back ninety (90) days.  When an
employee acquires seniority, his name shall be placed on the plant seniority
list.  New employees who have worked less
than ninety (90) calendar days shall be classified as probationary
employees.  There shall be no
responsibility for re-employment of such employees if they are laid off or
discharged during this period.

 

2.    Benefits for newly hired employees will
begin following sixty (60) days.

 

ARTICLE 11

SENIORITY

 

It is mutually agreed the
departments and department seniority of employees as theretofore agreed upon
will remain in effect unless regrouping of departments is otherwise agreed upon
between the Company and the Union. 
Whether new departments shall be included in an existing department or
shall constitute a new department will be determined by agreement between the
Company and the Union.

 

The following are the
departments heretofore agreed upon:

ASSEMBLY

AUTOMATICS

MATERIALS

TOOLROOM

GRIND

LABORER/JANITOR

QUALITY

MAINTENANCE

 

All employees hired
before October 25, 2003 and those not hired as multi-machine operators
will have job titles under the existing job classification system and be Tier
1.

 

All employees who are
hired on or after October 25, 2003 will be hired in the classification of
multi-machine operators with various skills and grade based upon their level of
training and qualifications and be Tier 2.

 

On January 10, 2005
the company will institute a program which will permit employees currently
employed with Job Titles under the existing job classification system (Tier 1)
to be converted to the multi-machine operator classification.  Employees who wish to participate in the
multi machine operator program, will be required to declare their intent on or
before six months after the execution of this agreement.

 

1.    Computing Seniority

 

A)   The
seniority of an employee shall be computed on the basis of the length of his
service, from the date of his last employment with the Company, subject to the
provisions of this Agreement.  When more
than one employee is hired on the same date, to establish their seniority
position, their names will be placed on the seniority lists in alphabetical
order by last name (at the time of hire), first name, and middle name.

 

B)   An employee who accepts a position not
within the Bargaining Unit will have ninety (90) days to return to the
Bargaining Unit.  If the employee exceeds
this 90-day period, he will lose all rights and will return to the Bargaining
Unit only as a new employee.

 

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

 

5

 

2.    Termination of Employment

 

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

 

A)   Voluntarily quits his employment, or

 

B)   Is discharged for proper cause, or

 

C)   Is absent for three (3) consecutive
working days without properly notifying the Company, or

 

D)   Fails to return to work from layoff within
five (5) working days after being notified by telephone unless prevented
to do so because of sickness, injuries, or causes beyond his control and the
Company is notified prior to the end of the fifth working day.  In such event, he shall be given a reasonable
time in which to report for duty.  The
date of return shall not be later than one (1) year thereafter.  Such a condition shall not prevent employees
next in service from being employed during the interim.  In instances where notification is by “overnight”
mail or certified mail only, the five (5) days commence with the receipt
of the letter by the employee.  In any
event, if there is no response within two (2) weeks, the employee whom the
Company in unable to reach will be terminated.

 

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

 

F)   Passes the time limit for recall from
layoffs.

 

3.    For
purposes of layoff and rehire, the officers of the Union shall have seniority
in the following order:  President,
Grievance Chairman, Vice President and Grievance Committee providing they have
the ability to perform whatever jobs are available.  No layoff notice is required if one of the
aforementioned leaves his office.  The
Union agrees to keep its list of officers and stewards up to date and will hold
the Company blameless if the list is not kept current.

 

ARTICLE 12

LAYOFFS AND RECALL TO WORK

 

1.  Layoff Provisions

 

A)   The Company will give at least two and
one-half (2-1/2) working days’ notice prior to layoff to the employees
affected, even if only one employee is affected, or will pay him at straight
time rate for two and one-half (2-1/2) working days in lieu of such notice.

 

B)   Laid off employees will be covered with
medical insurance for the month in which the lay-off occurs and one month
following the lay-off.

 

C)   When a job is eliminated within a Job
Classification, the least senior employee in that job classification will be
displaced.

 

D)   An
employee displaced from a job classification may bump on the basis of plant
seniority one of the least senior employees in the same or another job
classification providing he currently possesses the skill and skill level of
the junior employee he wishes to displace with demonstrating proficiency within
two weeks. The employee will designate a job choice within 24 hours from the
end of the shift on which he was displaced.  
Employees can only bump into a Skilled Trades job if they previously
held the job.

 

E)   When
a shift or part of a shift is removed due to lack of work or reduction of work,
any employee affected will be given the opportunity to exercise his seniority
on the shift of his choice, with demonstrating proficiency within two weeks.

 

6

 

2.  Recall Provisions

 

A)   If employees are laid off and subsequent
thereto it becomes necessary to increase the workforce in any department,
rehiring will begin with the most qualified senior employee, regardless of job
classification.  He will be paid
according to the skill level in the job classification to which he has been
recalled.

 

B)   If an employee on the recall list is offered
regular, full-time re-employment in the same department and shift as previously
held, and he refuses to accept it, he will be dropped from the recall list and
no longer have any rights under this Agreement.

 

C)   The Multi Machine Operator (MMO) will be
recalled based upon senior qualified.  If
he refuses recall he will be removed from the recall list.

 

D)   If an
employee on the recall list is offered regular, full-time re-employment in a
different job classification or shift, and he refuses to accept it, he will
remain on the recall list until such time as he is offered another opportunity
to return to work.  A third refusal to
return to work will cause such employee to be removed from the recall list and
no longer have any rights under this Agreement. 
In order to count as a “refusal” for purposes of the preceding sentence,
the offer which the laid-off employee refuses must have been received at least
one month subsequent to the prior offer he refused.

 

E)   The Company shall notify eligible employees
by telephone, where possible, to report for work and confirm it by “overnight”
or certified mail to the last known address, and shall give a copy of such
notice to the Union at the same time.  If
such employee does not report within five (5) working days after being
notified by telephone, he shall lose his seniority unless he is prevented from
returning due to sickness, injuries, or causes beyond his control, and the
Company is notified prior to the end of the fifth working day.  In such event, he shall be given a reasonable
time in which to report for duty.  Such a
condition shall not prevent employees next in service from being employed
during the interim.  In instances where
notification is by “overnight” or certified mail only, the five (5) days
commence with the receipt of the letter by the employee.  In any event, if there is no response within
two (2) weeks, the employee whom the Company is unable to reach will be
terminated.

 

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

 

	
  SENIORITY TIME LIMIT

  
	
  Probationers

  	
   

  	
  No Recall

  
	
  Non-probationers

  	
   

  	
  3 years (36 months)

  

 

3.  The Company agrees to notify the Union
immediately, in writing, of all temporary and permanent layoffs, resignations,
discharges and transfers.

 

4.   It shall be the duty of the employees to
advise Human Resources, in writing, of their proper home addresses, and any
notice sent by the Company by “overnight” mail or certified mail to the last
known address of record with the Company shall be considered proper
notice.  The Company agrees to inform the
Union of new or corrected addresses.

 

ARTICLE 13

OPEN JOBS

 

1.  Filling Open Jobs

 

The
Company agrees when an opening exists within the bargaining unit present
employees will be considered for these positions before new employees are added
to the workforce.

 

The
following procedure will apply for filling open jobs:

A.  Canvass the job classification in the
department, for shift change reasons.

B.  Post open job

 

7

 

1)  The Company will post notice of such opening
for seventy-two (72) hours.  The posting
will include date and time the posting will close.  Employees who wish to apply for the opening
must do so by submitting a completed Job Vacancy Application to their
supervisor during the posting period.

 

2)  Any employee on layoff who is qualified and
senior to the successful bidder will be contacted and offered the opening.

 

3)  Recall from layoff

a. Senior employee is recalled with the 60 day
disqualification requirement applying (9 &10 below).

 

4)  New hire

 

2.   Procedure to be followed in
making awards:

a.   Seniority

b.   Skill & Ability

c.   Plant-wide recall

d.   Outside hire

 

3.  
If a job is posted when an employee is on vacation, workers’
compensation, or an approved leave of absence for reasons named in Art. 14,
sec. 1, that employee will be given 3 days in which to bid on the opening,
provided he has returned within 90 calendar days from the date of the job
posting.  In the event that awarding the
posted job is delayed as a result thereof , the company will have the right to
fill the position during the interim with the next most senior applicant who is
qualified under 2 above.

 

4.  
All awards to open jobs will be posted within 5 working days.  A successful bidder will be transferred to
the open job within 30 calendar days after he is designated, unless the Plant
Council determines his transfer within that time period would be detrimental to
his current department.

 

5.  
When an open job exists in one of the Skilled Trades classifications,
the Company may determine whether to train or hire on the outside.  If the Company decides that the posting and
bidding procedure outlined in Subsection A above shall be utilized, the
job will be awarded on the basis of seniority and aptitude.  However, employees who have previously held
the job in the Skilled Trades classification in which the open job exists, will
be given priority.  Those employees
bidding for the job who have not previously held the open Skilled Trades job
will be required to take a standard skills assessment test to verify
qualification and aptitude for successful performance, and must hold any
applicable certifications

 

6.   Any proposed mechanical aptitude test or
other test deemed necessary by the company, and individual results, will be
reviewed by the union president. 
Employees who are applicants for the open position will be entitled to
repeat test after 6 month period has expired from previous test.  Senior employees who pass the test will not supplant
junior employees who have passed previous test and are in training.

 

7.   Existing employees, prior to October 25th,
accepting a higher labor grade job, will retain their existing pay with their
new classification.  Increases will be
awarded through the evaluation process. 
Employees accepting lower labor grade jobs, will obtain the rate of pay
with their new classification.  If an
employee’s anniversary occurs while the employee is participating in training
for a new position, the employee will receive an evaluation at the completion
of training and be eligible for advancement at that time to the next
level.   Step evaluations will take place
at the normal six month cycle.

 

7a.   MMO’s will retain existing rate of pay with
their new classification.

 

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

 

9.   If an employee disqualifies himself within a
period of sixty (60) days, he shall return to his original job classification
he held at the time of the job award. 
Such employee shall then be restricted from bidding out of his
classification for a period of six (6) months, except to fill a position
that would otherwise be sent out for hire.

 

8

 

10. If the employee is
disqualified within a period of sixty (60) days, he shall return to the
original job classification he held at the time of the job award.  Such employee shall then be restricted from
bidding out of his classification for a period of six (6) months, except
to fill a position that would otherwise be sent out for hire.

 

11. In the event work is
transferred from one department to another on a permanent basis, the affected
employees will be given the opportunity of moving with full seniority to the
new department.

 

ARTICLE 14

LEAVE OF ABSENCE

 

1.  Types and Conditions of Leave

 

A.
Personal Leave

 

A personal leave of
absence shall be understood to mean an absence from work without pay, requested
by an employee and consented to by the Company, covering an agreed period of
time and for reasonable cause.  The Union
shall be notified of any such leave prior to commencement thereof and of any
extension thereto.  Personal leaves of
absence will not be granted for the purpose of allowing an employee to take
another position temporarily, try out new work, or venture into business for
himself.

 

B.  Union Leave

 

Upon written request by
the District Director, United Steelworkers of America or his designated
representative, a leave of absence not to exceed two (2) years will be
granted to members of the Union selected to work full time for the Union in an
official capacity.  Such leave of absence
will be without loss of seniority, but no other benefits shall apply during the
term of such leave.

 

Employees selected and
appointed as delegates to any Union meeting, conference or convention
necessitating a temporary leave of absence shall be granted such leave of
absence without pay and without loss of seniority.

 

Employees elected to
public office or appointed to non-civil service positions shall be granted a
leave of absence not to exceed four (4) years.  Neither seniority nor benefits accumulate
during the term of such leave.

 

Upon proper notification,
any two (2) employees assigned by the Union to engage in activity relevant
to political elections, will be excused from work on the day in question.

 

C.  Sick Leave

 

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

 

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

 

Employees on sick leave
will be removed from the active payroll. 
However, if an employee is not on the active payroll on 12/31 but
returns to work on or before 3/31 of the succeeding year and works at least
thirty (30) days in that year, that employee will be eligible for full vacation
benefits.

 

Employees on sick leave
for one (1) year or more will be taken off the payroll.  Those employees will not lose any

 

9

 

rights to life insurance
or medical insurance, or any other accrued rights, and will be reinstated at
full accumulated seniority if and when they are able to return to work.  However, for employees with less than ten (10) years
of service, all benefits will cease after one (1) year.

 

During the period in
which A&H benefits are paid, hospital coverage and life insurance will
continue.

 

D.  Family and Medical Leave

 

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

 

E.             Maternity Leave

 

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

 

F.  Funeral Leave

 

An employee will be
granted three (3) days off with eight (8) hours straight time pay in
the event of a death in the immediate family for the purpose of arranging and
attending the funeral; the immediate family being mother, father, spouse,
children, brothers, sisters, half-brothers, half-sisters, sister-in-law,
brother-in-law, mother-in-law, father-in-law, son-in-law, daughter-in-law,
step-parents, step-children, grandparents and grandchildren.  One (1) of these three (3) days may
follow the funeral.

 

An employee will be given
one (1) day off with eight (8) hours straight time pay to attend the
funeral of a step-parent of a spouse.

 

If a death occurs in the
immediate family of an employee while he is on vacation, that employee will be
entitled to three (3) consecutive days off immediately upon conclusion of
the vacation period.

 

G.  Jury Duty

 

In case of jury duty, the
Company will make up the difference in pay between jury duty pay and straight
time pay by the Company for forty (40) hours per week.  Such compensation shall be payable only if
the employee gives the Company prior notice of such jury duty call and presents
proper evidence as to the jury duty performed.

 

The Company will pay up
to eight (8) hours for employees who lose time from work due to necessity
of going to the Courthouse either to qualify for or to be excused from jury
duty.

 

If an employee is on jury
duty and death occurs in the immediate family, the employee will be covered
under terms outlined in Section 1(F) above.

 

If an employee is on jury
duty and is released for any reason, he shall have the option of reporting to
work or having an excused absence.  This
option may be exercised only one (1) day in any one (1) week period
and only after notification to the Company.

 

If an employee is on jury
duty and “daily” overtime is scheduled in that period, the employee will not be
entitled to work such overtime.  However,
that employee will be entitled to work overtime if it is scheduled on a
weekend.

 

H.  Military Leave

 

Any employee who is
required to attend Military Reserve Training encampment shall be excused from
work for up to two (2) weeks and shall be paid up to two (2) weeks
the difference between his military pay and what he would have earned while
working for the Company, up to a maximum of eighty (80) hours.  The employee must present proof of

 

10

 

his gross military pay
before any payment is made.

 

All veterans, who
previous to induction were employed by the Company and who have returned within
ninety (90) days after their discharge from War Service shall be compensated
for any lost time for medical checkup for injuries received in the line of duty
or situations arising therefrom, so long as the maximum compensation shall not
exceed eight (8) hours in any thirty (30) day period.  Regulation governmental procedure shall be
obtained in certification of a veteran’s incapacity; proper governmental
identification in the form of documentary evidence shall be submitted to the
Plant Manager in such cases.  In the
circumstances of Malaria, such veteran would be treated in accordance with governmental
regulations by a physician duly appointed by the government.  The Company will comply with all existing
Federal and State statutes pertaining to veteran’s rights and benefits.

 

2.  Leave Provisions

 

A)  All requests for permission to take personal
leave of one week (5 days) or more shall be submitted to the Human Resources
Manager.  Requests for less than one week
(up to a maximum of ten (10) days per year in the aggregate) may be
submitted to the Supervisor.  Approval of
such requests is at the discretion of the Human Resources Manager or the
Supervisor, as the case may be.

 

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

 

ARTICLE 15

OVERTIME

 

1.               The contracting
parties hereby agree that the normal work day shall be eight (8) hours and
that the normal work week shall be five (5) consecutive days, commencing
Monday and ending Friday.  It is agreed
that the present working schedule shall remain in effect, and that any
change in established schedules shall be decided in the Plant Council.  This shall not be construed as a guarantee of
hours of work per day or per week.

 

2.               Starting times and
shifts will remain in effect for the length of this contract.  Any change must be decided in the Plant
Council.

 

3.               Curtailment on a
partial department or plantwide basis will be as follows:

 

A)          The Company
representatives on the Plant Council will notify the Union representatives on
the Plant Council three (3) days prior to curtailment except for
circumstances beyond the control of the Company.

 

B)            On a partial
department basis, work will be performed by immediately qualified employees in
line of seniority.

 

C)            If curtailment exceeds
five (5) consecutive days duration, the Company will then revert to the
layoff provisions of this contract.

 

D)           If curtailment occurs
for one (1) or more days in a department, the Company will attempt to
place the affected employees in other departments without interfering with
employees in those departments.  An
employee may also opt to take time off without pay or to use vacation time.

 

4.               All work in excess
of eight (8) hours per day on any regular working shift or all work in the
work week in excess of forty (40) hours shall be paid for by the Company at a
rate of one and one-half (1 1⁄2) times the regular rate.

 

5.               All work performed
on Saturday shall be paid for at one and one-half (1 1⁄2) times the employee’s
regular hourly rate, and all work performed on Sunday shall be paid for at two (2) times
the regular hourly rate.  However,                management will not be
obligated to give Saturday and Sunday work to any employee who has lost a
scheduled day or more Monday through Saturday of that week.  This shall apply even though the employee may
have worked less than forty (40) hours during the regular work week.  Before an employee is denied an overtime opportunity
because of absence, the supervisor will contact the Human Resources Manager to
prevent any

 

11

 

unjust application of
this rule.

 

6.               A holiday shall be
counted as a day worked for purposes of overtime computation.

 

7.               When in the
judgement of management, overtime is required for a given department, the
regular employees assigned to the department shall be given preference over
other employees to accept such overtime, provided that they have the ability to
do the work available.  All reasonable
means will be employed to equalize overtime among shifts in a department.  Any questions as to the qualifications or
capability of any employee or employees will be explained by the
supervisor.  This paragraph does not
apply to the skilled trades.

 

8.               It shall be clearly
understood that the responsibility for keeping the rotating list up to date
shall rest with the Union and further, that the Union will hold the Company
blameless for any grievance arising from the selection of workers from the
list, providing the selection of those persons whose turn it is to work is
according to the Union’s list.  In the
event of a mistake under this section, the employee affected thereby shall be
given an overtime makeup turn the next time overtime is scheduled in this
particular work group.

 

9.               The Company agrees
(overtime work not being compulsory) to schedule weekend overtime by 11:00
AM on Thursday, except where an emergency makes such scheduling
impossible.  Whenever possible, the list
of employees to work weekend overtime shall be given to the Company by the
Union no later than 8:30 AM on the Friday immediately preceding the scheduled
overtime.

 

10.         Where a department or any
employee in the department has been on an overtime basis, an employee will receive
eight (8) hours notice, wherever practical, before returning to his regular
shift.

 

11.         Proper notification of
overtime will normally be four (4) hours after the start of the shift
unless the Plant Council agrees otherwise.

 

12.         When overtime is to be
worked within a department, employees who possess the required skills will be canvassed
on a seniority basis.

 

13.         If an employee is
scheduled for overtime on Saturday or Sunday and reports for duty, he shall
receive pay for no less than four (4) hours work.  If the employee is transferred to other work
on overtime, he shall be guaranteed eight (8) hours work at the
appropriate rate of pay.

 

14.         Employees who are called
back to work after the end of their regularly scheduled shift will be
guaranteed a minimum of four (4) hours pay at the appropriate overtime
rate.  However, when any callback results
in consecutive hours worked just before the employee’s regularly assigned shift
those hours will be paid at the appropriate rate and hours after the start of
the scheduled shift will be paid on a straight time basis.

 

15.         When an employee is
transferred from one department to another department, he shall be afforded the
opportunity to work any scheduled overtime in the department to which he was
transferred.  In the event that no overtime
is scheduled in that department, he is eligible to accept overtime in the
department from which he was transferred.

 

16.         The parties also
recognize the need in many cases for special exception overtime agreements,
which are to be entered into promptly in writing between the members of the
Plant Council.  The present exception
agreements shall remain in effect unless otherwise changed within the Plant
Council.

 

17.         Overtime may be worked in
a department where layoffs exist.  If the
overtime exceeds 50% of total hours worked in two (2) consecutive weeks in
such department the Company will immediately recall at least one (1)            employee per week for the duration
of the overtime.

 

ARTICLE 16

WAGES AND OTHER COMPENSATION

 

TIER 1

 

1.               Effective
January 8, 2005, a general increase of 2% will be applied to all
individual rate of pay of each member of the bargaining unit.  Employees who are not on the active roll at
the time of the general increase will receive

 

12

 

the
increase adjustment at the time they return to the active roll.

 

2.               Effective
January 8, 2006, a general increase of 2% will be applied to the
individual rate of pay of each member of the bargaining unit.  Employees who are not on the active roll at
the time of the general increase will receive the increase at the time they
return to the active roll.

 

3.               Effective
January 8, 2007, a general increase of 2.5% will be applied to the
individual rate of pay of each member of the bargaining unit.  Employees who are not on the active roll at
the time of the general increase will receive the increase adjustment at the
time they return to the active roll.

 

TIER 2

 

1.               Effective January 9,
2006, a general increase of 2% will be applied to the individual rate of pay of
each member in the bargaining unit. 
Employees who are not on the active roll at the time of the general
increase will receive the increase adjustment at the time they return to the
active roll.

 

2.               Effective January 9,
2007 a general increase of 2.5% will be applied to the individual rate of pay of
each member in the bargaining unit. 
Employees who are not on the active roll at the time of the general
increase will receive the increase adjustment at the time they return to the
active payroll.

 

ARTICLE 17

NEW PRODUCTS

 

1.         The Company has the
discretion to manufacture different products, new to the plant, and may create
a new department or otherwise staff the production of such product by means of
recalling or rehiring experienced employees or by means of new hires.  If the Company believes that the skills
and/or knowledge needed to produce such product on an efficient and profitable
basis are substantially different than the skills and knowledge in the existing
departments:

 

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

 

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

 

C)            When a wage range is
installed, the Union may process the issue in accordance with Article 24
below, including submission to arbitration of a grievance alleging that such
does not bear a fair relationship to the wage structure in the plant.  The decision of the arbitrator, if any, shall
be effective as of the date when the employee(s) commenced manufacturing such
different product.

 

ARTICLE 18

SHIFT PREMIUM

 

1.         A
shift premium of 5% of the regular hourly rate will be paid to all employees
whenever they are assigned to and working on the afternoon and night shifts for
the life of the contract.

 

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

 

3.         Shifts shall be
identified as follows:

 

A)          Day Shift - (“A” Shift)

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

 

B)            Afternoon Shift - (“B”
Shift)

When the majority of
hours on an employee’s regularly assigned shift shall fall between 3:00 p.m.
and

 

13

 

11:00 p.m.,
inclusive, he shall be considered as working on the Afternoon Shift.

 

C)            Night Shift - (“C”
Shift)

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

 

ARTICLE 19

TEMPORARY TRANSFERS

 

1.               An employee may be
transferred into another department temporarily if there is a greater need in
that Job Classification or if there is a lack of work in the other
department.  The transferred employee
shall receive the rate of pay of the skill level which he has attained and will
be given a transfer slip.

 

2.               If senior employees
are involved, they may displace junior employees in the department, providing
they possess the skill level required to perform the job, and the junior
employee will be transferred.

 

3.               Transfers may be
made for daily absenteeism within a department and may continue for up to five (5) working
days.  If the absence of any employee
should exceed five (5) working days, the matter will be referred to the
Plant Council for action.

 

4.               When layoffs are
necessary, transfers may be made from one department to another providing no
layoffs exist in the department to which transfers are being made.  However, such transfers are permitted to
cover temporary vacancies (a) due to vacation or disability, (b) to
respond to emergencies, or (c) where employees on layoff do not possess
the skills necessary to perform the work in question, (d) work of short
duration.  In the case of (a), (b) or
(d), the transfer shall not exceed one (1) week unless the Plant Council gives
its consent.

 

5.               Multi-machine
operators may work within all job classifications where previously qualified
and not be considered a temporary transfer. 
During periods of layoff, par. 4 of article 19 will apply.

 

ARTICLE 20

VACATIONS

 

1.               The
vacation year shall begin on January 1 and end December 31.  Each employee who is on the payroll on December 31
of any year shall be entitled to receive his full vacation benefits in the
ensuing year, notwithstanding the fact that his services may have been terminated
in the ensuing year prior to the receipt of vacation pay.

 

2.               Employees
not on the active payroll as of December 31, but who become active after December 31,
due to recall or return from a Company approved leave of absence, will be
entitled to vacation benefits for each month of service in the current vacation
year.

 

A)          In
cases of employees with less than one year’s service, vacation benefits will be
prorated as mentioned above, except that employees with less than six (6) months’
service will not be entitled to vacation benefits.

 

B)            If any employee elects
not to return to his department in which he formerly worked when called by the
Company after a layoff, the employee loses the right to the vacation privilege,
unless he was on the active payroll the previous December 31, in which
case he will be paid his full vacation benefit.

 

All employees returning
from layoff to a permanent job who have been paid vacation benefits in the
current year, will be entitled to take equivalent time off without pay, except
such employees must work at least one month immediately upon return from
layoff.

 

C)            When an employee is
laid off, he will receive all vacation benefits due at the time of such layoff.

 

14

 

3.               Vacation benefits
for employees hired on or before October 22, 1999 shall be as follows:

 

	
  Accredited Service Prior to

  
	
  12/31 of Vacation Year

  	
   

  	
  Vacation

  
	
  1 year less than 3
  years

  	
   

  	
  1 week 1 day

  
	
  3 years less than 5
  years

  	
   

  	
  1 week 4 days

  
	
  5 years less than 7
  years

  	
   

  	
  2 weeks 1 day

  
	
  7 years less than 9
  years

  	
   

  	
  2 weeks 2 days

  
	
  9 years less than 11
  years

  	
   

  	
  2 weeks 4 days

  
	
  11 years less than 13
  years

  	
   

  	
  3 weeks

  
	
  13 years less than 15
  years

  	
   

  	
  3 weeks 1 day

  
	
  15 years less than 20
  years

  	
   

  	
  4 weeks

  
	
  20 years less than 25
  years

  	
   

  	
  5 weeks 1 day

  
	
  25 years and over

  	
   

  	
  5 weeks 3 days

  

 

A)          Employees hired on or
after October 23, 1999 will receive a maximum of four (4) weeks
vacation based on the accredited service schedule above.

 

4.               Vacation
pay for each eligible employee will be computed on the basis of a forty (40)
hour week at straight time for the highest rate paid for the majority of the
time worked between January 1 and June 1.  The vacation pay for an employee taking his
vacation prior to June 1 will be based on his highest rate for the majority
of time worked from January 1, until he applies for his vacation.  Vacations taken after June 1 will be
paid at the employee’s current rate.

 

A)   The Company agrees to pay the employee his
vacation pay at the time the employee takes his vacation between January 1
and December 31.  It is provided,
however, that the employee will receive his vacation pay on a regular pay date
and that one week’s notice be given in advance of such pay date.

 

B)   The Company agrees to pay employees only
when the vacation is taken.  Any employee
who is scheduled for an approved vacation and works during that scheduled
vacation may elect to receive their vacation pay in addition to actual time
worked or additional time off.  Any such
employee who is scheduled for vacation may not change such vacation except by
mutual agreement between the Company and the Union.

 

C)    An employee will receive vacation pay for
each individual day he charges to vacation.

 

D)    An employee who desires vacation by
seniority must request such vacation by March 1.  If an employee does not follow the above
procedure, the Company will assign his vacation.

 

E)    Individual holidays cannot be charged as
vacation days.  The only exception will
be where the holiday, or holidays, fall within the employee’s scheduled
vacation week.  In these instances, the
employee will receive his holiday pay.

 

F)    Employees who honor their military reserve
commitments in conjunction with their vacation time are not entitled to reserve
make up pay.

 

G)    Between the dates of January 1 and June 1,
and September 15 and December 31, an employee may split his vacation
week into days.

 

5.               Any employee who
shall have worked a full month or any fraction thereof shall be given credit
for the full month in computing earned vacation time on a prorated basis.  An employee who returns from layoff or is
hired on or before the 15th of the month shall be given full credit
for that month.

 

6.               Vacations
will be scheduled by the employee and approved by the supervisor in accordance
with production requirements.

 

15

 

A)          Employees with the
greatest seniority within a Job Classification will be given preference in
scheduling vacation.

 

B)            The right of the
Company to shut down for two (2) consecutive weeks of mandatory vacation
anytime from July 15 to August 15 is recognized by the Union.  In addition, the Company has the right to schedule a
vacation shutdown during the final week of the year (i.e. between Christmas Eve
and New Year).  The Company will notify
the Union of the three (3) weeks shutdown by February 1 of the
vacation year.

 

C)            If there is work to be
performed in a department during the vacation shutdown, employees in the
department without eligibility for the scheduled shutdown weeks of vacation
will be canvassed for the work on a seniority basis.  If more employees are necessary, the jobs
will be filled by employees on a seniority basis in the department where the
work is needed.  Should the employee
requirements remain unfilled, additional employees will be canvassed from the
master seniority list on a plantwide basis. 
Employees who work during the vacation shutdown period may request
alternative vacation time off, by seniority, with supervisor’s approval, in
accordance with production requirements, provided each such request is
submitted during the vacation shutdown period. 
Thereafter, requests for alternative vacation time off shall be acted
upon in the order received.

 

7.               The
vacation schedule shall be posted on or before January 15.  This schedule will give the amount of
hours the employee has for the vacation year.

 

A)          The vacation schedule as
to the employee’s choice of vacation shall be posted in each department by April 1.

 

B)            Each department shall
be responsible for posting its own vacation schedule by April 1.

 

8.               Any
employee who is on vacation for a full week shall not be eligible for overtime
assignment during any weekday or weekend falling within such vacation period.

 

9.               In
the event of death of any employee who was eligible for a vacation but did not
use his vacation, the amount of vacation pay to which he would have been
entitled shall be paid to his surviving spouse or legal representative in
accordance with the laws of his state of domicile at the time of death.

 

10.         An
employee shall be permitted one instance per year of post dating a vacation day
if 24 hours notice is given, except in the case of an emergency, in which case
the 24 hour notice will be waived. 
Thereafter, for the remainder of the year, an employee shall only be
permitted to post date vacation days when approved by the Supervisor.  No post dating will be permitted in the
period between June 1 and September 15.

 

11.         Any
employee who is absent from the Company due to sickness or personal leave of
absence may opt to take vacation money in lieu of time off.

 

ARTICLE 21

HOLIDAYS

 

1.               The
following holidays shall be recognized as paid holidays for all hourly
employees (such holiday time to be from 12:01 AM to 12:00 midnight of said
holiday):

 

	
  Good Friday

  	
   

  	
  Labor Day

  
	
  Easter Monday

  	
   

  	
  Thanksgiving Day

  
	
  Memorial Day

  	
   

  	
  Day after Thanksgiving

  
	
  Independence Day

  	
   

  	
  Three Holidays to be
  designated at Year’s End

  

 

2.               Hourly
rate employees covered by this Agreement shall receive eight (8) hours pay
at their regular rate, including night shift bonus, for each of the above
holidays, no work being required.

 

3.               When
any of the above holidays shall fall on Saturday, the preceding Friday shall be
observed in lieu thereof as a paid holiday. 
When any of the above holidays shall fall on Sunday, the Monday
following shall be observed in lieu thereof as a paid holiday.  When the Christmas holidays fall on Friday
and Saturday, Thursday and Friday

 

16

 

will
be observed as the holidays.  Should the
Christmas holidays fall on Sunday and Monday, Monday and Tuesday will be
observed as holidays.

 

A)          An employee who works on
any one of the above mentioned holidays shall be paid at double time the
regular established rate for hours worked plus his holiday pay.

 

B)            A holiday which occurs
during an employee’s vacation shall not affect the period of vacation and the
employee in such cases will return to work at the beginning of the regular work
week rather than a day later.  When a
paid holiday occurs while the employee is on vacation, he will receive the
holiday pay in addition to vacation pay. 
If a holiday occurs during an employee’s vacation week, the employee may
have the privilege of taking the day at a later time – the day to be agreed
upon by the Company and the individual involved.

 

C)            A holiday shall be
counted as a day worked for purposes of overtime computations.

 

4.               To
be eligible for holiday pay, an employee must work that first scheduled workday
after the holiday unless he has been excused by the Supervisor or is absent for
reasonable cause.  Any employee who is
absent forty-five (45) days or more prior to any of the above holidays shall
not be entitled to pay for such holiday.

 

5.               Any
new employee or former employee of the Company who quits his job, or was
discharged must, if rehired, be on the payroll for sixty (60) days before
becoming eligible to receive holiday benefits.

 

ARTICLE 22

SAFETY AND HEALTH

 

1.               The
Company recognizes the importance of taking every reasonable precaution to
promote and protect the health and lives of its employees and hereby agrees:

 

A)          To abide by and maintain
to the best of its ability sanitation, safety, health and satisfactory working
conditions which comply with applicable Federal, State and County and Municipal
laws and regulations; to maintain a clean, properly lighted, heated and
ventilated factory with approved safety devices; first aid and sanitation
facilities as are necessary to promote the health, safety and general welfare
of its employees.

 

B)            That no employee shall
be required to perform any work which will seriously endanger his personal
safety or health, provided, however, that to be justified in refusing to
perform work, an employee must be able to show that he has a reasonable basis
for believing the work involved would seriously endanger his personal safety or
health.

 

2.               If
an employee is injured while working on the job, his pay shall continue during
the normal scheduled work hours while he remains on the plant premises.  If an employee is sent from his job to a
physician to receive medical attention because of an injury on the job, he
shall be paid for all lost time, not to exceed eight (8) hours. If it
becomes necessary, the Company shall provide quick, comfortable transportation
to the doctor or hospital or home.

 

A)          When
injured on the job, employees must use the medical facilities made available by
the Company for all services in connection with the injury for a minimum of the
first ninety (90) days of treatment.  The
initial appointment must be scheduled by Human Resources, except in the event
of an emergency.  Any employee who
bypasses the Company facilities will act on his own responsibility insofar as
the expense involved.

 

B)            The
Company may elect to provide work for ill or injured employees that meets the
physical restrictions outlined by the Attending Physician.  If the decision of the Attending Physician is
disputed, the employee shall submit to an examination by a physician selected
by agreement of the parties.  That
physician’s decision will settle the issue.

 

C)            Light
duty work as provided for compensable injury employees is not limited to any
specific area.  This provision will not
deprive any active employee of a work opportunity, upgrade or promotion nor
cause the layoff of any active employee or block the recall of any employee on
layoff.  Where the Union can

 

17

 

show
evidence that a light duty employee is used in violation of the above, such
employee will be removed.  The Plant
Council will be notified when a light duty person is assigned.

 

3.               There
shall be a health and safety committee in the plant composed of up to three (3) members
to be appointed by Management and one (1) member to be appointed by the
Union.  It shall be the duty of the
committee to make a thorough and complete survey of the plant monthly for the
purpose of listening to any investigation of complaints relating to health,
safety and working conditions, ascertaining whether conditions exist which are
dangerous to the health and safety of the employees.  In case of any serious accident, all members
of the Plant Safety Committee and the Workers’ Comp Chairman will be
immediately notified.  The committee will
conduct a thorough investigation of the accident.  There will be a monthly safety meeting to
review all safety related issues.

 

No discriminatory or
punitive action shall be taken by the Company or its representatives against a
Work Group Representative who performs his duties herein imposed in good
faith.  In case of any serious accident,
all members of the Plant Safety Committee will be immediately notified and
thorough examination shall be made by the full plant committee.  From time to time a representative of the
Workers’ Compensation Insurance Carrier shall attend the safety meeting.

 

4.               The
members of the Health and Safety Committee shall receive their regular hourly
wages for time away from their regular scheduled duties while on inspection
tours or meetings.

 

5.               An
employee who is permanently unable to perform his regularly assigned job as a
result of a Company incurred disability may apply for permanent transfer
subject to the following conditions:  The
search by the Company for an appropriate job must begin by reviewing jobs held
by employees with less than three (3) years seniority and continuing the
search at yearly intervals.  In no event
may the applicant displace an employee with more Company seniority.  An employee transferred under this section relinquishes
recall rights to his former Job Classification and he carries his full Company
seniority into the Job Classification where he is placed.  The search will be conducted by the
Supervisor, and failing successful placement, the search will be continued on a
plantwide basis.  The Workers’
Compensation Chairperson shall participate with the employee and the Company in
all compensable job searches and receive a copy of such results.

 

6.               If an employee is
disabled as the result of a non-compensable accident, or suffers a health
problem that makes it impossible for him to perform his normal duties, the
Company will attempt to place him in another job within his capabilities
seniority permitting.

 

7.               An
employee who has, as a result of a Company incurred injury, suffered the loss
of an eye or the equivalent of complete amputation of an essential body member,
may apply for preferred seniority on his regularly assigned job, as long as he
is physically able to perform the duties thereof.  If the injury prevents his efficient performance
on his regularly assigned jobs, he may request a transfer, whereupon the
Company will attempt to place him in a job commensurate with his skill and
physical capability.  An application
approved under this section shall mean that the employee shall not be
subject to displacement as long as he is physically capable of efficiently
performing the duties of that job.

 

ARTICLE 23

UNION FACILITIES

 

No notices of Union
matters are to be posted on Departmental bulletin boards.  The Company shall install bulletin boards
within the plant for posting by the Union of announcements covering Union
matters.

 

ARTICLE 24

DISPUTE RESOLUTION

 

1.               If
any differences arise between the Company and the Union as to the meaning or
application of any provision of this Agreement, or as to its compliance by
either party with any of its obligations under this Agreement, such difference
shall be settled in the following manner:

 

STEP 1:

1.               An oral discussion
of the difference must take place between the employee and his Supervisor with
the

 

18

 

Union
Representative.  The Supervisor must give
his answer within twenty-four (24) hours.

2.               If the difference
remains unsettled, the grievanceman or his substitute may be called to discuss
the matter further, and if no settlement is reached, then within seven (7) days
the employee may present the grievance in writing to his Supervisor through his
Union Representative.  A written answer
must be given by the Supervisor within seventy-two (72) hours.

 

STEP 2:

1.               Any grievance not
settled under Step 1 shall, within ten (10) days from the date of the
Supervisor’s answer, be heard by the Step 2 Grievance Committee.

2.               The Union Step 2
Committee shall consist of the Grievance Chairman, the Area Grievanceman, and
the Shop Steward involved.  Designated
substitutes for any of the above are permitted. 
The Union may call upon the aggrieved and any witnesses the Union deems
advisable.

3.               The Company Step 2
Committee shall consist of the Human Resources Manager and one other member of
management, or their designated substitute.

 

STEP 3:

1.               Any grievance not
settled under Step 2 shall, within ten (10) days from the date of the
Supervisor’s answer, be heard by the Plant Council.

2.               Either party may
call a reasonable number of witnesses.

3.               The Union’s Area
Staff Representative may attend.

4.               In case of
postponement of a third step meeting by either party, such meeting will be
rescheduled by mutual agreement of the parties.

 

STEP 4:

1.               Grievances which
have not been satisfactorily settled in Step 3 may be filed by the Union for
arbitration within ten (10) days following receipt of the Company’s Step 3
answer.

2.               If the Union
submits the matter to arbitration, it shall be referred to the American
Arbitration Association, and an arbitrator appointed according to the procedure
of that association.  The decision of the
arbitrator shall be final and binding on all parties.

3.               The cost of
arbitration shall be divided equally between the Union and the Company.  No arbitrator shall have the right to add to,
subtract from, or in any way modify the provisions of this Agreement.

 

2.         Except for grievances
involving seniority, all grievances must be filed in writing within thirty (30)
days of the event which led to the grievance. 
In cases of grievances involving retroactive pay, retroactivity shall in
no case exceed a period of more than thirty (30) days prior to the date of the
filing of the grievance, except for arithmetical errors in calculating pay.

 

3.         Any Union member who is
discharged or suspended for disciplinary reasons by the Company may enter a
complaint in writing within one (1) calendar week of the date of discharge
or suspension and shall take precedence over other issues pending in the
grievance procedure.  A hearing for the
discharged or suspended employee will be held within twenty-four (24) hours of
the Union’s request for such a hearing, and all parties involved in Step 3
grievances will attend.

 

A)          If disciplinary action
is taken against an employee on the night shift and no Union representative is
present, the Company will notify the proper Union representative on the
following shift.

 

B)            If the arbitrator
determines that an employee has been discharged or suspended without cause the
arbitrator may issue an award which calls for reinstatement and back pay or may
issue an award for lesser remedy.

 

C)            If the Company fails
to hear a step 1 or step 2 grievance within the contractual time limits, the
grievance will move automatically to the next step of the grievance procedure.

 

4.         The Company
agrees to continue the past practice of paying for a reasonable amount of
straight time lost in the grievance procedure.

 

5.         Grievances pertaining to
safety and health will automatically be inserted in step 3 of the grievance
procedure.  Any such grievance will be
heard within one (1) week of submission.

 

6.  Second step grievances will be scheduled as
follows:

 

19

 

1st Shift –
any time during the shift.

2nd Shift –
2:00 PM or later.

3rd Shift –
initial grievance prior to 8:00 AM

 

7.  Union officials will notify their Supervisors
when they leave their jobs to conduct Union business. Further, they will
provide their Supervisors with the approximate time needed.

 

ARTICLE 25

LIVING AGREEMENT

 

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

 

ARTICLE 26

INSURANCE-

 

The Company agrees to
maintain the following Group Health and Welfare insurance plans which provide
eligible employees and dependents with non-occupational medical benefits,
dental benefits, life insurance, accidental death and dismemberment insurance
and disability income in the event of non-occupational accident or sickness, as
well as certain benefits for retirees.

 

1.               Insurance Benefits
– Active Employees

 

A)          Group Life insurance and
Accidental Death and Dismemberment Insurance in the amount of $15,000.  effective February 1, 2005 for eligible
active employees.

 

B)            Medical coverage will
be provided to active employees and their eligible dependents through the
current group medical insurance plans. 
Effective February 1, 2005, all active employees and their eligible
dependents will be covered by the Aetna US Healthcare Patriot Plan or its
equivalent.

 

C)            Dental coverage shall
be provided to employees and their eligible dependents through the current
MetLife Dental Plan or its equivalent.

 

D)           For disabilities
commencing after February 1, 2005, $250 per week beginning with the first
day of accident, or the eighth day in the event of sickness.  Benefits will be payable up to a maximum of
52 weeks for each disability.  Indemnity
papers will be renewed monthly if no definite date of return is given by the
doctor.

 

E)             Effective February 1,
2005, active employees will be entitled to be reimbursed for opting out of the
company provided medical coverage.  The
benefit would be paid monthly-Single is $125.00 per month, family is $250.00
per month.  In order to receive this
benefit you must provide the company with paperwork showing you are on other
coverage.  You will be required to show
proof of other coverage every year.

 

INSURANCE BENEFITS-TIER 1

 

All employees in Tier 1
will make contributions to the medical plan as follows:

Single-yr1-20%, yr2-24%,
yr3-27.5%   Family yr1-14%, yr2-16.5%, yr3-20%  Dental-No Cost

 

INSURANCE BENEFITS-TIER 2

 

All employees in Tier 2
will make contributions to the medical plan as follows:

Single-yr1-30%, yr2-30%,
yr3-30%     Family-yr1-30%, yr2-30%, yr3-30%    Dental 30% each year

 

2.               Insurance Benefits
– Retirees

 

A)          Effective January 8,
2005 any employee who retires before age 65 under the provision of the Pension
Plan are eligible to continue coverage under the HMO plan described above (sec.
1b) for themselves and eligible dependents under age 65 from age 62 and be
vested until age 65.  Contributions will
be the same as active

 

20

 

employees (Tier 1 above)
for the term of the contract.  The
company agrees to negotiate this benefit with each subsequent contract.

 

B)            Any employee who
retires on or after the effective date of this Agreement, at age 65 and over
with ten (10) years or more accredited service, shall be eligible for
Medicare gap insurance of their choice. 
Any such employee will have benefits capped at whatever the cost of
those benefits was on February 1, 2005, or $190.00 per month, whichever is
higher.

 

C)            Spouses of retired
employees are also eligible for coverage under the terms of section 2A
above until they reach age 65 and under the terms of section 2B above
after they reach age 65.

 

D)           Employees who retire on
or after January 8, 2005 shall be provided with Group Life Insurance in
the amount of $2,000.

 

3.               Insurance Plans –
General

 

A)          The benefits listed
above take effect on the dates indicated for active employees and become
applicable at the increased rates to employees on any leave of absence only
upon their return to active employment after the respective change dates listed
above.

 

B)            Should a statute be
enacted making mandatory benefits of the same or similar nature as covered in
any manner of this Plan, such statutory benefits shall not be pyramided, but
shall be offset against any benefits payable under this Plan, and it may be
necessary for us to adjust our Plan in accordance with such statute or
statutes.

 

C)            This Plan is subject
to the insurance industry’s coordination of benefits provision (also referred
to as a non-profit, non-duplication provision) as set forth in the applicable
master contracts.  The purpose of this
provision is to permit an individual who is insured under more than one group
insurance plan to receive from all plans no more than 100% of his allowable
medical expenses.

 

D)           More complete details,
including eligibility requirements, will be published in a separate booklet
which will be issued to each employee.

 

ARTICLE 27

PENSION BENEFITS-TIER ONE

 

1.               A pension plan has
been provided in an agreement which is separate and apart from this Agreement.

 

2.               Employees who
retire shall be paid a lump sum retirement benefit of $1,500 provided that they
have had at least ten (10) years of Company service and reached age sixty-five
(65).  Employees with at least ten (10) years
of Company service who retire between the ages of fifty-five (55) and
sixty-five (65) under the 55/30, early, or disability retirement provisions of
the Pension Plan will receive a reduced lump sum benefit in accordance with the
following:

 

	
  At Least

  	
   

  	
  Attained Age Less Than

  	
   

  	
  Amount

  	
   

  
	
  55

  	
   

  	
  56

  	
   

  	
  $750

  	
   

  
	
  56

  	
   

  	
  57

  	
   

  	
  $800

  	
   

  
	
  57

  	
   

  	
  58

  	
   

  	
  $850

  	
   

  
	
  58

  	
   

  	
  59

  	
   

  	
  $900

  	
   

  
	
  59

  	
   

  	
  60

  	
   

  	
  $975

  	
   

  
	
  60

  	
   

  	
  61

  	
   

  	
  $1050

  	
   

  
	
  61

  	
   

  	
  62

  	
   

  	
  $1125

  	
   

  
	
  62

  	
   

  	
  63

  	
   

  	
  $1200

  	
   

  
	
  63

  	
   

  	
  64

  	
   

  	
  $1300

  	
   

  
	
  64

  	
   

  	
  65

  	
   

  	
  $1400

  	
   

  

 

It is understood that the
lump sum retirement benefits shall be payable in addition to any vacation
payments that may be due an employee at the time of his retirement.

 

21

 

3.               Employees who
retire with thirty (30) or more years of Company service will receive a lump
sum retirement benefit of $2000.

 

4.               Employees who
retire on or after March 1, 1997 shall be provided with Group Life
Insurance in the amount of $2000.

 

5.               Effective December 1,
1979, an employee with thirty (30) years or more of accredited service may
retire, at any age, and receive a pension without actuarial reduction.

 

6.               The present minimum
pension formula shall be improved by increasing the pension per month per year
of service from $30.75 first year, $31.50 second year, $32.25 third year
effective for retirements on or after January 8, 2005.

 

7.               The 35-year maximum
service limitation used to compute the pension benefit will be removed for
those employees retiring on or after December 1, 1977.

 

8.               A monthly benefit
will be paid to any eligible surviving spouse of any active employee with at
least 15 years of accredited service who dies on or after December 1, 1977
at any age, and has not retired.

 

A)          A person shall be
considered a surviving spouse only if married one year, and immediately after
the employee’s death, such person is a widow or widower of such employee within
the provisions of the Social Security Act.

B)            Amount of benefit –
the amount payable to an eligible surviving spouse will be:

a.               50% of the employee’s
normal retirement pension or $100, whichever is higher, for any month before
the month in which the surviving spouse reaches age 60.

b.              50% of the employee’s
normal retirement pension less 50% of the widow’s (or widower’s) Social
Security benefit or $50, whichever is higher, for each month after the
surviving spouse reaches age 60.

c.               As used above,
normal retirement pension means the benefit calculated assuming the employee
had retired on the date of his death at age 65.

C)            The first payment of
any surviving benefit starts at the end of the month following the month in
which the active employee dies, provided proper and timely application is made
by the surviving spouse.  If timely
application is not made, retroactive payment of surviving spouse’s benefit is
limited to six (6) months.

D)           The surviving benefit
shall cease the last day of the calendar month in which the surviving spouse
shall die or the last day of the calendar month in which the surviving spouse
remarries.

 

9.               More complete
details will be published in a separate booklet to be furnished to each
employee.

 

10.         TIER TWO-Employees will
participate in the Company 401(k) plan.

 

ARTICLE 28

WAIVER OF ANY CLAUSE

 

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

 

ARTICLE 29

GOOD FAITH

 

1.               This Agreement has
been entered into in good faith by the parties hereto and each party agrees
that it will carry out this Agreement to the best of its ability so that
harmony and cooperation between the Company and the Union and the employees
covered by this Agreement will prevail for the duration of the Agreement.

 

2.               The Union agrees to
maintain quality standards as established by the Company in the attainment of
full production and efficiency, and to that end, the Union agrees to observe
all rules of the Company not inconsistent with this Agreement.

 

3.               It is the expressed
desire of the Company and the Union that the procedure outlined in this
Agreement for the

 

22

 

settlement of disputes
will serve the purpose of effecting a peaceful settlement of all disputes that
may arise during the lifetime of this Agreement.  To that end the Company agrees that so long
as the Agreement is in effect, it will not lock out any employees in connection
with a labor dispute.

 

4.               The Union agrees
that so long as this Agreement is in effect, it will not call, cause or
sanction any strike, slowdown or stoppage of work during the lifetime of
this contract.  The Union further agrees
that with respect to any strike, slowdown or stoppage of work during the
lifetime of this contract, the Company may discharge or otherwise discipline
any participating employees and such discharges or other forms of discipline
shall not be the subject of a grievance by the Union, except on the grounds
that the employee or employees did not participate in any activity prohibited
by this section.

 

5.               It is further
understood that in the event of any prohibited activities on the part of any
employee which is not called, caused or sanctioned by the International or
Local Union, there shall be no liability on the part of the International or
Local Union, its officers or agents on account of such activity.

 

ARTICLE 30

GENERAL

 

A.           Effective on all pay as
heretofore, the City Payroll Tax will be deducted from the weekly pay of each
employee, and be paid by the Company to the Receiver of Taxes, of the City of
Philadelphia, in accordance with the City Payroll Tax Law at present in
effect.  The amount of this deduction
shall be shown on each employee’s pay envelope each week.

 

B.             If an employee
resigns after having been absent, his resignation will be considered to have
taken place the last day worked, without waiver of intervening rights.

 

C.             The Union agrees that
during the life of this Agreement, it will not interfere with production or
permit any of its members to interfere with production or production rates,
providing such rates are reasonable, just and not detrimental to the safety of
the employee.

 

D.            The Supervisor may
perform such work normally under his jurisdiction and direction as is
necessary, (1) to maintain an uninterrupted flow of work and normal
department efficiency, (2) to train employees, and (3) to relieve
bottlenecks in production.  This Article shall
not limit the Supervisor in performing other similar work which is a part of
his regular duty as Supervisor, so long as doing such work does not affect the
work opportunities of those employees under him.  Members of the bargaining unit will not
perform salary jobs nor will salary people perform bargaining unit jobs, except
where bargaining unit employees are asked and refused.

 

E.              The Union recognizes
that it is necessary for the Company to issue rules from time to time
governing the conduct of employees and that it is the duty of each employee to
familiarize himself with such rules and regulations.  This does not constitute acceptance by the
Union of any specific rules not in compliance with the provisions of this
Agreement.

 

F.              All employees, who
at the time of the signing of this Agreement, are volunteer firemen, fire
policemen and ambulance personnel, shall be paid for the time lost at their
straight time hourly rate while performing duties at a fire, if such duties are
performed during their regular scheduled working hours.  This paragraph applies when those duties are
the cause of an employee reporting late for work or leaving early.

 

G.             It is the policy of
the Company not to discriminate against any employee or applicant for
employment because of race, color, religion, national origin, sex, age,
handicap, veteran’s disability, or Vietnam era Veteran.

 

H.            Any employee who is
asked to use his own vehicle for Company business shall receive an allowance at
the prevailing IRS rate for mileage.

 

I.                 Special written
agreements in existence prior to the date of this Agreement which have not been
changed by the terms thereof shall remain in effect unless subsequently
modified by the mutual consent of the Union and the Company.

 

23

 

J.                The parties agree
that any prior side letters or agreements which exist shall be given to the
other party prior to January 8, 2006. 
Any documents not produced by that date will have no effect.

 

K.            Safety glasses must be
worn while on the shop floor.

 

L.              Employees are
expected to work their entire shift. 
Changing of clothing and/or showering is to be done after clocking out
at the end of the shift.

 

M.         The Union’s Negotiating
Committee shall consist of one representative per every 25 employees, rounded
up to the next highest number, with a minimum of five (5) representatives.

 

N.            If an employee accepts
overtime and fails to report without being excused by the Supervisor, his
absence shall be recorded as an unexcused absence for purposes of tracking
attendance.

 

O.            Those employees laid
off prior to October 23, 1984 will be credited for all layoff time for
vacation and pension eligibility.

 

P.              If an employee is
scheduled to report for duty and no work is available, or he is given less than
four (4) hours’ work he shall receive pay for not less than four (4) hours’
at his regular rate.  Except during
overtime hours, if an employee is transferred to other work, he shall be
guaranteed eight (8) hours of work and be paid in accordance with the
provision governing transfers.  This will
not apply however:

 

1.               When an employee is
absent on the preceding scheduled work day and fails to make necessary
arrangements for his time off with his Supervisor.

 

2.               When an employee is
notified not to come to work at least four (4) hours before the beginning
of his shift by telephone or radio or other available means as listed with the
Human Resources Office.

 

3.               When the plant or
part of the plant is closed due to conditions beyond the control of management.

 

4.               When the above
mentioned occurs, after two weeks, all medical and insurance benefits will
continue for the affected employees unless they are placed on layoff status.

 

ARTICLE 31

PLANT SHUTDOWN

 

1.               In the event of a
temporary or permanent plant shutdown, the Company would continue to provide
all benefits but not wages for a period not to exceed four (4) weeks to
employees actively employed by the Company immediately prior to the shutdown.

 

2.               The Company will
notify the Union sixty (60) days prior to any temporary plant shutdown, unless
an emergency arises which makes such notice impossible.

 

3.               Those employees
with vacation remaining are permitted to change such vacation to correspond
with the plant shutdown dates.

 

4.               During a temporary
plant shutdown, any production work performed will be offered to the most
senior qualified employees within the department.  If additional employees are needed from
outside the department, they will be canvassed from the master seniority list.

 

24

 

ARTICLE 32

DURATION OF AGREEMENT

 

This Agreement shall
remain in full force and effect until midnight, January 26, 2008, and
thereafter shall continue from year to year until either party gives the other
ninety (90) days prior written notice of a desire to change, modify or
terminate same.  If neither party gives
notice to terminate this Agreement, but one or both of the parties gives notice
as aforesaid of an intention to change or modify any of the terms or provisions
of this Agreement, representatives of the Company and the Union shall meet to
discuss, negotiate, and, if possible, agree upon such changes.  In the event such Agreement continues beyond
the expiration date of this Agreement, then the terms and conditions of this
Agreement shall remain in full force and effect until such time as said
negotiations have terminated, either by reason of the inability of the parties
to finally conclude a new Agreement, or because a new Agreement between the
parties has been concluded.

 

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

 

IN WITNESS WHEREOF, the
duly chosen representatives of the parties hereto affix their hands and seals
this 26th day of January, 2005.

 

	
  NICE BALL BEARINGS,
  INC.

  
	
   

  
	
  George Sabochick

  	
  Director of Operations

  
	
   

  	
   

  
	
   Michael Collins

  	
  Facilities Manager

  
	
   

  	
   

  
	
   Cheryl Rodriguez

  	
  Human Resources Manager

  
	
   

  
	
  UNITED STEELWORKERS OF
  AMERICA, AFL-CIO

  
	
   

  
	
  Leo. W. Gerard

  	
  President

  
	
   

  	
   

  
	
  James D. English

  	
  Secretary/Treasurer

  
	
   

  	
   

  
	
  Thomas Conway

  	
  Vice President -
  Administration

  
	
   

  	
   

  
	
  Leon Lynch

  	
  Vice President - Human
  Affairs

  
	
   

  	
   

  
	
  John DeFazio

  	
  District Director

  
	
   

  	
   

  
	
  Norman Hayman

  	
  Staff Representative

  
	
   

  	
   

  
	
  Sharon Miller

  	
  President - Local Union
  6816-12

  
	
   

  	
   

  
	
  John Haney

  	
  Vice President - Local
  Union 6816-12

  
	
   

  	
   

  
	
  James Asher

  	
  Chairman of Grievance
  Committee - Local Union 6816-12

  

 

25

 

Appendix B

Memorandum
of Understanding

 

1.               All memos of
understanding will be printed in the contract booklet.

 

2.               New pension benefits
will be applicable to a ten (10) year employee on leave of absence at the
time the contract is executed and who retires prior to returning from leave.

 

3.               All Policy
agreements now in effect will remain in effect unless changed through
negotiations or by the Union and Company Committees.

 

4.               Any Agreement
reached between the parties of a Plant Council must be reduced to writing at
the time of agreement.  Without such
written confirmation, there will be no agreement.

 

5.               An employee will
receive his vacation pay in weekly checks. 
As an example, should an employee take three (3) consecutive weeks
of vacation he would receive three (3) separate weekly checks.

 

6.               Prior to the plant
going out of business, the Company will notify the Union ninety (90) days in
advance.

 

7.               Janitorial services
will continue to be performed by bargaining unit employees as long as it is
cost effective.  Such duties shall
include cleaning and maintaining lavatory facilities and lockers, emptying
dumpsters and cleaning water fountains.

 

8.               Overtime hours
scheduled prior to the beginning of a shift are not considered “as such.”  An employee must work more than 8 hours in
his 24-hour cycle in order to receive overtime, except on Saturday and Sunday.

 

9.               The Company will
provide a payroll deduction for employees who live in Townships requiring an
employment tax.

 

10.   Management agrees to provide to the Union
annual profit and loss statements for the duration of this Agreement.

 

11.         When employees start “C”
shift on Sunday night at 11:00 PM, the first hour worked (11:00PM to 12:00AM
midnight) will be paid at double time.

 

12.         In the event that the
Company net sales exceeds $13.5 million in any of the fiscal year’s ending on April 30,
2005, April 30, 2006 and April 30, 2007, employee will receive a
bonus payment 3⁄4% of their gross wages for that fiscal year.  The bonus will be paid within 30 days after
the end of the fiscal year.

 

13.         The Company will
establish a Safety Shoe program at a level of $50.00 per employee per year.

 

14.         If an employee incurs an
injury which is determined to be covered by Worker’s Compensation, the employee
shall submit verification from their physician indicating their return to work
date.  The verification must be received
within twenty-four (24) hours of injury. 
The Company will issue a payment equivalent to the Worker’s Compensation
payment.  If the employee is on
compensation and collects benefits for that period, he will reimburse the
company for that week.  This memorandum
will be subject to review after six (6) months period.  If the Company determines that this program
is not functioning as anticipated, the program will be discontinued.

 

26

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