Delaware
3568
61-1478870
(State or Other Jurisdiction of
Incorporation or Organization)
(Primary Standard Industrial
Classification Code Number)
(I.R.S. Employer
Identification Number)
Craig W. Adas, Esq.
Weil, Gotshal & Manges LLP 201 Redwood Shores Parkway Redwood Shores, California 94065 (650) 802-3000 |
Valerie Ford Jacob, Esq.
Stuart Gelfond, Esq. Fried, Frank, Harris, Shriver & Jacobson LLP One New York Plaza New York, New York 10004-1980 (212) 859-8000 |
Proposed Maximum | ||||||
Title of Each Class of | Aggregate | Amount of | ||||
Securities to be Registered | Offering Price(a) | Registration Fee | ||||
Common stock, par value $0.001 per share
|
$172,500,000 | $18,458 | ||||
(a) | Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(o) promulgated under the Securities Act of 1933. |
The information
in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed
with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and it is
not soliciting an offer to buy these securities in any state
where the offer or sale is not
permitted.
|
Per Share | Total | |||||||
Public offering price
|
$ | $ | ||||||
Underwriting discount
|
$ | $ | ||||||
Proceeds, before expenses, to Altra Holdings, Inc.
|
$ | $ | ||||||
Proceeds, before expenses, to the selling stockholders
|
$ | $ |
Merrill Lynch & Co. | Wachovia Securities |
ii
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
F-1
F-2
F-3
F-4
F-5
F-6
F-7
F-8
F-9
F-10
F-11
F-12
F-13
F-14
F-15
F-16
F-17
F-18
F-19
F-20
F-21
F-22
F-23
F-24
F-25
F-26
F-27
F-28
F-29
F-30
F-31
F-32
F-33
F-34
F-35
F-36
F-37
F-38
F-39
F-40
F-41
F-42
F-43
F-44
F-45
F-46
F-47
F-48
F-49
F-50
F-51
F-52
F-53
F-54
F-55
F-56
F-57
F-58
F-59
F-60
F-61
F-62
F-63
F-64
F-65
F-66
F-67
F-68
F-69
F-70
F-71
F-72
F-73
F-74
F-75
F-76
II-1
II-2
II-3
II-4
II-5
II-6
II-7
II-8
II-9
II-10
II-11
II-12
II-13
II-14
II-15
II-16
Table of Contents
Table of Contents
Leverage Our Sales and Distribution Network.
We intend to
continue to leverage our relationships with our distributors to
gain shelf space, further integrate our recently acquired brands
with our core brands and sell new products. In addition, we
intend to continue to actively pursue new OEM opportunities with
innovative and cost-effective product designs and applications
to help maintain and grow our aftermarket revenues. For example,
in 2002 we launched a new product in the wrap spring category.
Despite established competition within this particular category,
we were able to quickly penetrate the market and we expect to
exceed 15% in global market share in 2006 due to the strength of
our Warner Electric brand. We seek to capitalize on customer
brand preference for our products to generate pull-through
aftermarket demand from our distribution channel. We believe
this strategy also allows our distributors to achieve high
profit margins, further enhancing our preferred position with
them.
Focus our Strategic Marketing on New Growth
Opportunities.
We intend to expand our emphasis on strategic
marketing to focus on new growth opportunities in key end user
markets. Through a systematic process that leverages our core
brands and products, we seek to identify attractive markets and
product niches, collect customer and market data, identify
Table of Contents
market drivers, tailor product and service solutions to specific
market and customer requirements and deploy resources to gain
market share and drive future sales growth.
Accelerate New Product and Technology Development.
We are
highly focused on developing new products across our business in
response to customer needs in various markets. Through our
strategic marketing efforts, we continually gain market and
customer intelligence, which feeds new product and technology
development initiatives that are designed to address particular
needs or problems customers identify. This focus has allowed us
to respond quickly to new market opportunities. In total, we
expect new products developed by us during the past three years
to generate approximately $40 million in revenues in 2006.
Capitalize on Growth and Sourcing Opportunities in the
Asia-Pacific Market.
We intend to leverage our established
sales offices in China, Taiwan and Singapore, as well as add
representation in Japan and South Korea. We also intend to
expand our manufacturing presence in Asia beyond our current
plant in Shenzhen, China, to increase sales in the high-growth
Asia-Pacific region. This region also offers opportunities for
low-cost country sourcing of raw materials. During 2005, we
sourced approximately 12% of our purchases from low-cost
countries, resulting in average cost reductions of approximately
40% for these products. Within the next five years, we intend to
utilize our sourcing office in Shanghai to significantly
increase our current level of low-cost country sourced
purchases. We may also consider opportunities to outsource some
of our production from North American and Western European
locations to Asia.
Continue to Improve Operational and Manufacturing
Efficiencies through ABS.
We believe we can continue to
improve profitability through cost control, overhead
rationalization, global process optimization, continued
implementation of lean manufacturing techniques and strategic
pricing initiatives. Our operating plan, based on manufacturing
centers of excellence, provides additional opportunities to
reduce costs by sharing best practices across geographies and
business lines and by consolidating purchasing processes. We
have implemented these principles with our recent acquisitions
of Hay Hall Holdings Limited, or Hay Hall, and Bear Linear LLC,
or Bear Linear, and intend to apply such principles to future
acquisitions.
Pursue Strategic Acquisitions that Complement our Strong
Platform.
With our extensive MPT and motion control
products, our strong customer and distributor relationships and
our know-how in implementing lean enterprise initiatives through
ABS, we have an ideal platform for acquiring and successfully
integrating related businesses, as evidenced through our
acquisition and integration of Hay Hall and Bear Linear.
Management believes that there may be a number of attractive
potential acquisition candidates in the future, in part due to
the fragmented nature of the industry. We plan to continue our
disciplined pursuit of strategic acquisitions to accelerate our
growth, enhance our industry leadership and create value.
Table of Contents
Table of Contents
Common Stock offered by Altra Holdings, Inc
shares
Common Stock to be offered by the selling stockholders
shares
Shares outstanding after the offering
shares
Use of proceeds
We estimate our net proceeds from this offering without exercise
of the over-allotment option will be approximately
$ million.
We may use these proceeds to repay a portion of our outstanding
indebtedness, for general working capital or to make strategic
acquisitions. We will not receive any of the proceeds from the
sale of shares by the selling stockholders.
Risk factors
See Risk Factors and other information included in
this prospectus for a discussion of factors you should carefully
consider before deciding to invest in shares of our common stock.
Dividend policy
We do not currently intend to pay cash dividends on shares of
our common stock.
NASDAQ symbol
AIMC
Table of Contents
Pro Forma
Altra Holdings, Inc.
Predecessor
Combined
Six
Twelve
Twelve
Period from
Eleven
Twelve
Months
Months
Months
December 1, 2004
Months
Months
Ended
Ended
Ended
Through
Ended
Ended
June 30,
December 31,
December 31,
December 31,
November 30,
December 31,
2006
2005
2004(1)
2004
2004
2003
(in thousands)
$
241,504
$
426,446
$
303,662
$
28,625
$
275,037
$
266,863
173,243
307,106
233,100
23,847
209,253
207,941
68,261
119,340
70,562
4,778
65,784
58,922
42,032
89,477
54,294
8,973
45,321
52,968
4,325
378
3,947
(1,300
)
(1,300
)
947
947
11,085
26,229
29,863
12,296
(4,573
)
16,869
(5,131
)
$
7,856
$
1,042
$
1,002
$
(5,893
)
$
6,895
$
(9,306
)
$
33,499
$
44,470
$
19,141
$
(3,654
)
$
22,795
$
3,057
37,282
47,169
24,970
2,528
22,442
14,142
7,183
14,395
6,993
919
6,074
8,653
4,121
7,437
3,778
289
3,489
5,294
Altra Holdings, Inc.
December 31,
June 30,
2006
2005
2004
(in thousands)
$
5,573
$
10,060
$
4,729
78,250
52,863
57,571
372,277
297,691
299,387
228,256
173,760
173,851
75,828
71,622
76,665
(1)
The combined results were prepared by adding the results of
Altra from December 1 to December 31, 2004 to those
from our Predecessor for the 11 month period ending
November 31, 2004. This presentation is not in accordance
with GAAP. The primary differences between our Predecessor and
the successor entity are the inclusion of Kilian in the
successor and the successors book basis has been stepped
up to fair value such that the successor has additional
depreciation, amortization and financing costs. The results of
Kilian are included in Altra for the period from
December 1, 2004 through December 31, 2004. Management
believes that this combined basis presentation provides useful
information for our investors in the comparison to Predecessor
trends and operating results. The combined results are not
necessarily indicative of what our results of operations may
have been if the
Table of Contents
PTH Acquisition and Kilian Transactions had been consummated
earlier, nor should they be construed as being a representation
of our future results of operations.
(2)
EBITDA is defined as earnings before interest, income taxes,
depreciation and amortization. Adjusted EBITDA represents
EBITDA, as adjusted, to exclude gain on sale of assets,
restructuring charges, including asset impairment and transition
expenses, inventory
step-up
costs and
transaction expenses associated with acquisitions. EBITDA and
Adjusted EBITDA are used by us as performance measures.
Management believes that EBITDA and Adjusted EBITDA provide
relevant information for our investors because they are useful
for trending, analyzing and benchmarking the performance and
value of our business. Management also believes that EBITDA and
Adjusted EBITDA are useful in assessing current performance
compared with the historical performance of our Predecessor
because significant line items within our income statements such
as depreciation, amortization and interest expense were
significantly impacted by the PTH Acquisition. Internally,
EBITDA and Adjusted EBITDA are used as a financial measure to
assess the operating performance and are an important measure in
our incentive compensation plans. EBITDA and Adjusted EBITDA
have important limitations, and should not be considered in
isolation or as a substitute for analysis of our results as
reported under GAAP. For example, EBITDA and Adjusted EBITDA do
not reflect:
cash expenditures, or future requirements, for capital
expenditures or contractual commitments;
changes in, or cash requirements for, working capital needs;
the significant interest expense, or the cash requirements
necessary to service interest or principal payments, on debts;
tax distributions that would represent a reduction in cash
available to us; and
any cash requirements for assets being depreciated and amortized
that may have to be replaced in the future.
Table of Contents
Pro Forma
Altra Holdings, Inc.
Predecessor
Combined
Six
Twelve
Twelve
Period from
Eleven
Twelve
Months
Months
Months
December 1,
Months
Months
Ended
Ended
Ended
2004 through
Ended
Ended
June 30,
December 31,
December 31,
December 31,
November 30,
December 31,
2006
2005
2004
2004
2004
2003
$
7,856
$
1,042
$
1,002
$
(5,893
)
$
6,895
$
(9,306
)
4,824
2,497
5,240
(292
)
5,532
(1,658
)
13,636
26,536
5,906
1,612
4,294
5,368
7,183
14,395
6,993
919
6,074
8,653
33,499
44,470
19,141
(3,654
)
22,795
3,057
(1,300
)
(1,300
)
947
947
11,085
2,278
1,699
1,699
1,699
500
1,000
83
83
1,005
4,400
4,400
37,282
47,169
24,970
2,528
22,442
14,142
(3)
Working capital consists of total current assets less total
current liabilities.
Table of Contents
We operate in the highly competitive mechanical power
transmission industry and if we are not able to compete
successfully our business may be significantly harmed.
Changes in general economic conditions or the cyclical
nature of our markets could harm our operations and financial
performance.
We rely on independent distributors and the loss of these
distributors could adversely affect our business.
Table of Contents
We must continue to invest in new technologies and
manufacturing techniques; however, our ability to develop or
adapt to changing technology and manufacturing techniques is
uncertain and our failure to do so could place us at a
competitive disadvantage.
product quality and availability;
price competitiveness;
technical expertise and development capability;
reliability and timeliness of delivery;
product design capability;
manufacturing expertise; and
sales support and customer service.
Our operations are subject to international risks that
could affect our operating results.
fluctuations in currency exchange rates;
exchange rate controls;
compliance with U.S. Department of Commerce export controls;
Table of Contents
tariffs or other trade protection measures and import or export
licensing requirements;
potentially negative consequences from changes in tax laws;
interest rates;
unexpected changes in regulatory requirements;
changes in foreign intellectual property law;
differing labor regulations;
requirements relating to withholding taxes on remittances and
other payments by subsidiaries;
restrictions on our ability to own or operate subsidiaries, make
investments or acquire new businesses in various jurisdictions;
potential political instability and the actions of foreign
governments;
restrictions on our ability to repatriate dividends from our
subsidiaries; and
exposure to liabilities under the Foreign Corrupt Practices Act.
Our operations depend on production facilities throughout
the world, many of which are located outside the United States
and are subject to increased risks of disrupted production
causing delays in shipments and loss of customers and
revenue.
Material weaknesses in our internal controls over
financial reporting have been identified which could result in a
decrease in the value of our common stock.
Table of Contents
If we are unable to complete our assessment as to the
adequacy of our internal controls over financial reporting as of
December 31, 2007 as required by Section 404 of the
Sarbanes-Oxley Act of 2002, or if material weaknesses are
identified and reported, investors could lose confidence in the
reliability of our financial statements, which could result in a
decrease in the value of your investment.
We rely on estimated forecasts of our OEM customers
needs, and inaccuracies in such forecasts could materially
adversely affect our business.
The materials used to produce our products are subject to
price fluctuations that could increase costs of production and
adversely affect our profitability.
Table of Contents
We face potential product liability claims relating to
products we manufacture or distribute, which could result in our
having to expend significant time and expense to defend these
claims and to pay material claims or settlement amounts.
We may be subject to work stoppages at our facilities, or
our customers may be subjected to work stoppages, which could
seriously impact our operations and the profitability of our
business.
Table of Contents
Changes in employment laws could increase our costs and
may adversely affect our business.
We depend on the services of key executives, the loss of
whom could materially harm our business.
If we lose certain of our key sales, marketing or
engineering personnel, our business may be adversely
affected.
We are subject to environmental laws that could impose
significant costs on us and the failure to comply with such laws
could subject us to sanctions and material fines and
expenses.
Table of Contents
We face additional costs associated with our
post-retirement and post-employment obligations to employees
which could have an adverse effect on our financial
condition.
Table of Contents
Our future success depends on our ability to integrate
acquired companies and manage our growth effectively.
We may not be able to protect our intellectual property
rights, brands or technology effectively, which could allow
competitors to duplicate or replicate our technology and could
adversely affect our ability to compete.
Goodwill comprises a significant portion of our total
assets, and if we determine that goodwill has become impaired in
the future, net income in such years may be materially and
adversely affected.
Table of Contents
Unplanned repairs or equipment outages could interrupt
production and reduce income or cash flow.
Our operations are highly dependent on information
technology infrastructure and failures could significantly
affect our business.
Our leverage could adversely affect our financial health
and make us vulnerable to adverse economic and industry
conditions.
make it more challenging for us to obtain additional financing
to fund our business strategy and acquisitions, debt service
requirements, capital expenditures and working capital;
increase our vulnerability to interest rate changes and general
adverse economic and industry conditions;
require us to dedicate a substantial portion of our cash flow
from operations to service our indebtedness, thereby reducing
the availability of our cash flow to finance acquisitions and to
fund working capital, capital expenditures, research and
development efforts and other general corporate activities;
make it difficult for us to fulfill our obligations under our
credit and other debt agreements;
limit our flexibility in planning for, or reacting to, changes
in our business and our markets; and
place us at a competitive disadvantage relative to our
competitors that have less debt.
Table of Contents
We are subject to tax laws and regulations in many
jurisdictions and the inability to successfully defend claims
from taxing authorities related to our current or acquired
businesses could adversely affect our operating results and
financial position.
Genstar Capital Partners III, L.P. and
Stargen III, L.P. (together, the Genstar Funds) control us
and may have conflicts of interest with our other stockholders
in the future.
The market price of our common stock may be volatile,
which could cause the value of your investment to
decline.
We cannot assure you that an active trading market will
develop for our stock.
Table of Contents
A substantial number of our shares of common stock may be
sold in the public market by our principal stockholders, which
could adversely affect the market price of our shares, which in
turn could negatively impact your investment in us.
You will experience immediate and substantial
dilution.
Table of Contents
Because we have not paid dividends in the past and do not
anticipate paying dividends on our common stock in the
foreseeable future, you should not expect to receive dividends
on shares of our common stock.
Table of Contents
competitive factors in the industry in which we operate;
changes in general economic conditions and the cyclical nature
of the markets in which we operate;
our dependence on our distribution network;
our ability to invest in, develop or adapt to changing
technologies and manufacturing techniques;
international risks on our operations;
loss of our key management;
increase in litigation, including product liability claims;
our substantial indebtedness; and
other factors that are described under Risk Factors.
Table of Contents
Table of Contents
on an actual basis; and
on an as adjusted basis to give effect to the conversion of all
shares of our preferred stock
into shares
of common stock, which will occur automatically upon the closing
of this offering, and the sale by us
of shares
of common stock at the assumed initial public offering price of
$ per
share the midpoint of the range set forth on the cover page of
this prospectus, in this offering and our receipt of the net
offering proceeds therefrom, after deducting estimated
underwriting discounts and commissions and offering expenses.
As of June 30, 2006
As
Actual
Adjusted
(Unaudited)
(In thousands)
$
5,573
$
$
165,000
59,938
3,200
2,448
2,787
$
233,373
$
35,500
(2,027
)
$
266,846
$
(1)
Our senior revolving credit facility has $30.0 million of
borrowing capacity (including $10.0 million available for
letters of credit), $27.6 million of which was available as
of June 30, 2006.
Table of Contents
Per Share
$
$
the total number of shares of common stock purchased from us;
the total consideration paid to us, assuming an initial public
offering price of
$ per
share (before deducting the estimated underwriting discount and
commissions and offering expenses payable by us in connection
with this offering); and
the average price per share paid by existing stockholders and by
new investors purchasing shares in this offering:
Total
Average
Shares Purchased
Consideration
Per
Number
Percent
Amount
Percent
Share
$
%
$
%
$
$
%
$
%
$
$
100
%
$
100
%
$
Table of Contents
Table of Contents
Historical
Hay Hall
Hay Hall
Holding
Holdings
Altra Year
U.K. GAAP
U.K. GAAP
Hay Hall
Ended
Year Ended
to U.S.
Hay Hall
Holdings
December 31,
December 31,
GAAP
Holdings
U.S.
Pro Forma
Pro Forma
2005
2005
Adjustments
U.S. GAAP
GAAP(a)
Adjustments
Combined
(In thousands)
$
363,465
£
39,262
£
£
39,262
$
71,496
$
(8,515
)(1)
$
426,446
271,952
23,015
(7
)
23,008
41,898
(6,744
)(2)
307,106
91,513
16,247
7
16,254
29,598
(1,771
)
119,340
66,163
14,909
125
14,784
26,922
(3,608
)(3)
89,477
25,350
1,338
132
1,470
2,676
1,837
29,863
19,514
1,230
1,230
2,240
4,782
(4)
26,536
(17
)
(107
)
(107
)
(195
)
(212
)
5,853
215
132
347
631
(2,945
)
3,539
3,349
292
292
532
(1,384
)(5)
2,497
$
2,504
£
(77
)
£
132
£
55
$
99
$
(1,561
)
$
1,042
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
$
n/a
n/a
n/a
n/a
n/a
$
$
n/a
n/a
n/a
n/a
n/a
$
(a)
Reflects Hay Halls Combined Statement of Operations on a
U.S. GAAP basis after translation to U.S. dollars at
an exchange rate of 1.821 U.S. dollars per U.K. pound
sterling (the average exchange rate for the 2005 fiscal year).
Table of Contents
Hay Hall
Holdings
UK GAAP
Period from
Altra
January 1,
Hay Hall
Six Months
2006
Holdings
Hay Hall
Ended
through
UK GAAP
Hay Hall
Holdings
June 30,
February 10,
U.S. GAAP
Holdings
U.S.
Pro Forma
Pro Forma
2006
2006
Adjustments
U.S. GAAP
GAAP(a)
Adjustments
Combined
(In thousands)
$
234,558
£
4,371
£
£
4,371
$
7,662
$
(716
)(1)
$
241,504
170,431
2,513
(1
)
2,512
4,404
(1,592
)(2)
173,243
64,127
1,858
1
1,859
3,258
876
68,261
40,313
1,706
(12
)
1,694
2,970
(1,251
)(3)
42,032
23,814
152
13
165
288
2,127
26,229
12,815
111
111
195
626
(4)
13,636
(87
)
(87
)
11,086
41
13
54
93
1,501
12,680
4,186
13
13
23
615
(5)
4,824
$
6,900
£
28
£
13
£
41
$
70
$
886
$
7,856
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
$
n/a
n/a
n/a
n/a
n/a
$
$
n/a
n/a
n/a
n/a
n/a
$
(a)
Reflects Hay Halls Unaudited Interim Condensed Statement
of Operations on a U.S. GAAP basis after translation to
U.S. dollars at an exchange rate of 1.753 U.S. dollars
per U.K. pound sterling (the average exchange rate for the six
month period ended June 30, 2006).
Table of Contents
Year
Six Months
Ended
Ended
December 31,
June 30,
2005
2006
(In thousands)
$
(6,805
)
$
(291
)
(1,456
)
(378
)
(254
)
(47
)
$
(8,515
)
$
(716
)
$
(5,121
)
$
(205
)
(1,456
)
(378
)
(254
)
(47
)
(984
)
87
22
$
(6,744
)
$
(1,592
)
$
(1,724
)
$
(156
)
(2,844
)
(330
)
960
240
(1,005
)
$
(3,608
)
$
(1,251
)
$
6,760
$
756
(2,240
)
(195
)
262
65
$
4,782
$
626
$
(1,384
)
$
615
Table of Contents
Altra Holdings, Inc.
Predecessor
Six
Twelve
Period from
Months
Months
Period from
January 1, 2004
Ended
Ended
December 1, 2004
through
Year Ended December 31,
June 30,
December 31,
through
November 30,
2006
2005
December 31, 2004
2004
2003
2002
2001
(in thousands)
$
234,558
$
363,465
$
28,625
$
275,037
$
266,863
$
253,217
$
259,761
170,431
271,952
23,847
209,253
207,941
190,465
193,577
64,127
91,513
4,778
65,784
58,922
62,752
66,184
37,821
61,579
8,973
45,321
49,513
48,303
50,508
2,492
4,683
378
3,947
3,455
3,103
2,518
(99
)
(1,300
)
947
11,085
27,825
23,814
25,350
(4,573
)
16,869
(5,131
)
(16,479
)
13,158
12,815
19,514
1,612
4,294
5,368
5,489
6,655
(87
)
(17
)
148
465
(312
)
94
11,086
5,853
(6,185
)
12,427
(10,964
)
(21,656
)
6,409
4,186
3,349
(292
)
5,532
(1,658
)
2,455
4,794
(700
)
(1,867
)
6,900
2,504
(5,893
)
6,895
(9,306
)
(24,811
)
(252
)
(83,412
)
$
6,900
$
2,504
$
(5,893
)
$
6,895
$
(9,306
)
$
(108,223
)
$
(252
)
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
$
$
$
n/a
n/a
n/a
n/a
$
$
$
n/a
n/a
n/a
n/a
Table of Contents
Altra Holdings, Inc.
Predecessor
Six
Twelve
Period from
Period from
Months
Months
December 1, 2004
January 1, 2004
Ended
Ended
through
through
Year Ended December 31,
June 30,
December 31,
December 31,
November 30,
2006
2005
2004
2004
2003
2002
2001
(in thousands)
$
30,647
$
36,900
$
(3,654
)
$
22,795
$
3,057
$
(90,732
)
$
23,404
34,430
39,500
2,528
22,442
14,142
20,505
23,404
6,746
11,533
919
6,074
8,653
9,547
12,207
4,110
6,199
289
3,489
5,294
5,911
4,374
6,108
12,023
5,623
3,604
(14,289
)
21,934
27,658
(58,196
)
(5,197
)
(180,401
)
953
(1,573
)
(4,585
)
(3,645
)
47,346
(971
)
179,432
(6,696
)
12,746
(13,037
)
(23,379
)
Altra Holdings, Inc.
Predecessor
June 30,
December 31,
December 31,
2006
2005
2004
2003
2002
2001
(in thousands)
$
5,573
$
10,060
$
4,729
$
3,163
$
5,214
$
2,706
78,250
52,863
57,571
51,375
10,200
35,906
372,277
297,691
299,387
174,324
173,034
281,567
228,256
173,760
173,851
1,025
46,183
61,338
75,828
71,622
76,665
62,179
62,877
31,552
(1)
EBITDA is defined as earnings before interest, income taxes,
depreciation and amortization. Adjusted EBITDA represents
EBITDA, as adjusted, to exclude gain on sale of assets,
restructuring charges, including asset impairment and transition
expenses, inventory
step-up
costs and
transaction expenses associated with acquisitions. EBITDA and
Adjusted EBITDA are used by us as performance measures.
Management believes that EBITDA and Adjusted EBITDA provide
relevant information for our investors because they are useful
for trending, analyzing and benchmarking the performance and
value of our business. Management also believes that EBITDA and
Adjusted EBITDA are useful in assessing current performance
compared with the historical performance of our Predecessor
because significant line items within our income statements such
as depreciation, amortization and interest expense were
significantly impacted by the PTH Acquisition. Internally,
EBITDA and Adjusted EBITDA are used as a financial measure to
assess the operating performance and are an important measure in
our incentive compensation plans. EBITDA and Adjusted EBITDA
have important limitations, and should not be considered in
isolation or as a substitute for analysis of our results as
reported under GAAP. For example, EBITDA and Adjusted EBITDA do
not reflect:
cash expenditures, or future requirements, for capital
expenditures or contractual commitments;
changes in, or cash requirements for, working capital needs;
the significant interest expense, or the cash requirements
necessary to service interest or principal payments, on debts;
tax distributions that would represent a reduction in cash
available to us; and
any cash requirements for assets being depreciated and amortized
that may have to be replaced in the future.
Table of Contents
Altra Holdings, Inc.
Predecessor
Six
Twelve
Period from
Period from
Months
Months
December 1,
January 1,
Ended
Ended
2004 through
2004 through
Year Ended December 31,
June 30,
December 31,
December 31,
November 30,
2006
2005
2004
2004
2003
2002
2001
$
6,900
$
2,504
$
(5,893
)
$
6,895
$
(9,306
)
$
(108,223
)
$
(252
)
4,186
3,349
(292
)
5,532
(1,658
)
2,455
4,794
12,815
19,514
1,612
4,294
5,368
5,489
6,655
6,746
11,533
919
6,074
8,653
9,547
12,207
30,647
36,900
(3,654
)
22,795
3,057
(90,732
)
23,404
(99
)
(1,300
)
947
11,085
27,825
83,412
2,278
1,699
1,699
500
1,000
83
1,005
4,400
34,430
39,500
2,528
22,442
14,142
20,505
23,404
(2)
Working capital consists of total current assets less total
current liabilities.
Table of Contents
Table of Contents
Table of Contents
In 2003, our Predecessor incurred transition expenses, including
relocation, training, recruiting and moving costs, directly
related to implementing its restructuring activities amounting
to $9.1 million.
In 2003, our Predecessor recorded a $2.0 million loss from
the sale of certain real estate associated with facilities
closed as a part of its restructuring activities.
In 2005, we re-negotiated two of our U.S. collective
bargaining agreements which we estimate provide for savings of
$0.8 million annually.
In 2006, we re-negotiated one of our U.S. collective
bargaining agreements which we estimate provides for savings of
$2.2 million annually.
Table of Contents
Interim Results of Operations
Six Months Ended
Six Months Ended
June 30, 2006
July 1, 2005
(Unaudited)
(In thousands)
$
234,558
$
188,336
170,431
143,122
64,127
45,214
27.3
%
24.0
%
37,821
31,083
2,492
2,308
23,814
11,823
12,815
9,771
(87
)
13
11,086
2,039
4,186
1,034
$
6,900
$
1,005
Six Months Ended June 30, 2006 Compared with Six
Months Ended July 1, 2005
Net sales
Gross profit
Selling, general and administrative expenses
Table of Contents
Research and development expenses
Interest expense
Provision for income taxes
Table of Contents
Year End Results of Operations
From
Inception
Predecessor
Combined
(December 1,
12 Months
2004)
11 Months
Year Ended
Ended
through
Ended
Year Ended
December 31,
December 31,
December 31,
November 30,
December 31,
2005
2004
2004
2004
2003
(In thousands)
(In thousands)
$
363,465
$
303,662
$
28,625
$
275,037
$
266,863
271,952
233,100
23,847
209,253
207,941
91,513
70,562
4,778
65,784
58,922
25.2
%
23.2
%
16.7
%
23.9
%
22.1
%
61,579
54,294
8,973
45,321
49,513
4,683
4,325
378
3,947
3,455
(99
)
(1,300
)
(1,300
)
947
947
11,085
25,350
12,296
(4,573
)
16,869
(5,131
)
19,514
5,906
1,612
4,294
5,368
(17
)
148
148
465
5,853
6,242
(6,185
)
12,427
(10,964
)
3,349
5,240
(292
)
5,532
(1,658
)
$
2,504
$
1,002
$
(5,893
)
$
6,895
$
(9,306
)
Year Ended December 31, 2005 Compared with Year Ended
December 31, 2004
Net sales
Gross profit
Table of Contents
Selling, general and administrative expenses
Research and development expenses
Gain on sale of assets
Restructuring charge, asset impairment and transition
expenses
Interest expense
Provision for income taxes
Year Ended December 31, 2004 Compared with Year Ended
December 31, 2003
Net sales
Table of Contents
Gross profit
Selling, general and administrative expenses
Research and development expenses
Restructuring charge, asset impairment and transition
expenses
Interest expense
Other non-operating (income) expense
Provision for income taxes
Table of Contents
Altra Holdings, Inc.
Predecessor
Period from
Period from
December 1,
October 2,
2004 to
2004 to
June 30,
March 31,
Dec. 31,
Sept. 30,
July 1,
April 1,
December 31,
November 30,
October 1,
2006
2006
2005
2005
2005
2005
2004
2004
2004
(In thousands, except per share data)
(In thousands, except per
share data)
$
119,774
$
114,784
$
89,974
$
85,155
$
93,034
$
95,302
$
28,625
$
46,338
$
72,542
87,501
82,930
65,046
63,784
69,720
73,402
23,847
36,651
54,859
32,273
31,854
24,928
21,371
23,314
21,900
4,778
9,687
17,683
20,382
19,931
16,678
16,094
16,456
16,935
9,351
8,996
13,082
11,891
11,923
8,250
5,277
6,858
4,965
(4,573
)
691
4,601
6,374
6,441
4,867
4,876
4,902
4,869
1,612
702
1,123
72
(159
)
(20
)
(10
)
13
(28
)
301
5,445
5,641
3,403
411
1,943
96
(6,185
)
17
3,177
1,749
2,437
2,108
207
859
175
(292
)
270
4,258
$
3,696
$
3,204
$
1,295
$
204
$
1,084
$
(79
)
$
(5,893
)
$
(253
)
$
(1,081
)
n/a
n/a
n/a
n/a
$
$
$
$
$
$
$
n/a
n/a
$
$
$
$
$
$
$
n/a
n/a
Table of Contents
Overview
Borrowings
Table of Contents
Capital Expenditures
Pension Plans
Comparative Cash Flows
Table of Contents
Table of Contents
Debt Repayment
Payments Due by Period
2006
2007
2008
2009
2010
Thereafter
$
$
$
$
$
$
165.0
59.9
3.2
0.4
0.6
0.3
0.2
0.1
0.2
1.1
3.0
1.9
1.0
0.6
1.5
0.1
0.2
0.2
0.2
0.2
2.9
$
1.6
$
3.8
$
2.4
$
1.4
$
0.9
$
232.7
(1)
We have semi-annual cash interest requirements due on the
9% senior secured notes with $14.9 million payable in
2006, 2007, 2008, 2009, 2010 and thereafter.
(2)
We have semi-annual cash interest requirements due on the
11
1
/
4
% senior
notes. Assuming an exchange rate of 1.8163 U.S. dollars per
U.K. pound sterling as of June 30, 2006, we will have
$3.4 million payable in 2006, $6.7 million payable in
each of 2007, 2008, 2009 and 2010 and $16.9 million
thereafter. The principal balance of £33.0 million is
due in 2013.
(3)
We have quarterly interest requirements due on the 17% CDPQ
note. Interest is payable in cash or as paid-in-kind to be
accrued against the outstanding principal balance at the
discretion of the Company.
Table of Contents
(4)
We have up to $30.0 million of borrowing capacity, through
November 2009, under our senior revolving credit facility
(including $10.0 million available for use for letters of
credit). At June 30, 2006, we had no outstanding borrowings
and $2.4 million of outstanding letters of credit under our
senior revolving credit facility.
Table of Contents
Table of Contents
Table of Contents
Foreign Currency Exchange Rate Risk
Table of Contents
Interest rate risk
Table of Contents
Table of Contents
Table of Contents
Leverage Our Sales and Distribution Network.
We intend to
continue to leverage our relationships with our distributors to
gain shelf space, further integrate our recently acquired brands
with our core brands and sell new products. In addition, we
intend to continue to actively pursue new OEM opportunities with
innovative and cost-effective product designs and applications
to help maintain and grow our aftermarket revenues. For example,
in 2002 we launched a new product in the wrap spring category.
Despite established competition within this particular category,
we were able to quickly penetrate the market and we expect to
exceed 15% in global market share in 2006 due to the strength of
our Warner Electric brand. We seek to capitalize on customer
brand preference for our products to generate pull-through
aftermarket demand from our distribution channel. We believe
this strategy also allows our distributors to achieve high
profit margins, further enhancing our preferred position with
them.
Focus our Strategic Marketing on New Growth
Opportunities.
We intend to expand our emphasis on strategic
marketing to focus on new growth opportunities in key end user
markets. Through a systematic process that leverages our core
brands and products, we seek to identify attractive markets and
product niches, collect customer and market data, identify
market drivers, tailor product and service solutions to specific
market and customer requirements and deploy resources to gain
market share and drive future sales growth.
Accelerate New Product and Technology Development.
We are
highly focused on driving new product development across our
business in response to customer needs in various markets.
Through our strategic marketing efforts, we continually gain
market and customer intelligence, which feeds new product and
technology development initiatives that are designed to address
particular needs or problems customers identify. This focus has
allowed us to respond quickly to new market opportunities.
Recent new product development examples include the Foot/ Deck
Mount Kopper Kool Brake, a new clutch brake design which
significantly extends product life and can dramatically reduce
blade stop time on commercial and residential lawn tractors, a
new magnetic particle clutch designed to solve a number of
long-standing performance issues on soft-drink bottle capping
applications, and the RA10 speed reducer, designed for use in
the rapidly growing market for armor-fitted military vehicles
used by the US military. In total, we expect new products
developed by us during the past three years to generate
approximately $40 million in revenues in 2006.
Table of Contents
Capitalize on Growth and Sourcing Opportunities in the
Asia-Pacific Market.
We intend to leverage our established
sales offices in China, Taiwan and Singapore, as well as add
representation in Japan and South Korea. We also intend to
expand our manufacturing presence in Asia beyond our current
plant in Shenzhen, China, to increase sales in the high-growth
Asia-Pacific region. This region also offers opportunities for
low-cost country sourcing of raw materials. During 2005, we
sourced approximately 12% of our purchases from low-cost
countries, resulting in average cost reductions of approximately
40% for these products. Within the next five years, we intend to
utilize our sourcing office in Shanghai to significantly
increase our current level of low-cost country sourced
purchases. We may also consider opportunities to outsource some
of our production from North American and Western European
locations to Asia.
Continue to Improve Operational and Manufacturing
Efficiencies through ABS.
We believe we can continue to
improve profitability through cost control, overhead
rationalization, global process optimization, continued
implementation of lean manufacturing techniques and strategic
pricing initiatives. Our operating plan, based on manufacturing
centers of excellence, provides additional opportunities to
reduce costs by sharing best practices across geographies and
business lines and by consolidating purchasing processes. We
have implemented these principles with our recent acquisitions
of Hay Hall and Bear Linear and intend to apply such principles
to future acquisitions.
Pursue Strategic Acquisitions that Complement our Strong
Platform.
With our extensive MPT and motion control
products, our strong customer and distributor relationships and
our know-how in implementing lean enterprise initiatives through
ABS, we have an ideal platform for acquiring and successfully
integrating related businesses, as evidenced through our
acquisition and integration of Hay Hall and Bear Linear.
Management believes that there may be a number of attractive
potential acquisition candidates in the future, in part due to
the fragmented nature of the industry. We plan to continue our
disciplined pursuit of strategic acquisitions to accelerate our
growth, enhance our industry leadership and create value.
Table of Contents
Products
Principal Brands
Principal Markets
Sample Applications
Warner Electric, Wichita Clutch, Formsprag Clutch, Stieber
Clutch, Matrix International, Inertia Dynamics, Twiflex Limited,
Industrial Clutch, Marland Clutch
Aerospace, energy, material handling, metals, turf and garden,
mining
Elevators, forklifts, lawn mowers, oil well drawworks, punch
presses, conveyors
Boston Gear, Nuttall Gear, Delroyd Worm Gear,
Food processing, material handling, metals, transportation
Conveyors, ethanol mixers, packaging machinery, rail car wheel
drives
Ameridrives, Bibby Transmissions
Energy, metals, plastics
Extruders, turbines, steel strip mills
Kilian Manufacturing
Aerospace, material handling, transportation
Cargo rollers, steering columns, conveyors
Warner Electric, Boston Gear, Huco Dynatork, Bear Linear, Matrix
International, Safetek
Material handling, metals, turf and garden
Conveyors, lawn mowers, machine tools
Electromagnetic Clutches and Brakes.
Our industrial
products include clutches and brakes with specially designed
controls for material handling, forklift, elevator, medical
mobility, mobile off-highway, baggage handling and plant
productivity applications. We also offer a line of clutch and
brake products for walk-behind mowers, residential lawn tractors
and commercial mowers. While industrial applications are
predominant, we also manufacture several vehicular niche
applications including on-road refrigeration compressor clutches
and agricultural equipment clutches. We market our
electromagnetic products under the Warner Electric, IDI and
Matrix brand names.
Overrunning Clutches.
Specific product lines include the
Formsprag and Stieber indexing and backstopping clutches.
Primary industrial applications include conveyors, gear
reducers, hoists and cranes, mining machinery, machine tools,
paper machinery, packaging machinery, pumping equipment and
other specialty machinery. We market and sell these products
under the Formsprag, Marland and Stieber brand names.
Heavy Duty Clutches and Brakes.
Our heavy duty clutch and
brake product lines serve various markets including metal
forming, off-shore and land-based oil and gas drilling
platforms, mining material handling, marine applications and
various off-highway and construction equipment segments. Our
line of heavy duty pneumatic, hydraulic and caliper clutches and
brakes are marketed under the Wichita Clutch and Twiflex brand
names.
Table of Contents
Bear Linear.
Bear Linear is a designer and manufacturer
of rugged service electromechanical linear actuators for
off-highway vehicles, agriculture, turf care, special vehicles,
medical equipment, industrial and marine applications.
Huco Dynatork.
Huco Dynatork is a leading manufacturer
and supplier of a complete range of precision couplings,
universal joints, rod ends and linkages.
Safetek.
Safetek manufactures a broad range of high
quality non-asbestos friction materials for industrial, marine,
construction, agricultural and vintage and classic cars and
motorcycles.
Other Accessories.
Our Boston Gear, Warner Electric and
Matrix businesses make or market several other accessories such
as sensors, sleeve bearings, AC/ DC motors, adjustable speed
drives, shaft accessories, face tooth couplings and fluid power
components that are used in numerous end markets.
lowering the cost of manufacturing our existing products;
redesigning existing product lines to increase their efficiency
or enhance their performance; and
developing new product applications.
Table of Contents
Table of Contents
Table of Contents
Number of
Owned/
Location
Brand
Major Products
Employees(1)
Sq Ft.
Leased
Warner Electric
Electromagnetic Clutches & Brakes
233
104,288
Owned
Kilian Manufacturing
Engineered Bearing Assemblies
162
97,000
Owned
Wichita Clutch
Heavy Duty Clutches and Brakes
87
90,400
Owned
Formsprag
Overrunning Clutches
91
79,000
Owned
Ameridrives
Couplings
138
76,200
Owned
Warner Electric
Electromagnetic Clutches & Brakes & Coils
161
35,000
Owned
Boston Gear
Gearing & Power Transmission Components
207
193,000
Leased
Nuttall Gear
Gearing
119
155,509
Leased
Inertia Dynamics
Electromagnetic Clutches & Brakes
110
32,000
Leased
Bear Linear
Linear Actuators
14
21,000
Leased
Altra, Boston Gear
70
30,350
Leased
Stieber
Overrunning Clutches
68
57,609
Owned
Warner Electric
Electromagnetic Clutches & Brakes
135
50,129
Owned
Wichita Clutch
Heavy Duty Clutches and Brakes
42
49,000
Owned
Warner Electric
Electromagnetic Clutches & Brakes
93
38,751
Owned
Kilian Manufacturing
Engineered Bearing Assemblies
73
29,000
Owned
Bibby Transmissions
Couplings
105
26,100
Owned
Warner Electric
Electromagnetic Clutches & Precision Components
341
112,271
Leased
Matrix International
Clutch Brakes, Couplings
122
52,500
Leased
Stieber
Overrunning Clutches
54
32,292
Leased
Kilian Manufacturing
Engineered Bearing Assemblies
47
30,120
Leased
Twiflex
Heavy Duty Clutches and Brakes
55
27,500
Leased
Huco Dynatork
Couplings, Power Transmission Components
59
13,565
Leased
Safetek
Friction Material
16
4,400
Leased
(1)
Includes full-time and part-time employees.
(2)
Certain employees at these locations provide general and
administrative services for our other locations.
(3)
Corporate Headquarters and selective Boston Gear functions.
Table of Contents
Table of Contents
Table of Contents
Name
Age
Position
61
Chief Executive Officer and Director
47
President and Chief Operating Officer
48
Chief Financial Officer
57
Vice President of Global Sales, Altra Industrial
49
Vice President of Human Resources, Altra Industrial
54
Vice President and General Manager, Boston Gear, Overrunning
Clutch, Huco
43
Vice President of Marketing and Business Development, Altra
Industrial
43
Director
63
Director
36
Director
71
Director
61
Director
Table of Contents
Table of Contents
Audit Committee
the integrity of our financial statements;
our compliance with legal and regulatory requirements;
our independent auditors qualifications and independence;
the performance of our independent auditors and our internal
audit function; and
prepare the report required to be prepared by the committee
pursuant to SEC rules.
Nominating and Corporate Governance Committee
identify and to recommend to the board individuals qualified to
serve as directors of our company and on committees of the board;
advise the board with respect to the board composition,
procedures and committees;
develop and recommend to the board a set of corporate governance
principles and guidelines applicable to us; and
oversee the evaluation of the board and our management.
Table of Contents
Compensation Committee
Long-Term
Annual Compensation
Compensation
Other
Restricted
All Other
Name and Principal Position
Year
Salary
Bonus
Annual
Stock Award(s)
Compensation
2005
$
347,500
$
446,375
(1)
$
68,233
(4)
$
12,600
(9)
Chief Executive Officer
and Director
2005
240,994
290,141
(2)
78,000
(5)
174,134
(10)
President and Chief
Operating Officer
2005
208,523
149,925
(3)
39,000
(6)
51,145
(11)
Chief Financial Officer
2005
183,614
112,378
19,500
(7)
12,600
(9)
Vice President and
GM Boston Gear and
Overrunning Clutch
2005
174,882
67,007
19,500
(8)
10,500
(9)
Vice President of Global
Sales Altra Industrial
(1)
Mr. Hurt was paid a signing bonus of $146,000 during 2005.
(2)
Mr. Christenson was paid a signing bonus of $120,000 during
2005.
(3)
Mr. Wall was paid a signing bonus of $10,000 during 2005.
Table of Contents
(4)
Value at time of grant. The aggregate restricted stock holdings
of Mr. Hurt at the end of 2005 were 916,466 shares
with a value of $97,500. Restricted stock grants vest in five
equal annual installments and include the right to receive
dividends on such stock when declared by the board.
(5)
Value at time of grant. The aggregate restricted stock holdings
of Mr. Christenson at the end of 2005 were
780,000 shares with a value of $78,000. Restricted stock
grants vest in five equal annual installments and include the
right to receive dividends on such stock when declared by the
board.
(6)
Value at time of grant. The aggregate restricted stock holdings
of Mr. Wall at the end of 2005 were 390,000 shares
with a value of $39,000. Restricted stock grants vest in five
equal annual installments and include the right to receive
dividends on such stock when declared by the board.
(7)
Value at time of grant. The aggregate restricted stock holdings
of Mr. Novotny at the end of 2005 was 195,000 shares
with a value of $19,500. Restricted stock grants vest in five
equal annual installments and include the right to receive
dividends on such stock when declared by the board.
(8)
Value at time of grant. The aggregate restricted stock holdings
of Mr. Ferris at the end of 2005 was 195,000 shares
with a value of $19,500. Restricted stock grants vest in five
equal annual installments and include the right to receive
dividends on such stock when declared by the board.
(9)
Represents our 401k contribution on the officers behalf.
(10)
Mr. Christenson was reimbursed $161,534 in 2005 for costs
related to his relocation and we made a $12,600 401k
contribution on his behalf.
(11)
Mr. Wall was reimbursed $38,545 in 2005 for costs related
to his relocation and we made a $12,600 401k contribution on his
behalf.
Table of Contents
Table of Contents
accrue
payment-in
-kind
interest at an annual rate of 17%, provided that we may in our
sole discretion pay such interest in whole or in part in cash to
the extent allowed under the terms of the indenture governing
the notes;
mature on November 30, 2019;
are redeemable at our option prior to maturity at specified
prepayment premiums; and
are redeemable at the option of the holder at 101% of the
principal amount with accrued interest in the event of a change
of control of us or any of Altra Industrial.
Table of Contents
Table of Contents
each person that is a beneficial owner of more than 5% of our
outstanding common stock;
each of our named executive officers;
each of our directors and director nominees;
all directors and executive officers as a group; and
each of the selling stockholders.
Shares
Shares Owned Prior
Owned After the
to the Offering
Shares Offered
Offering
Name and Address of Beneficial Owner
Number
%
Number
%
Number
%
25,080,999
63.5
%
904,001
2.3
%
7,000,000
17.7
%
1,882,798
4.8
%
1,262,713
3.2
%
490,000
1.2
%
280,000
*
245,000
*
25,985,000
65.8
%
25,985,000
65.8
%
818,250
2.1
%
318,250
*
31,595,511
80.0
%
*
Less than one percent (1%).
(1)
Genstar Capital Partners III, L.P., a Delaware limited
partnership (Genstar III), owns 63.5% of the
outstanding capital stock of Altra Holdings. Genstar Capital
exercises investment discretion and control over the shares held
by Genstar III. Jean-Pierre L. Conte, the chairman and a
managing director of Genstar Capital, and Richard D. Paterson, a
managing director of Genstar Capital, may be deemed to share
beneficial ownership of the shares shown as beneficially owned
by Genstar III. Each of Mr. Conte and
Mr. Paterson disclaims such beneficial ownership except to
the extent of his pecuniary interest therein. The address of
Genstar III is Four Embarcadero Center, Suite 1900,
San Francisco, California 94111.
Table of Contents
(2)
Stargen III, L.P., a Delaware limited partnership, owns
2.3% of the outstanding capital stock of Altra Holdings. Genstar
Capital exercises investment discretion and control over the
shares held by Stargen III, L.P. Jean-Pierre L. Conte, the
chairman and a managing director of Genstar Capital, and Richard
D. Paterson, a managing director of Genstar Capital, may be
deemed to share beneficial ownership of the shares shown as
beneficially owned by Stargen III, L.P. Each of
Mr. Conte and Mr. Paterson disclaims such beneficial
ownership except to the extent of his pecuniary interest
therein. The address of Stargen III, L.P. is Four
Embarcadero Center, Suite 1900, San Francisco,
California 94111.
(3)
CDPQ is a limited partner of Genstar III and its address is
1000 place Jean-Paul-Riopelle, Montreal, Québec.
(4)
Mr. Bauchiero is a Strategic Advisor and Mr. Gold is a
Principal of Genstar III. Mr. Bauchiero and
Mr. Gold do not directly or indirectly have or share voting
or investment power or the ability to influence voting or
investment power over the shares shown as beneficially owned by
Genstar III.
(5)
Includes 750,000 shares of stock held by Frank Bauchiero
MKC Worldwide.
Table of Contents
Table of Contents
the corporation has elected in its certificate of incorporation
not to be governed by Section 203, which we have elected;
the business combination or the transaction which resulted in
the stockholder becoming an interested stockholder was approved
by the board of directors of the corporation before such
stockholder became an interested stockholder;
upon consummation of the transaction that made such stockholder
an interested stockholder, the interested stockholder owned at
least 85% of the voting stock of the corporation outstanding at
the commencement of the transaction excluding voting stock owned
by directors who are also officers or held in employee benefit
plans in which the employees do not have a confidential right to
tender stock held by the plan in a tender or exchange offer; or
the business combination is approved by the board of directors
of the corporation and authorized at a meeting by two-thirds of
the voting stock which the interested stockholder did not own.
any breach of their duty of loyalty to the corporation or its
stockholders;
acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;
unlawful payments of dividends or unlawful stock repurchases or
redemptions; or
any transaction from which the director derived an improper
personal benefit.
Table of Contents
the officer or director did not act in good faith and in a
manner reasonably believed to be in, or not opposed to, our best
interests; or
with respect to any criminal action or proceeding, the officer
or director had reasonable cause to believe his conduct was
unlawful.
Table of Contents
Table of Contents
incur additional indebtedness;
repay subordinated indebtedness prior to stated maturities;
pay dividends on or redeem or repurchase stock or make other
distributions;
issue capital stock;
make investments or acquisitions;
sell certain assets or merge with or into other companies;
restrict dividends, distributions or other payments from our
subsidiaries;
sell stock in our subsidiaries;
create liens;
enter into certain transactions with stockholders and
affiliates; and
otherwise conduct necessary corporate activities.
Table of Contents
incur additional indebtedness;
repay subordinated indebtedness prior to stated maturities;
pay dividends on or redeem or repurchase stock or make other
distributions;
sell certain assets or merge with or into other companies;
restrict dividends, distributions or other payments from our
subsidiaries;
create liens;
enter into certain transactions with stockholders and
affiliates; and
otherwise conduct necessary corporate activities.
Table of Contents
Number of Shares
Date
After days from the date of this prospectus
(subject, in some cases, to volume limitations).
At various times after days from the date of
this prospectus as described below under Lock-up
Agreements.
1% of the number of shares of our common stock then outstanding,
which will equal
approximately shares
immediately after the offering; or
the average weekly trading volume of our common stock on the
NASDAQ during the four calendar weeks preceding the filing of a
notice on Form 144 with respect to that sale.
Table of Contents
banks, insurance companies, regulated investment companies or
other financial institutions;
persons subject to the alternative minimum tax;
tax-exempt organizations;
dealers in securities, commodities or currencies;
traders in securities that elect to use a
mark-to
-market method
of accounting for their securities holdings;
partnerships or other pass-through entities or investors in such
entities;
controlled foreign corporations, passive
foreign corporations, and corporations that accumulate
earnings to avoid U.S. federal income tax;
U.S. expatriates or former long-term residents of the
United States;
persons who hold our common stock as a position in a hedging
transaction, straddle, conversion
transaction or other risk reduction or integrated
transaction; or
persons deemed to sell our common stock under the constructive
sale provisions of the Code.
Table of Contents
For purposes of this discussion, you are a
non-U.S.
holder if
you are a beneficial owner of our common stock that, for
U.S. federal income tax purposes, is not a
U.S. person. For purposes of this discussion, a
U.S. person is:
an individual who is a citizen or resident of the United States,
including an alien individual who is a lawful permanent resident
of the United States or who meets the substantial
presence test under Section 7701(b) of the Code;
a corporation or other entity taxable as a corporation for
U.S. federal tax purposes created or organized in the
United States or under the laws of the United States or of any
state therein or the District of Columbia;
an estate whose income is subject to U.S. federal income
tax regardless of its source; or
a trust (1) whose administration is subject to the primary
supervision of a U.S. court and of which one or more
U.S. persons has the authority to control all substantial
decisions of the trust or (2) that has made a valid
election to be treated as a U.S. person.
Table of Contents
the gain is effectively connected with your conduct of a
U.S. trade or business (and, if required by an applicable
tax treaty, is attributable to a U.S. permanent
establishment maintained by you);
you are an individual who is present in the United States for a
period (or periods) aggregating 183 days or more during the
calendar year in which the sale or disposition occurs and
certain other conditions are met; or
our common stock constitutes a U.S. real property interest
by reason of our status as a United States real property
holding corporation for U.S. federal income tax
purposes (a USRPHC) at any time within the shorter of the
five-year period preceding the disposition or your holding
period for our common stock.
Table of Contents
Table of Contents
Number of
Underwriter
Shares
Incorporated
Per Share
Without Option
With Option
$
$
$
$
$
$
$
$
$
stockholders
$
$
$
Table of Contents
offer, pledge, sell or contract to sell any common stock,
sell any option or contract to purchase any common stock;
purchase any option or contract to sell any common stock;
grant any option, right or warrant for the sale of any common
stock;
lend or otherwise dispose of or transfer any common stock;
request or demand that we file a registration statement related
to the common stock; or
enter into any swap or other agreement that transfers; in whole
or in part, the economic consequence of ownership of any common
stock whether any such swap or transaction is to be settled by
delivery of shares or other securities, in cash or otherwise.
Table of Contents
the valuation multiples of publicly traded companies that the
underwriters believe to be comparable to us;
our financial information;
the history of, and the prospects for, our company and the
industry in which we compete;
an assessment of our management; its past and present
operations, and the prospects for, and timing of, our future
revenues;
the present state of our development; and
the above factors in relation to market values and various
valuation measures of other companies engaged in activities
similar to ours.
Table of Contents
Table of Contents
Page No.
F-2
F-3
F-4
F-5
F-6
F-7
F-36
F-37
F-38
F-39
F-52
F-53
F-54
F-55
F-56
F-57
F-58
Table of Contents
Table of Contents
Table of Contents
Altra
From
Predecessor (Note 1)
Inception
(December 1, 2004
11 Months
Year Ended
Through
Ended
Year Ended
December 31,
December 31,
November 30,
December 31,
2005
2004)
2004
2003
$
363,465
$
28,625
$
275,037
$
266,863
271,952
23,847
209,253
207,941
91,513
4,778
65,784
58,922
61,579
8,973
45,321
49,513
4,683
378
3,947
3,455
947
11,085
(99
)
(1,300
)
25,350
(4,573
)
16,869
(5,131
)
19,514
1,612
4,294
5,368
(17
)
148
465
5,853
(6,185
)
12,427
(10,964
)
3,349
(292
)
5,532
(1,658
)
2,504
(5,893
)
6,895
(9,306
)
(700
)
(722
)
(6,031
)
5,418
(6,400
)
549
478
3,917
(7,100
)
(173
)
(5,553
)
9,335
$
(4,596
)
$
(6,066
)
$
1,342
$
29
$
139.11
$
N/A
N/A
$
0.07
$
N/A
N/A
18
N/A
N/A
37,937
N/A
N/A
Table of Contents
Accumulated
Other
Net
Invested
Comprehensive
Invested
Capital
Loss
Capital
$
33,142
$
(42,560
)
$
(9,418
)
(9,306
)
(9,306
)
6,385
6,385
9,335
9,335
30,221
(33,225
)
(3,004
)
6,895
6,895
7,922
7,922
(5,553
)
(5,553
)
$
45,038
$
(38,778
)
$
6,260
Accumulated
Convertible
Additional
Other
Preferred
Common
Paid-In
Retained
Comprehensive
Stock
Shares
Stock
Shares
Capital
Deficit
Loss
Total
$
26,334
26,334
$
$
$
$
$
26,334
8,766
8,766
54
8,820
(5,893
)
(5,893
)
(173
)
(173
)
35,100
35,100
54
(5,893
)
(173
)
29,088
400
400
400
1
594
58
59
2,504
2,504
(7,100
)
(7,100
)
$
35,500
35,500
$
1
594
$
112
$
(3,389
)
$
(7,273
)
24,951
Table of Contents
Altra
Predecessor (Note 1)
From Inception
(December 1, 2004
11 Months
Year Ended
Through
Ended
Year Ended
December 31,
December 31,
November 30,
December 31,
2005
2004)
2004
2003
$
2,504
$
(5,893
)
$
6,895
$
(9,306
)
8,574
673
6,074
8,653
2,959
246
669
53
587
942
79
198
1,699
1,699
59
(99
)
(1,300
)
2,126
225
(1,031
)
117
(2,679
)
(2,654
)
(324
)
(4,197
)
(578
)
(1,353
)
(412
)
(6,418
)
(2,232
)
(1,788
)
9,402
3,734
(13,842
)
2,226
(2,126
)
1,477
(445
)
(1,940
)
3,059
(2,778
)
3,427
12,023
5,623
3,604
(14,289
)
(6,199
)
(289
)
(3,489
)
(5,294
)
1,607
(180,112
)
(730
)
125
4,442
3,721
(5,197
)
(180,401
)
953
(1,573
)
26,334
5,000
158,400
400
(12,178
)
(64,242
)
(198
)
14,000
(338
)
(7,087
)
4,408
4,988
(4,408
)
(4,988
)
(835
)
(37
)
7,922
1,385
(14,618
)
70,603
(971
)
179,432
(6,696
)
12,746
(524
)
75
159
1,065
5,331
4,729
(1,980
)
(2,051
)
4,729
3,163
5,214
$
10,060
$
4,729
$
1,183
3,163
$
17,458
$
$
2,796
$
4,061
$
1,761
$
$
446
$
1,249
Table of Contents
1.
Description of Business and Summary of Significant Accounting
Policies
Basis of Preparation and Description of Business
Principles of Consolidation
Net Income Per Share
Table of Contents
Year Ended
December 31,
2005
$
2,504
18
2,419
35,500
37,937
$
139.11
$
0.07
Fair Value of Financial Instruments
Use of Estimates
Foreign currency translation
Table of Contents
Cash and Cash Equivalents
Trade Receivables
Inventories
Property, Plant and Equipment
15 to 45 years
2 to 15 years
Intangible Assets
Goodwill
Table of Contents
Impairment of Goodwill and Indefinite-Lived Intangible
Assets
Impairment of Long-Lived Assets Other Than Goodwill and
Indefinite-Lived Intangible Assets
Debt Issuance Costs
Revenue Recognition
Table of Contents
Shipping and Handling Costs
Warranty Costs
Self-Insurance
Research and Development
Advertising
Stock-Based Compensation
Income Taxes
Table of Contents
2.
Recent Accounting Pronouncements
Table of Contents
3.
Acquisitions
Predecessor
Kilian
Total
$
181,019
$
9,594
$
190,613
1,183
1,184
2,367
39,233
6,096
45,329
52,761
5,108
57,869
4,770
207
4,977
59,320
9,111
68,431
49,004
49,004
104
104
150
150
206,421
21,810
228,231
46,422
3,125
49,547
12,178
12,178
8,127
8,127
34,166
34,166
88,715
15,303
104,018
117,706
6,507
124,213
$
63,313
$
3,087
$
66,400
Table of Contents
Predecessor
Kilian
Total
$
27,802
$
$
27,802
5,122
5,122
32,924
32,924
16,080
16,080
$
49,004
$
$
49,004
(Pro forma, unaudited, in thousands)
2004
2003
$
343,308
$
305,513
(672
)
(19,769
)
4.
Inventories
2005
2004
$
22,512
$
29,219
13,876
12,636
25,109
21,238
61,497
63,093
(6,843
)
(6,361
)
$
54,654
$
56,732
Table of Contents
5.
Property, Plant and Equipment
2005
2004
$
7,892
$
5,848
16,500
14,597
50,402
48,234
74,794
68,679
(8,401
)
(673
)
$
66,393
$
68,006
6.
Goodwill and Intangible Assets
$
63,145
3,255
(1,055
)
$
65,345
December 31, 2005
December 31, 2004
Accumulated
Accumulated
Other Intangibles
Cost
Amortization
Cost
Amortization
$
16,080
$
$
16,080
$
27,802
2,515
27,802
193
5,122
690
5,122
53
(1,048
)
$
47,956
$
3,205
$
49,004
$
246
Table of Contents
7.
Warranty Costs
December 1, 2004
Predecessor
Year Ended
Through
11 Months Ended
December 31,
December 31,
November 30,
2005
2004
2004
$
1,528
$
1,524
$
1,300
1,265
94
1,093
(917
)
(90
)
(869
)
$
1,876
$
1,528
$
1,524
8.
Income Taxes
Predecessor (Note 1)
December 1,
2004
11 Months
Through
Ended
Year Ended
December 31,
December 31,
November 30,
December 31,
2005
2004
2004
2003
$
2,127
$
(6,539
)
$
9,125
$
(9,189
)
3,726
354
3,302
(1,775
)
$
5,853
$
(6,185
)
$
12,427
$
(10,964
)
Predecessor (Note 1)
December 1,
2004
11 Months
Through
Ended
Year Ended
December 31,
December 31,
November 30,
December 31,
2005
2004
2004
2003
$
1,086
$
(71
)
$
3,851
$
434
2,038
810
1,564
587
3,124
739
5,415
1,021
509
(564
)
98
(1,707
)
(284
)
(467
)
19
(972
)
225
(1,031
)
117
(2,679
)
$
3,349
$
(292
)
$
5,532
$
(1,658
)
Table of Contents
Predecessor (Note 1)
December 1,
2004
11 Months
Through
Ended
Year Ended
December 31,
December 31,
November 30,
December 31,
2005
2004
2004
2003
$
2,049
$
(2,165
)
$
4,371
$
(3,749
)
373
(67
)
366
(209
)
(5,927
)
2,011
895
7,153
313
26
614
(97
)
(100
)
1,074
$
3,349
$
(292
)
$
5,532
$
(1,658
)
2005
2004
12,050
$
10,580
8,657
8,575
1,740
1,997
883
842
23,330
21,994
(16,389
)
(18,374
)
6,941
3,620
6,264
4,010
5,278
7,638
306
784
11,848
12,432
$
(4,907
)
$
(8,812
)
Table of Contents
9.
Pension and Other Employee Benefits
Defined Benefit (Pension) and Postretirement Benefit
Plans
Table of Contents
Pension Benefits
Postretirement Benefits
From
Predecessor
From
Predecessor
Inception
(Note 1) 11
Inception
(Note 1) 11
(December 1,
Months
(December 1,
Months
Year Ended
2004) Through
Ended
Year Ended
2004) Through
Ended
December 31,
December 31,
November 30,
December 31,
December 31,
November 30,
2005
2004
2004
2005
2004
2004
$
24,706
$
$
149,338
$
12,570
$
$
30,903
23,750
12,040
591
35
530
295
30
269
1,362
112
8,352
549
59
1,654
55
440
(2,088
)
1,610
687
6,757
(218
)
441
(2,199
)
(424
)
144
125
(203
)
(22
)
(10,541
)
(125
)
(1,651
)
$
27,697
$
24,706
$
155,001
$
10,983
$
12,570
$
28,976
$
4,647
$
$
111,287
$
$
$
4,647
309
3,979
961
22
5,055
1,651
(85
)
(22
)
(10,541
)
(1,651
)
$
5,832
$
4,647
$
109,780
$
$
$
$
(21,865
)
$
(20,059
)
$
(45,221
)
$
(10,983
)
$
(12,570
)
$
(28,976
)
2,390
722
58,494
162
367
1,666
49
223
(1,679
)
(28
)
$
(19,426
)
$
(19,337
)
$
13,496
$
(12,500
)
$
(12,203
)
$
(27,338
)
$
(21,865
)
$
(20,059
)
$
(45,343
)
$
(12,500
)
$
(12,203
)
$
(27,338
)
49
223
2,390
722
58,616
$
(19,426
)
$
(19,337
)
$
13,496
$
(12,500
)
$
(12,203
)
$
(27,338
)
Table of Contents
Pension
Postretirement
Benefits
Benefits
2005
2004
2005
2004
5.5
%
5.8
%
5.5
%
5.8
%
N/A
N/A
N/A
N/A
Pension Benefits
Postretirement Benefits
Predecessor (Note 1)
Predecessor (Note 1)
From
From
Inception
Inception
(December 1,
(December 1,
2004)
11 Months
2004)
11 Months
Year Ended
Through
Ended
Year Ended
Year Ended
Through
Ended
Year Ended
December 31,
December 31,
November 30,
December 31,
December 31,
December 31,
November 30,
December 31,
2005
2004
2004
2003
2005
2004
2004
2003
$
591
$
35
$
530
$
650
$
295
$
30
$
269
$
390
1,362
112
8,352
9,211
549
59
1,654
1,876
2,783
23
183
(431
)
(31
)
(9,747
)
(10,971
)
72
14
1,266
(423
)
(19
)
232
$
1,594
$
116
$
1,932
$
179
$
421
$
89
$
2,087
$
2,498
Pension Benefits
Postretirement Benefits
Predecessor (Note 1)
Predecessor (Note 1)
From
From
Inception
Inception
(December 1,
(December 1,
2004)
11 Months
2004)
11 Months
Year Ended
Through
Ended
Year Ended
Year Ended
Through
Ended
Year Ended
December 31,
December 31,
November 30,
December 31,
December 31,
December 31,
November 30,
December 31,
2005
2004
2004
2003
2005
2004
2004
2003
5.5
%
6.0
%
6.2
%
7.2
%
5.5
%
6.0
%
6.3
%
6.8
%
8.5
%
8.5
%
8.5
%
9.0
%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Table of Contents
1 Percentage-
1 Percentage-
Point
Point
Increase
Decrease
$
122
$
(101
)
1,453
(1,378
)
Allocation Percentage of
Plan Assets at Year End
2005
2005
2004
Asset Category
Actual
Target
Actual
67
%
65
%
(i
)
33
%
35
%
(i
)
(i)
The assets for Altra Industrials funded retirement plan at
the end of 2004 were held by the Predecessor, awaiting transfer.
Once received, they were invested in a manner consistent with
the 2005 target allocation.
Expected cash flows
Pension
Postretirement
Benefits
Benefits
2006
446
208
2007
633
296
2008
818
394
2009
1,035
499
2010
1,212
618
2011-2015
8,577
4,203
Table of Contents
Defined Contribution Plans
10.
Long-Term Debt
Revolving Credit Agreement
Table of Contents
9% Senior Secured Notes
Subordinated Notes
Table of Contents
Predecessor Debt
Capital Leases (see also Note 16)
11.
Convertible Preferred Stock
Dividends
Liquidation
Table of Contents
Redemption
Conversion
Voting
Protective Provision
12.
Stockholders Equity
Amended and Restated Certificate of Incorporation
Registration Rights Agreement
Table of Contents
Restricted Common Stock
Historical and expected future earnings performance
The liquidation preferences and dividend rights of the preferred
stock
Milestones achieved by the company
Marketplace and major competition
Market barriers to entry
The Companys workforce and related skills
Customer and vendor characteristics
Strategic relationships with suppliers
Risk factors and uncertainties facing the Company
Table of Contents
Predecessor
13.
Related-Party Transactions
Kilian Acquisition
Management Agreement
Subordinated Notes
Transition Services Agreement
Table of Contents
Predecessor Related Party Transactions
14.
Concentrations of Credit, Business Risks and Workforce
Table of Contents
Net Sales
Predecessor (Note 1)
December 1,
2004
11 Months
Property, Plant and Equipment
Year Ended
Through
Ended
Year Ended
December 31,
December 31,
November 30,
December 31,
December 31,
December 31,
2005
2004
2004
2003
2005
2004
$
288,883
$
23,071
$
207,731
$
198,244
$
47,587
$
47,284
59,176
4,632
54,141
54,672
16,968
18,760
15,406
922
13,165
13,947
1,838
1,962
$
363,465
$
28,625
$
275,037
$
266,863
$
66,393
$
68,006
15.
Predecessor Restructuring, Asset Impairment and Transition
Expenses
Table of Contents
11 Months Ended
Year Ended
November 30,
December 31,
2004
2003
$
$
306
2,011
641
9,074
$
947
$
11,085
United States Programs
European and Asian Programs
Table of Contents
11 Months
Ended
November 30,
December 31,
2004
2003
$
$
2,011
306
$
306
$
2,011
$
306
$
2,011
11 Months
Ended
November 30,
December 31,
2004
2003
$
$
3,516
641
2,203
24
516
592
$
641
$
6,851
2,223
$
641
$
9,074
11 Months
Ended
November 30,
December 31,
2004
2003
$
$
914
959
3,485
767
1,689
477
641
783
$
641
$
9,074
Table of Contents
Combined,
Period from
11 Months
January 1, 2003
Ended
Year Ended
Through
November 30,
December 31,
November 30,
2004
2003
2004
$
331
$
583
$
914
711
908
1,619
89
103
192
158
416
574
8
284
292
$
1,297
$
2,294
$
3,591
288
2,553
2,841
$
1,585
$
4,847
$
6,432
641
9,074
9,715
$
2,226
$
13,921
$
16,147
11 Months Ended
November 30,
2004
$
1,606
(1,585
)
$
21
Table of Contents
16.
Commitments and Contingencies
Minimum Lease Obligations
Operating
Capital
Year Ending December 31:
Leases
Leases
$
2,709
$
211
2,269
166
1,396
6
680
513
1,464
$
9,031
383
(44
)
$
339
General Litigation
Table of Contents
17.
Unaudited Quarterly Results of Operations (in thousands):
Year Ending December 31, 2005
Fourth
Third
Second
First
$
89,974
$
85,155
$
93,034
$
95,302
24,928
21,371
23,314
21,900
1,295
204
1,084
(79
)
$
18.50
$
$
N/A
$
0.03
$
0.01
$
0.03
N/A
Predecessor (Note 1)
Period from
Inception
Period from
(December 1)
October 1, 2004
to
to
December 31,
November 30,
Year Ending December 31, 2004
2004
2004
Third
Second
First
$
28,625
$
46,338
$
72,542
$
78,151
$
78,006
4,778
9,687
17,683
18,296
20,118
(5,893
)
(253
)
(1,081
)
2,668
5,561
$
N/A
N/A
N/A
N/A
$
N/A
N/A
N/A
N/A
18.
Subsequent Event (Unaudited)
Table of Contents
$
50,981
441
11,668
16,989
1,442
10,509
15,900
56,949
11,862
5,647
17,509
39,440
$
11,541
$
9,064
1,589
10,653
5,247
$
15,900
Table of Contents
Table of Contents
Six Months Ended
June 30,
July 1,
2006
2005
(Unaudited)
(Unaudited)
$
234,558
$
188,336
170,431
143,122
64,127
45,214
37,821
31,083
2,492
2,308
23,814
11,823
12,815
9,771
(87
)
13
11,086
2,039
4,186
1,034
6,900
1,005
1,557
(1,918
)
1,557
(1,918
)
$
8,457
(913
)
$
12.11
$
$
0.18
$
0.03
570
38,699
37,083
Table of Contents
Six Months Ended
June 30,
July 1,
2006
2005
(Unaudited)
(Unaudited)
$
6,900
$
1,005
4,950
3,924
1,796
1,477
654
405
472
474
2,278
1,699
65
28
(7
)
(51
)
2,184
409
(3,667
)
(753
)
(3,181
)
(714
)
(6,153
)
(2,237
)
(446
)
(2,641
)
263
(624
)
6,108
2,401
(4,110
)
(1,960
)
596
(730
)
(54,086
)
(58,196
)
(2,094
)
57,625
(1,928
)
(198
)
(10,800
)
5,057
4,408
(5,057
)
2,510
(61
)
(434
)
47,346
3,776
255
(346
)
(4,487
)
3,737
10,060
4,729
$
5,573
$
8,466
$
10,584
$
9,349
$
2,020
$
1,074
Table of Contents
1.
Organization and Nature of Operations
2.
Basis of Presentation
3.
Recent Accounting Pronouncements
4.
Net Income Per Share
Table of Contents
Year-to-Date
Year-to Date
Ended June 30,
Ended July 1,
2006
2005
$
6,900
$
1,005
570
2,629
1,983
35,500
35,100
38,699
37,083
$
12.11
$
$
0.18
$
0.03
5.
Acquisitions
Table of Contents
$
50,981
441
12,959
16,388
1,099
13,996
13,881
58,764
11,282
3,493
14,775
43,989
6,992
$
6,931
6,950
$
13,881
Table of Contents
Year-to-date
Year-to-date
Ended
Ended
(Pro Forma, Unaudited, in Thousands)
June 30, 2006
July 1, 2005
$
243,891
$
225,750
$
8,527
$
1,325
5.
Cash and Cash Equivalents
6.
Inventories
June 30,
December 31,
2006
2005
$
28,443
$
22,512
16,928
13,876
37,790
25,109
83,161
61,497
(9,970
)
(6,843
)
$
73,191
$
54,654
Table of Contents
7.
Goodwill and Intangible Assets
Goodwill
Cost
$
65,345
6,971
4,211
905
$
77,432
June 30, 2006
December 31, 2005
Accumulated
Accumulated
Cost
Amortization
Cost
Amortization
$
23,030
$
$
16,080
$
34,733
3,922
27,802
2,515
5,122
1,074
5,122
690
(66
)
(1,048
)
$
62,819
$
4,996
$
47,956
$
3,205
9.
Warranty Costs
June 30, 2006
July 1, 2005
$
1,876
$
1,528
825
689
(747
)
(747
)
$
1,954
$
1,470
Table of Contents
10.
Income Taxes
11.
Pension and Other Employee Benefits
Defined Benefit (Pension) and Postretirement Benefit
Plans
Quarter Ended
Pension Benefits
Other Benefits
June 30, 2006
July 1, 2005
June 30, 2006
July 1, 2005
$
151
$
138
$
84
$
94
334
305
150
180
(207
)
(111
)
2
3
(101
)
17
$
280
$
335
$
150
$
274
Year-to-Date Ended
Pension Benefits
Other Benefits
June 30, 2006
July 1, 2005
June 30, 2006
July 1, 2005
$
303
$
265
$
168
$
187
669
614
299
361
(415
)
(216
)
3
3
(201
)
35
$
560
$
666
$
301
$
548
Table of Contents
11.
Financing Arrangements
Revolving Credit Agreement
9% Senior Secured Notes
Table of Contents
11.25% Senior Notes
Mortgage
Capital Leases
Table of Contents
12.
Convertible Preferred Stock
Dividends
Liquidation
Redemption
Conversion
Voting
Protective Provision
Table of Contents
13.
Stockholders Equity
Amended and Restated Certificate of Incorporation
Registration Rights Agreement
Restricted Common Stock
Table of Contents
Historical and expected future earnings performance
The liquidation preferences and dividend rights of the preferred
stock
Milestones achieved by the company
Marketplace and major competition
Market barriers to entry
The Companys workforce and related skills
Customer and vendor characteristics
Strategic relationships with suppliers
Risk factors and uncertainties facing the Company
14.
Related-Party Transactions
Kilian Acquisition
Management Agreement
Table of Contents
Subordinated Notes
15.
Concentrations of Credit, Business Risks and Workforce
16.
Geographic Information
Net Sales
Property, Plant
and Equipment
Year-to-
Year-to-Date
Date
Ended
Ended
June 30,
December 31,
June 30, 2006
July 1, 2005
2006
2005
$
163,994
$
142,773
$
47,590
$
47,587
62,624
37,909
31,577
16,968
7,940
7,654
1,811
1,838
$
234,558
$
188,336
$
80,978
$
66,393
Table of Contents
17.
Commitments and Contingencies
General Litigation
Table of Contents
Table of Contents
Year Ended
31 December
Notes
2005
£000
2
39,262
3
(37,924
)
4
1,338
56
5
(1,286
)
107
215
8
(292
)
(77
)
(77
)
Table of Contents
Year Ended
31 December
2005
£000
(77
)
118
(2,148
)
(2,107
)
Table of Contents
Notes
2005
£000
9
2,593
10
6,131
11
19
8,743
12
8,659
13
7,537
2,207
18,403
14
(13,673
)
4,730
13,473
15
513
16
9,185
25
3,573
13,271
18
2,130
19
(1,928
)
20
202
21
13,473
Table of Contents
Notes
2005
£000
11
2,280
14
(150
)
2,130
18
2,130
19
20
2,130
Table of Contents
Year Ended
31 December
Notes
2005
£000
22
2,789
56
(26
)
(1,129
)
(1,099
)
(186
)
(186
)
(680
)
8
(672
)
(288
)
42
(5
)
(251
)
581
(178
)
238
(1,007
)
(947
)
23
(366
)
Table of Contents
1
Accounting policies
a) Basis of accounting
b) Accounting period
c) Basis of
consolidation
d) Goodwill
e) Tangible fixed
assets
2% to
3
1
/
3
% per
annum
Over term of lease
4% to
33
1
/
3
% per
annum
Table of Contents
f) Investments
g) Stocks
h) Taxation
i) Foreign currency
Table of Contents
j) Leases
k) Turnover
l) Pension costs
m) Finance costs
n) Debt
Table of Contents
2
Turnover
2005
£000
12,348
8,471
14,086
4,357
39,262
2005
£000
30,050
700
7,192
1,320
39,262
3
Operating costs less other income
2005
Continuing
Operations
£000
607
54
(14,438
)
(7,317
)
(15,631
)
(1,200
)
(37,924
)
4
Operating profit
2005
£000
1,075
125
71
113
473
Table of Contents
5
Interest payable and similar charges
2005
£000
1,079
26
181
1,286
6
Staff costs
2005
Number
349
199
548
2005
£000
13,969
55
1,328
279
15,631
7
Directors remuneration
8
Tax on profit on ordinary activities
2005
£000
5
215
220
72
292
Table of Contents
2005
£000
215
65
6
125
24
220
9
Goodwill
Group
£000
745
1,604
2,349
399
2,748
(10
)
(20
)
(30
)
(125
)
(155
)
2,593
2,319
Table of Contents
10
Tangible fixed assets
Freehold
Short
Plant,
Land and
Leasehold
Machinery &
Group
Buildings
Buildings
Equipment
Total
£000
£000
£000
£000
1,579
218
10,331
12,128
13
13
672
672
(132
)
(395
)
(527
)
2
173
175
1,579
88
10,794
12,461
212
114
5,405
5,731
4
4
30
34
1,003
1,067
(132
)
(391
)
(523
)
51
51
242
16
6,072
6,330
1,367
104
4,926
6,397
1,337
72
4,722
6,131
Company
11
Fixed asset investments
2005
Group
Company
2005
2005
£000
£000
2,280
19
19
2,280
Table of Contents
Investment in subsidiary undertaking
Country of
Registration
Holding
%
England
Ordinary
85
Preference
82
B Preference
84
C Preference
100
England
Ordinary
100
USA
Ordinary
100
Germany
Ordinary
100
England
Ordinary
100
England
Ordinary
100
England
Ordinary
100
South Africa
Ordinary
100
Sweden
Ordinary
100
England
Ordinary
100
England
Ordinary
100
England
Ordinary
100
USA
Ordinary
100
England
Ordinary
100
England
Ordinary
100
England
Ordinary
100
England
Ordinary
100
England
Ordinary
100
England
Ordinary
100
England
Ordinary
100
England
Ordinary
100
South Africa
Ordinary
100
England
Ordinary
100
England
Ordinary
100
England
Ordinary
100
Country of
Registration
Holding
%
India
Ordinary
50
Table of Contents
Acquisition of subsidiary undertaking
Profit and Loss Account
£000
144
(43
)
101
101
(20
)
81
Table of Contents
Book and
Fair Value
£000
(As restated)
10
6,563
7,309
8,728
(7,074
)
(5,206
)
(8,280
)
(515
)
(1,604
)
(69
)
745
1,604
2,349
2,280
150
2,130
2,280
12
Stocks
2005
£000
1,668
1,848
5,143
8,659
Table of Contents
Company
13
Debtors
2005
Group
Company
£000
£000
6,792
262
11
83
389
7,537
14
Creditors: Amounts falling due within one year
2005
Group
Company
£000
£000
5,668
4,531
150
353
437
233
2,451
13,673
150
15
Creditors: Amounts falling due after more than one year
2005
Group
Company
£000
£000
331
182
150
513
150
Table of Contents
Finance leases
2005
£000
233
163
168
564
Deferred consideration
16
Creditors: Amounts falling due after more than one year
2005
Group
Company
£000
£000
9,185
Analysis of borrowings
2005
Group
£000
1,200
1,200
7,985
10,385
10,385
Table of Contents
17
Provisions for liabilities and charges
2005
Group
Company
£000
£000
131
(72
)
(12
)
32
(83
)
(8
)
91
83
18
Called-up
share
capital
2005
£000
2,600
2,130
19
Reserves
Profit and
Loss Account
£000
179
(77
)
118
(2,148
)
(1,928
)
Table of Contents
20
Reconciliation of movements in shareholders funds
21
Minority interests
2005
£000
22
Reconciliation of operating profit to operating cash flows
2005
£000
1,338
1,200
(841
)
392
700
2,789
23
Analysis and reconciliation of net debt
At Start
Exchange
At End
of Year
Cash Flow
Acquisition
Adjustment
of Year
£000
£000
£000
£000
£000
1,958
207
42
2,207
(3,853
)
(615
)
(4,468
)
(1,895
)
(408
)
42
(2,261
)
(9,583
)
645
(247
)
(9,185
)
(1,200
)
(1,200
)
(12,678
)
237
42
(247
)
(12,646
)
Table of Contents
2005
£000
(366
)
398
32
(12,678
)
(12,646
)
24
Guarantees and other financial commitments
a) Capital commitments
2005
£000
b) Operating lease
commitments
Land and
Plant and
Buildings
Machinery
2005
2005
£000
£000
5
51
168
65
281
52
454
168
c) Other commitments
2005
£000
79
36
Table of Contents
25
Pension arrangements
Composition of the Scheme
At 31 December 2005
2.65%
5.00%
2.75%
Long Term Rate
of Return
Expected at
Market Value at
31 December
31 December
2005
2005
£000
8.00
%
11,366
4.70
%
15,656
4.10
%
155
27,177
32,281
(5,104
)
1,531
(3,573
)
31 December 2005
£000
1,571
(1,464
)
107
Table of Contents
31 December 2005
£000
1,777
(334
)
(4,511
)
(3,068
)
(2,143
)
107
(3,068
)
(5,104
)
1,777
7
%
(334
)
(1
)%
(3,068
)
(10
)%
26
Subsequent Events
27
Related Party Disclosures
28
Summary of differences between accounting principles in the
United Kingdom and the United State of America
Table of Contents
Notes
2005
£000
(77
)
a
125
b
7
55
202
a
155
b
(268
)
89
(a)
Goodwill Amortization
(b)
Tangible Assets
1.
Balance sheet and profit and loss account presentation
General
2.
Consolidated statement of cashflow
Table of Contents
2005
£000
1,504
(923
)
(947
)
(366
)
(1,895
)
(2,261
)
(2,261
)
Table of Contents
Table of Contents
Item 13.
Other Expenses of Issuance and Distribution
$
18,458
*
*
*
*
*
$
*
To be completed by amendment.
Item 14.
Indemnification of Directors and Officers
Table of Contents
Item 15.
Recent Sales of Unregistered Securities
Table of Contents
Item 16.
Exhibits and Financial Statement Schedules.
Number
Description
1
.1+
Form of Underwriting Agreement
2
.1(1)
LLC Purchase Agreement, dated as of October 25, 2004, among
Warner Electric Holding, Inc., Colfax Corporation and Registrant
2
.2(1)
Assignment and Assumption Agreement, dated as of
November 21, 2004, between Registrant and Altra Industrial
Motion, Inc.
2
.3(2)
Share Purchase Agreement, dated as of November 7, 2005,
among Altra Industrial Motion, Inc. and the stockholders of Hay
Hall Holdings Limited listed therein
2
.4
Asset Purchase Agreement, dated May 18, 2006, among Warner
Electric LLC, Bear Linear LLC and the other guarantors listed
therein
3
.1+
Amended and Restated Certificate of Incorporation of the
Registrant, to be in effect upon the consummation of the offering
3
.2+
Amended and Restated Bylaws of the Registrant, to be in effect
upon the consummation of the offering
4
.1
Amended and Restated Registration Rights Agreement, dated
January 6, 2005, among Registrant, Genstar Capital Partners
II, L.P., Stargen III, L.P. and Caisse de dépôt et
Placement du Québec
4
.2(1)
Indenture, dated as of November 30, 2004, among Altra
Industrial Motion, Inc., the Guarantors party thereto and The
Bank of New York Trust Company, N.A. as trustee
4
.3(3)
First Supplemental Indenture, dated as of February 7, 2006,
among Altra Industrial Inc., the guarantors party thereto, and
The Bank of New York Trust Company, N.A. as trustee
4
.4(2)
Second Supplemental Indenture, dated as of February 8,
2006, among Altra Industrial Inc., the guarantors party thereto,
and The Bank of New York Trust Company, N.A. as trustee
4
.5(3)
Third Supplemental Indenture, dated as of April 24, 2006,
among Altra Industrial Inc., the guarantors party thereto, and
The Bank of New York Trust Company, N.A. as trustee
4
.6(1)
Form of 9% Senior Secured Notes due 2011 (included in
Exhibit 4.1)
4
.7(1)
Registration Rights Agreement, dated as of November 30,
2004, among Altra Industrial Motion, Inc., Jefferies &
Company, Inc., and the Subsidiary Guarantors party thereto
Table of Contents
Number
Description
4
.8(2)
Indenture, dated as of February 8, 2006, among Altra
Industrial Motion Inc. the guarantors party thereto, the Bank of
New York, as trustee and paying agent and the Bank of New York
(Luxembourg) SA, as Luxembourg paying agent
4
.9(3)
First Supplemental Indenture, dated as of April 24, 2006,
among Altra Industrial Inc., the guarantors party thereto, and
The Bank of New York as trustee
4
.10(2)
Form of
11
1
/
4
%
Senior Notes due 2013
4
.11(2)
Registrants Rights Agreement, dated as of February 8, 2006,
among Altra Industrial Inc., the guarantors party thereto, and
Jefferies International Limited, as initial purchasers
4
.12
Note Purchase Agreement, dated November 30, 2004,
between Registrant and Caisse de dépôt et Placement du
Québec
4
.13
Form of Caisse de dépôt et Placement du Québec
Note, due November 30, 2019
5
.1+
Opinion of Weil, Gotshal Manges LLP
10
.1(1)
Credit Agreement, dated as of November 30, 2004, among
Altra Industrial Motion, Inc. and certain subsidiaries of the
Company, as Guarantors, the financial institutions listed
therein, as Lenders, and Wells Fargo Bank, as Lead Arranger
10
.2(1)
Security Agreement, dated as of November 30, 2004, among
Altra Industrial Motion, Inc., the other Grantors listed therein
and The Bank of New York Trust Company, N.A.
10
.3(1)
Patent Security Agreement, dated as of November 30, 2004,
among Kilian Manufacturing Corporation, Warner Electric
Technology LLC, Formsprag LLC, Boston Gear LLC, Ameridrives
International, L.P. and The Bank of New York Trust Company,
N.A.
10
.4(1)
Trademark Security Agreement, dated as of November 30,
2004, among Warner Electric Technology LLC, Boston Gear LLC and
The Bank of New York Trust Company, N.A.
10
.5(1)
Intercreditor and Lien Subordination Agreement, dated as of
November 30, 2004, among Wells Fargo Foothill, Inc., The
Bank of New York Trust Company, N.A. and Altra Industrial
Motion, Inc.
10
.6(1)
Agreement, dated as of October 24, 2004, between
Ameridrives International, L.P. and United Steel Workers of
America Local 3199-10
10
.7(1)
Labor Agreement, dated as of August 9, 2004, between Warner
Electric LLC (formerly Warner Electric Inc.) and International
Association of Machinists and Aerospace Works, AFL-CIO, and
Aeronautical Industrial District Lode 776, Local Lodge 2771
10
.8
Labor Agreement, dated May 17, 2006, between Warner
Electric LLC and United Steelworkers and Local Union
No. 3245
10
.9
Labor Agreement, dated June 6, 2005, between Formsprag LLC
and UAW Local 155
10
.10(1)
Employment Agreement, dated as of January 6, 2005, between
Altra Industrial Motion, Inc. and Michael L. Hurt
10
.11(1)
Employment Agreement, dated as of January 6, 2005, between
Altra Industrial Motion, Inc. and Carl Christenson
10
.12(1)
Employment Agreement, dated as of January 12, 2005, between
Altra Industrial Motion, Inc. and David Wall
10
.13(1)
Registrants 2004 Equity Incentive Plan
10
.14
Amendment to Registrants 2004 Equity Incentive Plan
10
.15(1)
Form of Registrants Restricted Stock Award Agreement
10
.16
Subscription Agreement, dated November 30, 2004, among
Registrant, the preferred purchasers and the common purchasers
as listed therein
10
.17(1)
Advisory Services Agreement, dated as of November 30, 2004,
among Registrant, Altra Industrial Motion, Inc. and Genstar
Capital, L.P.
10
.18(1)
Transition Services Agreement, dated as of November 30,
2004, among Warner Electric Holding, Inc., Colfax Corporation
and Altra Industrial Motion, Inc.
10
.19(1)
Trademarks and Technology License Agreement, dated
November 30, 2004, among Registrant, Colfax Corporation and
Altra Industrial Motion, Inc.
Table of Contents
Number
Description
11
.1
Statement of Computation of Earnings Per Share (required
information contained within this Form S-1)
21
.1
Subsidiaries of Registrant
23
.1
Consent of Ernst & Young LLP, independent registered
public accounting firm
23
.2
Consent of BDO Stoy Hayward LLP, independent chartered
accountants
23
.3+
Consent of Weil, Gotshal & Manges LLP (included in
Exhibit 5.1)
24
.1
Power of Attorney (included on signature page hereto)
(1)
Incorporated by reference to Altra Industrial Motion,
Inc.s Registration Statement on Form S-4 (File
No. 333-124944) filed with the Securities and Exchange
Commission on May 16, 2005.
(2)
Incorporated by reference to Altra Industrial Motion,
Inc.s Current Report on Form 8-K (File
No. 333-124944) filed with the Securities and Exchange
Commission on February 14, 2006.
(3)
Incorporated by reference to Altra Industrial Motion,
Inc.s Annual Report on Form 10-K (File
No. 333-124944) filed with the Securities and Exchange
Commission on May 15, 2006.
+
To be filed by amendment
Table of Contents
December 31,
2005
2004
$
$
287
336
38,613
42,879
$
38,900
$
43,215
$
(154
)
$
(71
)
14,000
14,198
103
13,949
14,127
35,500
35,100
(10,549
)
(6,012
)
$
38,900
$
43,215
Table of Contents
For the Periods
January 1,
December 1,
2005 to
2004 to
December 31,
December 31,
2005
2004
$
$
59
(59
)
2,449
202
4,444
(5,762
)
1,936
(5,964
)
(568
)
(71
)
$
2,504
$
(5,893
)
Table of Contents
For the Periods
January 1,
December 1,
2005 to
2004 to
December 31,
December 31,
2005
2004
$
2,504
$
(5,893
)
(4,444
)
5,762
48
4
198
59
(23
)
44
(71
)
(1,812
)
26,334
14,000
(198
)
400
(340
)
1,610
(39,994
)
1,812
$
$
Table of Contents
Table of Contents
June 30,
December 31,
2006
2005
$
$
58
287
35,617
38,613
$
35,675
$
38,900
$
(1,100
)
$
(154
)
3,200
14,000
102
103
2,202
13,949
35,500
35,500
(2,027
)
(10,549
)
$
35,675
$
38,900
Table of Contents
For the Six Months Ended
June 30, 2006
July 1, 2005
$
$
28
(28
)
1,589
1,214
8,001
1,968
6,412
726
(488
)
(279
)
$
6,900
$
1,005
Table of Contents
For the Six Months Ended
June 30, 2006
July 1, 2005
$
6,900
$
1,005
(8,001
)
(1,968
)
229
24
28
(25
)
(11
)
(857
)
164
(1,754
)
(758
)
(10,800
)
(198
)
12,554
956
1,754
758
$
$
Table of Contents
Table of Contents
Balance at
Beginning
Balance at
Reserve for inventory obsolescence:
of Period
Additions
Deductions
End of Period
$
5,089
$
3,033
$
(1,309
)
$
6,813
6,813
1,459
(2,084
)
6,188
6,188
545
(372
)
6,361
$
6,361
$
2,385
$
(1,903
)
$
6,843
Balance at
Beginning
Balance at
Reserve for uncollectible accounts:
of Period
Additions
Deductions
End of Period
$
2,939
$
730
$
(2,053
)
$
1,616
1,616
589
(772
)
1,433
1,433
135
(144
)
1,424
$
1,424
$
687
$
(314
)
$
1,797
Balance at
Beginning
Balance at
Income tax assets valuation allowance:
of Period
Additions
Deductions
End of Period
$
10,261
$
7,573
$
$
17,834
17,834
895
18,729
18,462
(88
)
18,374
$
18,374
$
(1,985
)
$
16,389
(1)
The difference between the balance at the end of the period
ending November 30, 2004 and the balance at
December 1, 2004 is the result of purchase accounting for
the Acquisition.
Table of Contents
Item 17.
Undertakings
(1) For purposes of determining any liability under the
Securities Act, the information omitted from the form of
prospectus filed as part of this registration statement in
reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities
Act shall be deemed to be part of this registration statement as
of the time it was declared effective.
(2) For the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a
form of prospectus shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Table of Contents
ALTRA HOLDINGS, INC.
By:
/s/
David Wall
Name: David Wall
Title: Chief Financial Officer
Signature
Title
/s/
Michael L. Hurt
Chief Executive Officer and Director
(principal executive officer)
/s/
David Wall
Chief Financial Officer
(principal financial officer and
principal accounting officer)
/s/
Frank E. Bauchiero
Director
/s/
Jean-Pierre L.
Conte
Director
/s/
Darren J. Gold
Director
/s/
Larry McPherson
Director
/s/
Richard D. Paterson
Director
EXHIBIT 2.4
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
BEAR LINEAR LLC, SELLER,
DENNIS M. SCHREIER,
ROBERT F. BAUCHIERO AND
J. CHRIS ARVIDSON,
COLLECTIVELY THE GUARANTORS
AND
WARNER ELECTRIC, LLC, BUYER
MAY 18, 2006
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (together with all the List of Schedules, the List of Defined Terms, the Schedules, and the Exhibits, the "Agreement"), dated as of May 18, 2006, is made by and between BEAR LINEAR LLC, an Illinois limited liability company with offices at 6593 Revlon Drive, Belvidere, Illinois (the "Seller"), DENNIS M. SCHREIER, ROBERT F. BAUCHIERO and J. CHRIS ARVIDSON (collectively, the "Guarantors"), and WARNER ELECTRIC, LLC, a Delaware limited liability company with offices at 449 Gardner Street, South Beloit, Illinois (the "Buyer"). All capitalized terms shall have the meanings ascribed to them herein and in the List of Defined Terms attached to this Agreement.
BACKGROUND OF AGREEMENT:
A. Buyer agrees to purchase from Seller and Seller agrees to sell to Buyer the Seller's business and substantially all of the Seller's assets upon all of the terms and conditions of this Agreement.
B. Seller and Buyer are entering into this Agreement to set forth their entire understanding with respect to such sale and purchase.
C. The Guarantors acknowledge that they will receive substantial benefits from the performance by Seller and Buyer of the transactions contemplated by this Agreement and join in this Agreement to affirm the covenants, representations and warranties of Seller, to assure performance by Seller of its indemnity obligations and to consent to the adjustments of Purchase Price and rights of set-off to which Buyer is entitled under the terms of this Agreement.
AGREEMENT:
NOW, THEREFORE, in consideration of the mutual covenants, representations and warranties contained herein, and intending to be legally bound hereby, Seller and Buyer agree as follows:
1. SALE OF ASSETS.
1.1 Sale of Seller's Assets. Subject to the terms and conditions of this Agreement, Seller shall sell and Buyer shall purchase all of the properties, assets, names and business of Seller as a going concern, except as set forth in Section 2 (the "Business"), and including, without limitation:
1.1.1 Inventory and Raw Materials. Seller's entire inventory of finished products, work in progress and raw materials.
1.1.2 Other Tangible Personal Property. All of Seller's other tangible personal property.
1.1.3 Accounts Receivable. Seller's accounts receivable as of the Closing Date.
1.1.4 Other Intangible Personal Property. Seller's other intangible personal property, including without limitation the following:
(i) All contracts (written and oral) to which Seller is a party as Buyer, in its sole discretion, determines to acquire, including sales or distribution agreements, license agreements, service agreements, equipment leases, contracts or orders for the sale of goods, contracts or orders for the purchase of equipment, raw materials or goods and insurance policies (excluding policies insuring the lives of Seller's officers);
(ii) All of Seller's trademarks, service marks, trade names and franchises, and applications therefor;
(iii) All of Seller's copyrights, patent rights, trade secrets, know-how, design and other proprietary information, including, without limitation, all such rights with respect to any process, design or machinery involved in the preparation of Sellers' products; and
(iv) All of Seller's customer lists and customer records, supplier lists and supplier records, and inventory and equipment records.
1.1.5 Prepaid Expenses. All payments made by Seller with respect to the Business that constitute prepaid expenses of the Business in accordance with GAAP consistently applied.
1.1.6 Real Property. All of Seller's right, title and interest in real property.
1.2 The Purchased Assets. The assets referred to in Section 1.1 above are enumerated more specifically in Schedule 1.2 and are referred to hereinafter as the "Purchased Assets."
2. RETAINED ASSETS. Notwithstanding the provisions of Section 1, the Purchased Assets and the Business do not include, and Seller shall retain, the assets specified in Schedule 2.0 (the "Retained Assets").
3. PURCHASE PRICE.
3.1 Purchase Price. The price (the "Purchase Price") to be paid by Buyer to Seller for the Purchased Assets shall be Three Million Four Hundred Forty-Four Thousand Eight Hundred Sixty-Four Dollars ($3,444,864.00), the assumption of those
liabilities and obligations of Seller to be assumed by Buyer pursuant to
Section 5 and the additional deferred portion of the Purchase Price
established in accordance with Subsections 3.5.1 and 3.5.2 below. The
Purchase Price shall be paid as provided in Sections 3 and 4 hereof and
shall be applied by Seller to satisfy all indebtedness of Seller (including
line of credit debt, long-term debt, accrued rent, equity redemption rights
and deferred liabilities) existing as of the Closing Date, as that term is
defined in Section 11.1 below, with the exception of current trade debt
that Buyer may agree in writing to assume.
3.2 Closing Balance Sheets. At the Closing, the Seller shall deliver an estimated balance sheet dated as of May 17, 2006, (a "Closing Balance Sheet"), and an adjusted balance sheet for the Seller dated as of May 18, 2006 (the "Adjusted Closing Balance Sheet"). The Adjusted Closing Balance Sheet for the Seller shall be created by deleting from the Closing Balance Sheet of Seller the Retained Assets and the Retained Liabilities. The Adjusted Closing Balance Sheet for the Seller shall show the Seller's "Adjusted Net Asset Value at Closing," which shall be the amount by which the Seller's total assets exceed the Seller's total liabilities, as reflected on the Adjusted Closing Balance Sheet.
3.3 Allocation of Purchase Price. The Purchase Price shall be allocated and reported for tax purposes by Buyer and Seller as provided in Schedule 3.3
3.4 Purchase Price Adjustments.
3.4.1 Closing Inventory Count. On, or within five (5) days after, the Closing Date, personnel assigned by each of Seller and Buyer shall jointly inspect all inventory of the Business and prepare a physical count of the inventory of the Business as of the Closing Date.
3.4.2 Working Capital Adjustment. As soon as practicable following the Closing Date, but not later than sixty (60) days thereafter, Buyer and Seller shall jointly determine the amount of the Seller's Working Capital as of the Closing Date and shall execute a certificate (the "Working Capital Certificate") setting forth the final dollar amount of the Working Capital. If the dollar amount of the Working Capital as reflected on the Working Capital Certificate is less than the dollar amount of the Working Capital as reflected on Seller's Adjusted Closing Balance Sheet, then Seller shall pay in cash to Buyer the amount of the difference. Any payment to be made under this Section shall be made, without interest thereon, within five business days after final determination of the amount of the Working Capital as of the Closing Date.
3.4.3 Definition of "Working Capital". For purposes of this Agreement, "Working Capital" as of any date shall be deemed to be the aggregate dollar value determined in accordance with GAAP consisting of: (i) accounts receivable (net of an allowance for bad debts determined in accordance with GAAP), (ii)
inventory (net of an allowance for obsolete and damaged inventory) and
(iii) prepaid expenses, less (y) accounts payable and (z) accrued
expenses.
3.4.4 Arbitration of Disputes Over Working Capital. In the event the parties fail to reach written agreement, within sixty (60) days after the Closing Date, with respect to the determination of the amount of the Working Capital as of the Closing Date, then the parties shall (i) retain as arbitrator PriceWaterhouse Coopers or, failing its agreement to act as arbitrator, such other independent accounting firm as may be mutually agreed upon by the parties to review such matters as to which written agreement has not been reached and (ii) request such arbitrator to act as promptly as practicable in accordance with its own rules to resolve all such disputed matters within thirty (30) days after being retained by the parties. Upon resolution by such arbitrator to its satisfaction of all such disputed matters, such arbitrator shall cause to be prepared and shall deliver to the parties a certificate setting forth the amount of Working Capital as of the Closing Date. The decision of such arbitrator shall be final, non-appealable and binding on Seller and Buyer, and the fees and expenses, if any, of such arbitrator shall be paid one-half by Buyer and one-half by Seller.
3.5 Additional Deferred Purchase Price Payments.
3.5.1 Minimum Deferred Purchase Price Payments. Buyer shall pay to each of the Guarantors a minimum Deferred Purchase Price payment in the amount of Three Hundred Thousand Dollars ($300,000.00) (each, a "Minimum Deferred Purchase Price Payment") payable in three (3) annual payments of One Hundred Thousand Dollars ($100,000.00) each as provided in Section 3.5.3 hereinafter (each, an "Annual Minimum Deferred Purchase Price Installment"). The initial installments of the Minimum Deferred Purchase Price shall each be reduced by a proportionate amount of the total Purchase Price reduction (estimated to be approximately $23,323.00) resulting from inventory returned to Seller before the Closing Date that may not be merchantable or marketable by Buyer within sixty (60) days after the Closing Date.
3.5.2 Contingent Deferred Purchase Price Payments. In addition to the Minimum Deferred Purchase Price Payments, Buyer shall pay to each of Dennis M. Schreier and Robert F. Bauchiero Contingent Deferred Purchase Price payments (the "Contingent Deferred Purchase Price Payments") in an annual amount, if any, equal to EBITDA for the Acquired Business during each of the periods covered in Section 3.5.3 below in excess (the "Annual EBITDA Excess") of $571,428.58 (the "EBITDA Base Amount") multiplied by .175 (the "Annual Payment Rate"). The Annual EBITDA Excess shall not exceed the "Maximum Annual EBITDA Excess" set forth in Section 3.5.3 below for purposes of calculating the Contingent Deferred Purchase Price Payments.
3.5.3 Periods of Payment and Maximum Contingent Deferred Purchase Price Payments. The period for calculation of the Contingent Deferred Purchase Price Payments for each of Dennis M. Schreier and Robert F. Bauchiero are as follows, subject to the Maximum Annual EBITDA Excess (the "MAEE"):
Maximum Contingent Deferred Annual Purchase Price Payment Calendar Year MAEE Payment Rate for Each ------------- ------------- ------------ ---------------------- 2006 $ 28,571.42 .175 $ 5,000.00 2007 $ 628,571.42 .175 $110,000.00 2008 $1,228,571.42 .175 $215,000.00 |
3.5.4 Time for Payment of Deferred Purchase Price Payments. The Annual Minimum Deferred Purchase Price Payment payable to Chris Arvidson shall be paid out per the following: $100,000 at the time of closing, $100,000 on the last business day of 2006 and $100,000 on the last business day of 2007. The Annual Minimum Deferred Purchase Price Payments shall be payable to Dennis M. Schreier and Robert F. Bauchiero on the last business day of calendar years 2006, 2007 and 2008. The annual Contingent Deferred Purchase Price Payments shall be paid to Dennis M. Schreier and Robert F. Bauchiero within thirty (30) days after EBITDA and the Annual EBITDA Excess (less corporate allocations) have been calculated in each of the three (3) annual calculation periods with cash payouts to be no later than March 31 of each year, provided that the audited financial statements for the Acquired Business, if required, have been completed.
3.5.5 Set-Off Against Minimum Deferred Purchase Price Payments. Buyer shall be entitled to set off against the Minimum Deferred Purchase Price Payments (i) any adjustments to the Purchase Price based on a post-Closing reconciliation agreed upon by Buyer and Seller (including the Working Capital Adjustments calculated in accordance with Section 3.4 above and 12.1.5 below), and (ii) any amounts that become payable to Buyer by Seller and by the Guarantors in accordance with Sections 15.2 and 15.3 below.
4. PAYMENT OF PURCHASE PRICE. The Purchase Price shall be paid by delivery from Buyer to Seller, on the Closing Date, of certified or bank cashier's checks, or by wire transfer in immediately available funds, in the aggregate amount of Three Million Four Hundred Forty-Four Thousand Eight Hundred Sixty-Four Dollars ($3,444,864.00).
5. LIABILITIES. As of and from the Closing Date, Buyer shall assume certain of Seller's obligations and liabilities, limited, however to those liabilities reflected on the Adjusted Closing Balance Sheet and expressly agreed in writing to be assumed by Buyer (the "Assumed Liabilities"). The Assumed Liabilities shall not include the liabilities listed on Schedule 5.0 attached hereto or any other liabilities that the Buyer has not agreed in writing to assume. Except for the Assumed Liabilities, Buyer shall not be responsible for, nor is Buyer assuming, any debts, liabilities, or obligations of Seller, whether known, unknown, contingent or otherwise, and whether arising before or after the Closing Date (the "Retained Liabilities"). Without limiting the generality of the foregoing sentence and by way of nonexclusive example, Buyer shall have no liability to employees or former employees of Seller with respect to any employment contract with Seller, any severance or change of control agreement or accrued benefits under any employee benefit plan offered or adopted by Seller prior to Closing, all of which are included in the Retained Liabilities.
6. INTENTION OF PARTIES REGARDING CLOSING. [Deleted by agreement of Buyer and Seller].
7. REPRESENTATIONS AND WARRANTIES OF SELLER. As of the Closing Date, as defined in Section 11.1 below, the Seller represents and warrants to Buyer as follows:
7.1 Authority and Approvals.
7.1.1 Organization and Standing of Seller. The Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Illinois, and has full limited liability company power to own its properties and to carry on its business as now being conducted. The Seller is duly qualified, licensed, or domesticated and in good standing as a foreign corporation and authorized to do business in each jurisdiction in which the character of its properties or the nature of its business requires such license, qualification or authorization, and a list of those states where Seller is so licensed, qualified, or domesticated is set forth in Schedule 7.1.1.
7.1.2 Limited Liability Company Approvals. The Seller has obtained all authorizations and approvals, including, without limitation, the authorization and approval of its Members and Managers required for the execution and delivery of this Agreement as well as the execution and delivery of all other instruments that are to be executed by the Seller in connection with this transaction (the "Other Seller Instruments") and the consummation of the transactions contemplated by this Agreement. This Agreement and the Other Seller Instruments are the valid and binding obligations of the Seller, enforceable against the Seller in accordance with their respective terms, except to the extent that enforceability may be limited or affected by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting generally the enforcement of debtor's or contracting parties' rights, and to the extent that the availability of the remedy of specific
performance or of injunctive relief or other equitable relief with respect to the enforceability of such obligations is subject to the discretion of the court before which any proceeding therefor may be brought.
7.1.3 No Violation of Other Instruments. Neither the execution and delivery of this Agreement or the Other Seller Instruments by the Seller nor the consummation of the transactions contemplated hereby will conflict with, result in a breach of or constitute a default under the certificate of organization and operating agreement of the Seller or any contract, instrument, agreement or understanding to which the Seller is a party or by which it or any of its properties is bound, nor will it result in acceleration in the time for performance of any obligation under any contract or instrument, nor will it result in the creation or imposition of any lien, charge or encumbrance upon any asset transferred under this Agreement, nor give rise to any right of determination, nor will it result in the violation of any law, statute, ordinance, rule or regulation applicable to the Seller.
7.1.4 Assumed and Fictitious Names. The attached Schedule 7.1.4 lists all assumed and fictitious names under which the Seller does business, together with, for each such name, the list of the offices in all states, counties, and all other localities where certificates or other registrations have been filed, the dates such registrations were filed, and the date when each of such registrations expires. Seller has complied with all applicable laws and regulations regarding assumed or fictitious name filings.
7.2 Financial Condition.
7.2.1 Financial Statements. Seller has furnished to Buyer copies
of its financial statements for the fiscal years ending on December
31, 2001, 2002, 2003, 2004 and 2005, respectively. Except as otherwise
disclosed to Buyer in writing, (A) such financial statements (i) are
complete and correct in all material respects, (ii) have been prepared
in accordance with generally accepted accounting principles,
consistently followed and applied throughout the periods involved, and
(iii) present fairly the financial condition of Seller as at their
respective dates and the results of Seller's operations for the
respective periods covered; and (B) the Closing Balance Sheet for
Seller, when delivered at Closing, will be complete and correct in all
material respects, will have been prepared on a basis consistent with
the foregoing financial statements for the Seller and will fairly
present the financial condition of the Seller as of the Closing Date.
7.2.2 Absence of Certain Changes.
(A) Since December 31, 2005, except as set forth in Schedule 7.2.2, the Seller has conducted its Business only in the ordinary course and Seller has not:
(i) Incurred or made any commitment to incur any material obligation or liability, absolute, accrued, contingent or otherwise, whether due or to become due, relating to the Purchased Assets, except current liabilities for trade or business obligations incurred in the ordinary course of business and consistent with its prior practice, other than obligations and liabilities arising out of or incident to this transaction or contemplated by this Agreement;
(ii) Mortgaged, pledged or subjected to any lien, charge, security interest or any other encumbrance or restriction (except liens for current property taxes not yet due and payable) any material portion of its property, Business or assets, tangible or intangible, nor made any commitment to do any of the foregoing;
(iii) Received any notice of termination of any contract, lease or other agreement or suffered any damage, destruction or loss (whether or not covered by insurance) which, singly or in the aggregate, has had or may have a materially adverse effect on its assets, operations or prospects;
(iv) Experienced any actual or threatened employee strikes, work stoppages, slowdowns or lockouts, or had any material change in its relations with its employees, agents, customers or suppliers;
(v) Transferred or granted any rights under, or entered into any settlement regarding the breach or infringement of, or entered into any agreement or commitment relating to, any material United States or foreign license, patent, copyright, trademark, trade name, permit, consent, approval, invention, design or similar rights, or modified any material existing rights with respect thereto, nor made any commitments to do any of the foregoing;
(vi) Made, or made any commitment to make, any material change in the rate of compensation, commission, bonus, deferred compensation arrangement or other direct or indirect remuneration payable, or paid or agreed or orally promised to pay, conditionally or otherwise, any bonus, extra compensation, deferred compensation arrangement or severance or vacation pay, to any of its officer's, employees, salesmen, manufacturer's representatives, distributors or agents;
(vii) Made, or made any commitment to make, any material capital expenditures or material capital additions or betterments other than those of which Buyer has been informed in writing;
(viii) Instituted, threatened to institute, settled or agreed to settle, or suffered any adverse determination in, any litigation, action or proceeding before any court, arbitrator or governmental body relating to such Seller or its property or products;
(ix) Made, or made any commitment to make, any change in its selling, pricing, advertising or personnel practices inconsistent with its prior practice;
(x) Entered into, or made any commitments to enter into, any material transaction, contract or commitment other than in the ordinary course of business except as to the transactions contemplated by this Agreement;
(xi) Made, or made any commitments to make, full or partial payment of any material outstanding obligations prior to the due date thereof or in a manner inconsistent with prior practice;
(xii) Entered into or made any commitment to enter into any contract, commitment or agreement under which it has outstanding indebtedness, obligation or liability for borrowed money or for the deferred purchase price of property;
(xiii) Sold, leased, subleased, assigned or transferred any of its tangible or intangible assets, except in the ordinary course of business, or cancelled any debts or claims, nor made any commitments to do any of the foregoing;
(xiv) Suffered any substantial losses on the sale or disposition of individual items of non-inventory property or waived any rights of material value (other than in connection with the cancellation of sales orders), whether or not in the ordinary course of business, or received notice of cancellation of any firm order in excess of $1,000; or
(xv) Made any change in its accounting procedures or practices.
(B) Since December 31, 2005, except as set forth in Schedule 7.2.2:
(i) No material adverse change in the business, assets, liabilities, financial condition, operations or prospects of Seller has occurred, and no event has occurred or failed to occur (nor, to the knowledge of the Seller, is any such event or failure threatened), whether or not insured against, which has had or may have, either alone or in conjunction with all other such events and failures, a materially adverse effect on the business, assets, liabilities, financial condition, operation or
prospects of Seller, or on this Agreement or the consummation of the transactions contemplated hereby, or on Buyer's ability to conduct the business of Seller after the Closing as conducted by Seller prior to the Closing; and
(ii) The Seller has not become aware of any fact or circumstance which, either alone or in conjunction with all other such facts and circumstances, has had or may have (so far as the Seller can foresee) a materially adverse effect on the business, assets, liabilities, financial condition, operations or prospects of Seller, or on this Agreement or the consummation of the transactions contemplated hereby, or on the ability of Buyer to conduct the Business of Seller after the Closing as conducted by Seller prior to the Closing, which fact or circumstance has not been set forth or referred to in the financial statements delivered pursuant to this Agreement or in any Schedule hereto or in a writing specifically captioned "Disclosure Statement" and delivered to Buyer prior to the date of this Agreement.
7.2.3 Undisclosed Liabilities. The Seller has no material liabilities or obligations, whether accrued, absolute, contingent or otherwise and whether due or to become due, and knows of no basis for any claim against Seller for any such material liabilities or obligations, except to the extent set forth on Schedule 7.2.3 or any other Schedule to this Agreement, or in this Agreement itself, or in Seller's financial statements or any other documents delivered to Buyer.
7.2.4 Indebtedness to and from Officers, Managers and Others. Except as set forth on Schedule 7.2.4, Seller is not indebted to any of its managers, officers, employees or agents, except for amounts due as normal salaries, wages, or reimbursement of ordinary business expenses. Except as set forth on Schedule 7.2.4, no manager, officer, employee or agent of Seller is indebted to Seller, except for ordinary business expense advance not exceeding $500 for each individual.
7.2.5 Backlog. Schedule 7.2.5, which will be delivered and attached to this Agreement as of Closing, is as of May 18, 2006, a true, complete and accurate list of each signed but unfilled purchase order or other written commitment for sale of the products and services of Seller.
7.3 Description and Condition of Assets.
7.3.1 Inventory. The inventories reflected on the Adjusted Closing Balance Sheets, are (i) stated at no more than the lower of cost or market, (ii) usable and saleable in the ordinary course of business of Seller at prevailing market prices without discount, except for those items of inventory described as not so useable and saleable in Schedule 7.3.1, and (iii) owned free and clear of all
liens, claims, charges and encumbrances of any kind or nature. Schedule 7.3.1 also presents a true and complete list of all locations at which inventories are located as of the date of this Agreement, and at which such inventories will be located on the Closing Date. Except as disclosed in Schedule 7.3.1, purchase commitments by Seller for raw materials and other materials to be used by Seller are not in excess of six month's requirements or at prices in excess of current market prices. Sales commitments for finished goods have all been made in the ordinary course of Seller's Business. Since December 31, 2005, no inventory items have been sold or disposed of except in the ordinary course of Seller's business.
7.3.2 Machinery, Equipment and Other Tangible Personal Property. The attached Schedule 7.3.2 is a true and complete list of all tangible personal property owned by Seller or used by Seller in its Business, except for (i) items of inventory that have been sold and are held for delivery and (ii) items having an initial individual cost of $500 or less. Schedule 7.3.2 also includes a separate list of all tangible personal property owned by any third party (whether a customer, supplier, or other person) for which Seller is responsible together with copies of all agreements relating to such property. All property of third parties in the possession of Seller is in such condition that, upon the return of such property to its respective owners, Seller will not be liable in any amount to these owners. Except as stated in Schedule 7.3.2, the tangible personal property owned by or used in the Business of Seller is in useable condition fit for its intended purpose in all material respects, is in the actual possession of Seller, and is owned free and clear of all liens, claims, charges and encumbrances of any kind or nature.
7.3.3 Accounts Receivable. The attached Schedule 7.3.3 is a true, complete, and accurate list of the amounts of all accounts receivable of Seller as of a date no more than five (5) business days before Closing, describing, in the case of each account debtor, the name of the account debtor, the amounts owed, and the agings of the account. All of the accounts receivable reflected on Schedule 7.3.3 are accounts receivable acquired in the ordinary course of business from customers believed to be commercially responsible, subject to no asserted counterclaims, defenses, or setoffs, and collectible in the ordinary course of business without resort to legal proceedings, except as specified in Schedule 7.3.3. At least 97% of the accounts receivable will be collected at the aggregate amount thereof within 90 days after the Closing, and the balance will be collected in full within 180 days of the Closing. Except as specified in Schedule 7.3.3, all of the accounts owned by Seller are free and clear of any liens or encumbrances.
7.3.4 Real Property. The attached Schedule 7.3.4 contains a true and complete description of all real property owned or leased by Seller, with the leases separately so designated. Except as stated in Schedule 7.3.4, Seller has good, marketable and legal title in fee simple to, or a valid leasehold interest in,
all of Seller's real property, free and clear of any mortgages, liens, claims, charges, encumbrances or restrictions of any kind. No charges, violations or claims to an interest in such property have been filed, served, made or, to the knowledge of Seller, threatened, against or relating to such property or structure referred to in Schedule 7.3.4 or any of the operations conducted at any such property or structure, as a result of any violation or alleged violation of any applicable ordinances, requirements, regulations, zoning laws or restrictive covenants (including in any such case and without limitation those relating to environmental protection) or as a result of any encroachment on the property of others. Seller has no right or obligation to acquire any interest in any real property. The buildings and fixtures located on or comprising the real property described on Schedule 7.3.4 are structurally sound with no known material defects and are in good operating condition and repair. Neither the whole nor any portion of such real property or leaseholds is subject to any governmental decree or order to be sold or is being condemned, expropriated or otherwise taken by any governmental body or other person with or without payment of compensation therefor, nor, to the knowledge of Seller, has any such condemnation, expropriation or taking been proposed.
7.3.5 Patents, Copyrights, Trademarks, Etc. Seller owns or possesses licenses or other rights to use all patents, copyrights, trademarks, service marks, service names, trade names, brand names, trade dress, packaging, promotional material and advertising that are required to conduct its Business as it is presently operated. A list of such patents, copyrights, and other items described above is set forth in Schedule 7.3.5. Seller knows of no adverse claims, liens, charges or encumbrances of any kind affecting the items described in Schedule 7.3.5. Seller represents and warrants that it is not infringing upon or otherwise acting adversely to any copyrights, trademarks, trademark rights, service marks, service names, trade names, brand names (whether registered or unregistered), patents, patent rights, licenses or trade secrets, permits, approvals or consents, trade dress, packaging, promotional material or advertising owned or obtained by any other person or persons, and there is no claim or action by any such person pending or, to the knowledge of Seller, threatened with respect thereto or with respect to the rights of Seller in any confidential information or trade secrets used in the conduct of its Business.
7.3.6 Necessary Property. The real, tangible and intangible personal property to be transferred or assigned to the Buyer at the Closing constitutes all of such property necessary for the conduct of Seller's Business in the manner and to the extent presently conducted by it.
7.4 Contractual Relationships.
7.4.1 Labor and Employment Contracts. The attached Schedule 7.4.1 is a true and complete list of all employment agreements and other labor agreements to which Seller is a party. Seller is not in breach of any term or provision of, or in default under, any such agreement or contract, and no event has occurred that, with the passage of time or the giving of notice, or both, would constitute such a breach or default. Seller has no knowledge or reason to know of any pending or threatened demand for recognition, intention to hold an election of a collective bargaining representative or labor dispute which might disrupt Seller's continued operations. Schedule 7.4.1 contains a list of all unfair employment or labor practice charges that are presently pending, as well as a description and the status of each, filed with any court or governmental authority by or on behalf of any employee of Seller. No work stoppage exists at Seller or, to the knowledge of Seller, is threatened.
7.4.2 Employee Benefit Plans and Arrangements. The attached Schedule 7.4.2 is a true and complete list of all employment, profit sharing, deferred compensation, severance pay, bonus, stock option, stock purchase, pension, retainer, consulting, retirement, welfare, or incentive plans, contracts, arrangements or practices maintained or contributed to by Seller and in which any one or more employees of Seller participates or is eligible to participate, including, without limitation, a complete list of all plans, agreements, arrangements or practices which constitute "fringe benefits" to any of the employees of Seller, including, but not limited to, vacation plans or programs, sick leave plans or programs, group medical insurance, group life insurance, disability insurance, workmen's compensation, supplemental unemployment benefits, other insurance coverage (including any self-insured arrangements) and related benefits, including, without limitation, any employee benefit plan (as defined in Section 3(3) of ERlSA), to which Seller is a party or by which it is bound (collectively, the "Employee Plans"). Copies of such plans (and, if applicable, related trust agreements) and all amendments and written interpretations thereto, if any, have been furnished to Buyer together with (i) the three most recent annual reports (Form 5500 including, if applicable, Schedule B thereto) prepared in connection with any such plan and (ii) the three most recent actuarial valuation reports prepared in connection with any such plan. Each Employee Plan has been maintained in substantial compliance with the requirements prescribed by any and all statutes, orders, rules and regulations, including but not limited to ERISA and the Internal Revenue Code (the "Code"), that are applicable to such Plans. No "prohibited transaction", as defined in Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to any Employee Plan or any other employee benefit plan or arrangement maintained by Seller that is covered by Title I of ERISA and that could have a material adverse effect. No "accumulated funding deficiency", as defined in Section 412 of the Code, has been incurred with respect to any pension plan, whether or not waived. No condition exists that could constitute grounds for
termination of the pension plan under Section 4042 of ERISA. Seller has not incurred any liability under Title IV of ERISA arising in connection with the termination of, or complete or partial withdrawal from, any plan covered or previously covered by Title IV of ERISA, which liability, or any portion thereof, could constitute a liability of Buyer on or after the Closing Date. No civil or criminal action brought pursuant to Part V of Title I of ERISA is pending or, to the knowledge of Seller, is threatened against Seller, or any fiduciary of any Employee Plan. All contributions and payments accrued under each Employee Plan will be discharged and paid on or prior to the Closing Date. All compensation and other benefit expenses arising with respect to employees of Seller have been charged appropriately to Seller. Except as set forth in the Schedule 7.4.2, there has been no amendment to, written interpretation or announcement (whether or not written) relating to, or change in employee participation or coverage under, any Employee Plan that would increase materially the expense of maintaining such Plan or Arrangement above the level of the expense incurred in respect of such Plan or Arrangement for the year ended December 31, 2005. Seller is not in breach of any term or provision of, or in default under, any Employee Plan and no event has occurred that, with the passage of time or the giving of notice, or both, would constitute such a breach or default.
7.4.3 Insurance. The attached Schedule 7.4.3 is a true and complete list of all insurance policies owned by Seller, all of which are in full force and effect in the amounts stated in Schedule 7.4.3. Except as otherwise provided in Schedule 7.4.3, Seller shall have delivered to Buyer at the Closing all such insurance policies and binders from Seller's brokers or insurance companies naming Buyer as a named insured.
7.4.4 Other Contracts and Agreements. Except for the agreements referred to in Schedules 7.4.1 and 7.4.2, the leases described in Schedule 7.3.4, and the insurance policies listed in Schedule 7.4.3, the attached Schedule 7.4.4 is a true and complete list categorized by subject matter, of any and all contracts, agreements, arrangements or understandings, written or oral, or other documents, if any, to which Seller is, as of the date of this Agreement, a party, or by which it or any of its assets or properties are bound. The Schedule shall include, without limitation, all:
(a) purchase orders and agreements to or with any one customer or supplier for the sale of materials, products or supplies, except for those that are for a term of less than 12 months and that involve aggregate payments by or to such Seller of less than $5,000;
(b) all employment contracts with any officer, consultant, director or employee except for those terminable at will without penalty or legal obligation to make payments;
(c) all contracts for construction or for the purchase of equipment, machinery and other items that under generally accepted accounting principles constitute capital expenditures;
(d) all contracts relating to the rental or use of equipment, other personal property or fixtures, except for such contracts involving payment of annual rentals or sums in any one case of less than $1,000;
(e) all contracts relating in any way to direct or indirect indebtedness for borrowed money, including intercompany debt between Seller and any of Seller's affiliates or equity owners, or evidenced by a bond, debenture, note or other evidence of indebtedness (whether secured or unsecured) of or to Seller, including, but not limited to, indebtedness by way of lease or installment purchase arrangement, guarantee, purchase price discount obligations, undertaking on which others rely in extending credit, or otherwise, and all conditional sales contracts, chattel and purchase money mortgages and other security arrangements with respect to any equipment, other personal property or fixtures, used or owned by such Seller, except in each case for contracts individually involving not more than $1,000;
(f) all contracts substantially limiting the freedom of Seller to engage in or to compete in any line of business or with any person or in any area or to use or disclose any information in its possession (other than routine supplier and customer confidentiality agreements);
(g) all license agreements, either as licensor or licensee;
(h) all joint venture contracts and agreements involving a sharing of profits;
(i) all agreements granting to others the right to manufacture or distribute Seller's products, including sales agency agreements, to the extent not included above;
(j) all other contracts, except those that (i) are cancelable on 30 day's or less notice without any penalty or other financial obligation or (ii) if not so cancelable, involve annual aggregate payments by or to Seller of $5,000 or less.
All of the agreements and contracts listed in Schedules 7.4.1, 7.4.2 and 7.4.4, the leases described in Schedule 7.3.4, and the insurance policies listed in Schedule 7.4.3 (collectively, together with those contracts omitted from Schedule 7.4.4 solely pursuant to the express exceptions contained in Sections 7.4.4(a), (b), (d), (e) and (j), the "Contracts") are valid and binding obligations of the parties to them, and there are no liabilities arising from any breach or default prior to the date of this Agreement of any provision of any such contract or agreement by any party. No event has occurred that, with the passage of time or the giving of notice, or both, would constitute a breach or default by any party to any such contract or agreement or would cause the acceleration of any obligation of any party or the creation of a lien or encumbrance upon any asset of Seller or used in its business, or would give rise to any right of termination. Seller is not a party to, nor is Seller or any of its properties bound by, any contract, lease, agreement or commitment, the performance of which could have a materially adverse effect on the business condition, financial or otherwise, operations or prospects of Seller.
7.4.5 Third Party Consents. Except as described in Schedule 7.4.5, no consent or other agreement of any persons other than Seller is required for the transfer and assignment to Buyer of the assets to be transferred under this Agreement and the Other Seller Instruments. Any such consent or agreement that is required shall, as of the Closing Date, have been duly obtained by Seller and copies supplied to Buyer.
7.5 Conduct of Operations.
7.5.1 Customers. The attached Schedule 7.5.1 is a true and complete list of all customers that purchased inventory from Seller for the 24-month period ending December 31, 2005.
7.5.2 Suppliers. The attached Schedule 7.5.2 is a true and complete list of all suppliers of goods and services to Seller (except that employees of Seller shall be excluded from the Schedule).
7.5.3 Employees. Seller neither believes nor has reason to believe that any officer or executive of, or any group of employees of, Seller has or have any plans to terminate his, her, or their employment with Seller. Attached as Schedule 7.5.3 is a list of all employees of Seller and their respective wages.
7.5.4 Accrued Employee Benefits. None of Seller's employees is now, or will by the passage of time hereafter become, entitled to receive any vacation time, vacation pay or severance pay attributable to services rendered prior to the Closing except as set forth in the Schedule 7.5.4.
7.5.5 Product and Field Warranties. Seller has provided Buyer true and accurate copies of each of Seller's standard form of product warranty and
guaranty now outstanding and now being issued by Seller with respect to its products. Schedule 7.5.5 attached hereto contains Seller's policy with respect to the return of goods sold by Seller.
7.5.6 Litigation. Except as stated in the attached Schedule 7.5.6, there is no action, proceeding, governmental investigation or other legal or administrative proceeding pending or, to the knowledge of Seller, threatened, against or relating to Seller, or its officers or employees, or its properties, assets or business or the transactions contemplated by this Agreement, and Seller knows of no basis for the same.
7.5.7 Taxes. Seller has no tax deficiency or claim outstanding, proposed or assessed against it with respect to any taxes, including, without limitation, income, property, sales, use, franchise, added value, employee's income withholding and social security taxes, imposed by the United States or by any foreign country or by any state, municipality, subdivision or instrumentality of the United States or of any foreign country, or by any other taxing authority, and Seller has made timely filings of all tax returns due to all such taxing authorities. The federal income tax returns of Seller have been examined and accepted by the Internal Revenue Service (or closed by applicable statutes) for its fiscal years as set forth in Schedule 7.5.7.
7.5.8 Permits; Governmental Approvals. Seller possesses all franchises, licenses, permits and other authority as are necessary for the conduct of Seller's business and is not in default under any of such franchises, permits, licenses or other authority. Except as specified in Schedule 7.5.8, no approval, consent, authorization or other order of, and no consent, designation, filing, registration, qualification or recordation with, any governmental authority is required (i) in connection with the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby, or (ii) to enable Buyer to continue the operation of Seller's business in all material respects as conducted prior to the Closing Date.
7.5.9 Operations in Conformity With Law. Except as provided in the attached Schedule 7.5.9, Seller's operations, as presently conducted, are not in material violation of any law or regulation, including, without limitation, any applicable building code, zoning ordinance, law relating to the employment of labor (including provisions thereof relating to wages, hours, equal opportunity, collective bargaining, age, pregnancy, disability and sex discrimination and the payment of social security and other taxes), regulation of the Federal Occupational Safety and Health Administration, or any law regarding protection of the environment or the use, storage or disposal of hazardous wastes. Seller does not know or have reason to know of any basis on which Seller's present operations when continued by Buyer would be held to violate any such law or
regulation now in effect or scheduled to become effective. Schedule 7.5.9 contains a list of all notices from and related reports to government authorities within three years prior to the date hereof relating to the subject matter of this Section 7.5.9.
7.5.10 Environmental Matters. Except as provided in attached Schedule 7.5.10:
(a) Seller is in compliance in all material respects with applicable Environmental Laws (as defined below) and has not received either written or oral notice from any governmental entity that Seller is a potentially responsible party for a federal or state environmental clean-up or for corrective action, nor received any request for information from any governmental entity under any Environmental Law with respect to any of the real property described in Schedule 7.3.4 or any part thereof.
(b) There is no litigation or other proceeding pending or threatened against Seller under any Environmental Law with respect to any of the real property described in Schedule 7.3.4 or any part thereof.
(c) No Regulated Substances have been or are being generated, used, processed, treated, stored, released, transported or disposed of by Seller, except in compliance in all material respects with applicable Environmental Laws.
(d) Seller has no knowledge of any unresolved notice, citation, summons, complaint, demand or other communication (written or oral) from any governmental entity or other person regarding (i) any alleged violation of any Environmental Law with respect to any of the real property described in Schedule 7.3.4 or any part thereof, or (ii) any alleged liability in connection with any release or remediation of any Regulated Substances, including any investigatory, remedial, or corrective obligations related in any way to the real property described in Schedule 7.3.4 or any part thereof.
(e) None of the following exist at any of the real property described in Schedule 7.3.4 or any part thereof: (i) underground storage tanks, (ii) asbestos-containing materials in any form or condition, (iii) materials or equipment contain polychlorinated biphenyls, or (iv) landfills, surface impoundments or disposal areas.
(f) No person who has owned, leased, occupied or used any of the real property described in Schedule 7.3.4 or any part thereof has generated, used, processed, treated, stored, released or disposed of any
Regulated Substances on such properties in violation of Environmental Laws.
(g) No Regulated Substances are present on, under or at any of the real property described in Schedule 7.3.4 or any part thereof (including without limitation any body of water located thereon, or adjacent thereto or any groundwater located thereunder), or in any improvement located thereon in quantities or at levels that require reporting or remediation under any applicable Environmental Law.
(h) Neither this Agreement nor consummation of the transactions that are the subject of this agreement will result in any obligations for state investigation or clean-up, or notification to or the consent of governmental entities or third-parties, pursuant to any of the "transaction triggered" or "responsible property transfer" provisions of any Environmental Law.
(i) The Seller has not assumed, guaranteed or otherwise become responsible for the liability of any other person or entity for any liability under any Environmental Law with respect to any of the real property described in Schedule 7.3.4 or any part thereof.
As used herein the term "Environmental Laws" shall mean any Law
as amended and as now in effect (including but not limited to the
Federal Water Pollution Control Act, 33 U.S.C. Sections 1251 et seq.,
the Toxic Substances Control Act, 15 U.S.C. Sections 2601 et seq., the
Clean Air Act, 42 U.S.C. Sections 7401 et seq., the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C.
Sections 9601 et seq., the Resource Conservation and Recovery Act, 42
U.S.C. Section 6901 et seq., the Hazardous Materials Transportation
Act, 49 U.S.C. Sections 1801 et seq., and the Federal Insecticide
Fungicide and Rodenticide Act, 7 U.S.C. Section 136 et seq. and their
state, county, and municipal counterparts), or permit, license or
other operating authorization relating to (i) the protection of the
environmental or natural resources, (ii) clean air, clean water,
hazardous and solid waste disposal, safe drinking water, endangered
species, oil spill prevention, groundwater protection, and toxic
substances control, the protection of the public health, safety or
welfare from actual or potential exposure (or the effects of exposure)
to any actual or potential release, presence, discharge, disposal or
emission (whether past or present) of any Regulated Substance, or
(iii) the production, generation, manufacture, processing, labeling,
testing, control, distribution, use, treatment, storage, disposal,
transport or handling of any Regulated Substance.
As used herein the term "Regulated Substances" shall mean any petroleum hydrocarbons or petroleum products or byproducts, any pesticides, toxic chemicals, asbestos or asbestos-containing materials, polychlorinated biphenyls,
toxic mold and any other chemical material, substance or waste that is identified (by listing or characteristic) and any other substance regulated by (or the clean-up of which can be required under) or that constitutes, in whole or in part, a pollutant, contaminant or toxic or hazardous substance or waste under, or the generation handling, use, processing, treatment, storage, release, transport or disposal of which is regulated by, any Environmental Law.
7.5.11 Absence of Certain Business Transactions. Except as set
forth on Schedule 7.5.11, all transactions by Seller with third
parties are and have been conducted on an arm's length basis. Seller
has no knowledge of any favorable pricing, purchase or lease
arrangements that will not continue to be available to Buyer after the
Closing. Except as disclosed in Schedule 7.5.11, neither Seller nor
any manager, officer or employee of Seller or any relative or company
controlled individually or collectively by Seller, has any interest in
(i) any property, real or personal, tangible or intangible, including,
but not limited to, any invention, patent, trade name or trademark
used in connection with or pertaining to Seller's Business or (ii) any
creditor, supplier, customer, manufacturer, representative or
distributor of Seller's products.
7.5.12 Brokers and Finders. Neither Seller nor any person acting on behalf of Seller has employed any broker, agent or finder or incurred any liability for any brokerage fees, agent's commissions or finder's fees in connection with the transactions contemplated by this Agreement.
7.6 Adequacy of Representations and Warranties. Neither the warranties and representations made by Seller in this Agreement and the Other Seller Instruments, nor the financial statements furnished by Seller, nor any certificate or memorandum furnished or to be furnished by Seller, or on its behalf, contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact necessary to make the statements herein or therein not misleading. All representations and warranties of the Seller shall be true on and as of the Closing Date with substantially the same effect as if made on and as of such date.
7.7 Affirmation by Guarantors. The Guarantors affirm, represent and warrant that all of the representations and warranties of Seller enumerated in this Section 7 are true and correct in all material respects.
8. COVENANTS OF SELLER AND GUARANTORS.
8.1 Covenant Not to Compete; Confidential Information.
8.1.1 After the Closing Date, neither Seller nor the Guarantors shall compete directly or indirectly with the business of Buyer in any country in which any product manufactured, marketed or sold by Buyer is sold (the "Geographic Area"). In addition, neither the Seller nor any of the Guarantors shall (without
limiting the generality of the restriction from competing in the Geographic Area) (a) engage in or be interested in, directly or indirectly (whether as owner of, partner, stockholder or capital investor in, lender, advisor or consultant to, sales or marketing representatives for, or otherwise, either alone or in association with others) any business or enterprise competitive with the Business currently conducted by Seller; (b) solicit any employees of Buyer to leave the employ of Buyer; (c) solicit any customer of Buyer with respect to any product or service currently furnished, made or sold by Seller; or (d) disclose any proprietary information or trade secrets relating to the Business purchased by Buyer to any party; provided that the foregoing shall not prohibit any of the Guarantors from owning in the aggregate less than 5% of the outstanding publicly traded stock of any corporation. The obligations of Seller and the Guarantors under this Section 8.1.1 shall continue in full force and effect and be binding on the Guarantors, their respective successors, heirs, executors, administrators and assigns for a period of two years commencing with the Closing or such longer period of time as is set forth in the respective Employment Agreements (as such term is defined in Section 12.3 below) entered into by Dennis M. Schreier and Robert F. Bauchiero and the Buyer. To the extent that any clause, covenant, limitation or restriction contained in this Section 8.1.1 is inconsistent with any clause, covenant, limitation or restriction set forth in Section 8 of the Employment Agreements, the Employment Agreements shall govern the duties and obligations of the parties.
8.1.2 Seller and the Guarantors acknowledge that a breach of the covenant not to compete contained in this Section will cause irreparable harm to Buyer in an amount or amounts difficult to ascertain and accordingly, in the event of a default under this Section, in addition to any other relief to which Buyer may be entitled, Buyer shall be entitled to injunctive relief offered by any court of competent jurisdiction.
8.1.3 Seller and the Guarantors shall hold in strict confidence all confidential data and information obtained from Buyer, or any officer, agent or representative of Buyer.
8.2 Change of Name. It being understood by the parties that among the assets being acquired by Buyer is the name of Seller and all contractions or variations of that name, Seller agrees not to use any such name after the Closing Date. As of the Closing Date, Seller will amend its certificate of organization and take such other steps as may reasonably be required so as to comply with this Section, and will assist Buyer in taking any action that will preserve the unlimited use of Seller's name by Buyer. Seller agrees to take any and all reasonable action requested by Buyer so as to enable Buyer to secure all of Seller's right, title and interest in and to the use of all such names in any jurisdiction in which Seller has used such name and elsewhere in connection with all business or activities that are or may be conducted by Buyer, including, without
limitation, furnishing a written consent to the adoption by Buyer of the name "Bear Linear" for filing in any jurisdiction in which such consent is required to be filed.
8.3 Access to Premises and Information. Prior to the Closing, Seller
shall permit Buyer and its authorized representatives to have full access
to the premises and books and records of Seller and shall allow Buyer at
any time to make copies of such financial and operating data and other
information with respect to Seller's business and properties as Buyer shall
reasonably request. Any investigation or inquiry made by Buyer shall not in
any way affect or lessen the representations and warranties made by Seller
in this Agreement or their survival of the Closing. Seller's obligations to
provide information to Buyer shall be subject to Seller's receipt of
undertakings satisfactory to Seller that Buyer will keep such information,
including business information as well as technical information, in
confidence until the Closing, and in the event that Closing does not take
place, that Buyer will return all copies of non-public documentary
information, will not use any of such information, and will hold all
confidential information in confidence until the same shall become public
by or through persons other than Buyer. Seller shall, for a period of seven
(7) years from the Closing Date, keep available for Buyer's inspection
those records, if any, retained under Section 2.
8.4 Limited Liability Company Approvals. At the Closing, Seller will furnish to Buyer copies of (i) the resolutions of Seller's Board of Managers appropriately certified by Seller's Secretary, reciting that the execution and delivery of this Agreement has been authorized and that appropriate action has been taken to approve this Agreement and the transactions contemplated by it, and (ii) certified copies of the resolutions of its members approving and authorizing this Agreement and its implementation.
8.5 Expenses of Acquisition Transactions; Transfer Taxes. Seller shall pay all its expenses in connection with the transactions contemplated by this Agreement, including, without limitation, the fees and expenses of its legal counsel and accountants and its liquidation expenses, if any. Seller shall also pay any taxes payable in connection with the transfer of assets contemplated by this Agreement.
8.6 Accounts Receivable Certificate. Seller shall furnish to Buyer at
the Closing, as Schedule 8.6, an Accounts Receivable Certificate signed by
Seller's President or Treasurer, which Certificate shall be a complete
schedule of all of Seller's accounts receivable dated no earlier than seven
(7) days prior to the Closing, describing, in the case of each account
debtor, the name of the account debtor, the amounts owed and the agings of
the account. Seller shall also deliver to Buyer, as a portion of the
records to be transferred to Buyer at Seller's place of business, records
indicating the address of each such account debtor and the dates on which
all shipments to such account debtor were made prior to the date of
Seller's Accounts Receivable Certificate for which full payment has not
been received.
8.7 Notice of Breach of Representation or Warranty. Promptly upon Seller becoming aware of the occurrence of, or the impending or threatened occurrence of, any
event that would cause or constitute a breach, or would have caused or constituted a breach had such event occurred prior to the date hereof, of any of the representations and warranties of the Seller contained in or referred to in this Agreement, Seller shall give detailed written notice thereof to Buyer and shall, prior to the Closing Date, use its best efforts to prevent or promptly remedy the same.
8.8 Additional Information. Seller shall deliver such additional information and documents, and shall revise schedules to this Agreement, as Buyer may reasonably request.
9. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and warrants that:
9.1 Organization of Buyer. Buyer is a limited liability company duly organized and validly existing and in good standing under the laws of the State of Delaware and has the limited liability company power to execute, deliver and perform this Agreement.
9.2 Limited Liability Company Approvals. Buyer has obtained all limited liability company authorizations and approvals, including, without limitation, the authorization and approval of its Members and Managers, required for the execution and delivery of this Agreement, as well as the execution and delivery of all other instruments that are to be executed by Buyer in connection with this transaction (the "Other Buyer Instruments") and the consummation of the transactions contemplated by this Agreement. This Agreement and the Other Buyer Instruments are the valid and binding obligations of Buyer, enforceable against Buyer in accordance with their respective terms, except to the extent that enforceability may be limited or affected by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting generally the enforcement of debtor's or contracting parties' rights, and to the extent that the availability of the remedy of specific performance or of injunctive relief or other equitable relief with respect to the enforceability of such obligations is subject to the discretion of the court before which any proceeding therefor may be brought.
9.3 Brokers and Finders. Neither the Buyer nor any person acting on behalf of the Buyer has employed any broker, agent or finder or incurred any liability for any brokerage fees, agent's commissions or finder's fees in connection with the transactions contemplated by this Agreement.
10. COVENANTS OF BUYER.
10.1 Information Kept Confidential by Buyer. Until the transactions contemplated by this Agreement are consummated, Buyer and its respective Members, Managers, officers, agents and representatives shall hold in strict confidence all confidential data and information obtained from Seller or any of Seller's officers, agents, or representatives, except as may be necessary to arrange for Buyer's financing of the
transactions contemplated by this Agreement or as otherwise agreed by Buyer and Seller in writing.
10.2 Records of Seller. Buyer shall, for a period of seven (7) years from the Closing, permit Seller or Seller's authorized representatives to have reasonable access for purposes not inconsistent with this Agreement to those records of Seller transferred from Seller to Buyer under the terms of this Agreement.
11. THE CLOSING; ACQUISITION PROVISIONS.
11.1 Definition. The closing shall take place at the offices of Altra Industrial Motion, Inc., at 11:00 a.m. on May 18, 2006 (sometimes referred to as the "Closing Date" or as the "Closing"). The parties may by mutual agreement set forth in writing any different time or place for the Closing and may, but shall not be required to, extend the Closing Date. Time shall be of the essence of this Agreement.
11.2 Transfer of Title. On the Closing Date, Seller will deliver to Buyer bills of sale with appropriate warranties of title, assignments of leasehold interests and deeds to real property interests, certificates of ownership of vehicles and such other good and sufficient evidence of transfer and conveyance as, in the reasonable opinion of Buyer's counsel, shall be sufficient to transfer all the assets, properties and rights to be transferred under this Agreement, including without limitation, patents, copyrights, trademarks, and other intangibles, and to vest in Buyer good and merchantable title to such property, subject only to the liens, encumbrances and claims reflected in Schedules 7.3.2, 7.3.4, and 7.3.5. At any time and from time to time after the Closing Date, upon request of Buyer and without the payment of any further consideration, Seller shall duly execute, acknowledge and deliver all such further assignments, conveyances, and other instruments of transfer and other assurances and documents and will take such other action consistent with the terms of this Agreement as reasonably may be required by Buyer for the purpose of better assigning, transferring, and conveying to Buyer or reducing to possession of Buyer any or all of the assets transferred under this Agreement. At the request of Buyer, Seller shall also prosecute or otherwise enforce in its own name but for the benefit of Buyer, and at Buyer's expense (unless prosecution or enforcement is necessitated by default of Seller), any and all claims or rights in the name of Seller which, or the benefits of which, are intended or purported to be transferred to Buyer under this Agreement and which are required to be prosecuted or otherwise enforced in such Seller's name. To the extent that the assignment of any contract whose assignment to Buyer is provided for by this Section is not permitted without the consent of any other party and such consent is not obtained prior to Closing, (1) Seller shall use its best efforts to obtain such consent and, if such consent is obtained, shall execute and deliver an appropriate instrument effecting such assignment; and (2) if such consent is not obtained, Seller shall cooperate with Buyer in any reasonably requested manner to provide to and for Buyer the benefits under any such contract, including, without limitation, enforcement of any and all rights of Seller arising out of any breach or cancellation by any other party.
Nothing contained in this section shall be construed as modifying the provisions of Section 7.4.5.
12. CONDITIONS OF BUYER'S OBLIGATION TO CLOSE. The obligations of Buyer are subject to the satisfaction, on or prior to the Closing Date, of all of the following conditions, compliance with which, or the occurrence of which, may be waived in whole or in part by Buyer in writing.
12.1 Representations, Warranties and Covenants; Certificates.
12.1.1 All representations and warranties of the Seller contained in this Agreement shall be true and complete as of the Closing Date as if made at and as of such date, except for changes permitted by the provisions of this Agreement.
12.1.2 Seller shall have performed and satisfied all covenants and conditions required by this Agreement to be performed or satisfied by it on or prior to the Closing Date.
12.1.3 Buyer shall have received a certificate dated the Closing Date to the effect that all representations and warranties of the Seller contained in this Agreement are true and complete on such Date, with the same effect as if made on such Date, except for changes permitted by the provisions of this Agreement, and that Seller has performed and satisfied all covenants and conditions required to be performed or satisfied by it on or prior to the Closing Date, which certificate shall be signed by Seller's President and Treasurer. The delivery of any such certificate shall in no way diminish any warranties and representations of the Seller contained in this Agreement.
12.1.4 Seller shall have achieved cumulative revenues of Four Million Four Hundred Fifty Thousand Dollars ($4,450,000.00) and EBITDA of Two Hundred Seventy-One Thousand Dollars ($271,000.00) for the calendar year ended on December 31, 2005.
12.1.5 As of Closing, Seller shall have sufficient Working Capital as determined by Buyer, in its sole discretion, to operate the Business in the ordinary course and to pay the Assumed Liabilities as they become due and payable. Buyer and Seller have agreed that working capital in the amount of Four Hundred Sixty-Nine Thousand Eight Hundred Sixty-Four Dollars ($469,864.00) is sufficient to satisfy the foregoing condition provided that the sale and purchase transaction is consummated on or before May 19, 2006, and that the minimum working capital requirement shall increase by Ten Thousand Dollars ($10,000.00) per week if Closing is postponed until after May 19, 2006.
12.2 Opinion of Counsel. Sellers shall have furnished Buyer a favorable opinion of Seller's counsel, Pearson Van Houten PLC, dated the Closing Date, in form and substance satisfactory to Buyer and Buyer's counsel, to the effect that:
12.2.1 Seller is a limited liability company duly organized and validly existing and in good standing under the laws of the State of Illinois and has all requisite power to own its assets and conduct its Business as it is now being conducted, to execute and deliver this Agreement and all agreements provided for in this Agreement, and to consummate the transactions contemplated by it;
12.2.2 The execution and delivery of this Agreement and the Other Instruments by Seller and the consummation of the transactions contemplated by this Agreement do not and will not:
(a) result in a breach of any term or provision of or constitute a default under the certificate of organization or the operating agreement of Seller, or under any indenture, mortgage, lease, agreement, instrument or understanding to which Seller is a party or by which it or any of its properties may be bound;
(b) result in the acceleration of any commitment or obligation of Seller;
(c) result in the creation or imposition of any lien, charge or encumbrance upon any asset or property of Seller; and
(d) violate any provisions of law or rule or regulation, or violate any order, decree or other requirement or restriction or require the consent or approval of any court or any judicial, arbitral or governmental authority or other regulatory authority.
12.2.3 The assets of Seller and those used in the Business (including, without limitation, those located on the property of third parties) are not subject to any liability, chattel mortgage, conditional sales agreement, pledge, lien, charge or encumbrance, except as set forth in this Agreement or in Schedules 7.3.2, 7.3.4, and 7.3.5;
12.2.4 No consent or other agreement of any persons other than Seller is required for the transfer and assignment to Buyer of the assets to be transferred under this Agreement or, if required, all such consents and agreements have been duly obtained by Seller and copies supplied to Buyer; and the bills of sale and other instruments of transfer, assignment and delivery tendered to Buyer on the Closing Date are in all respects in compliance with this Agreement and are sufficient in form to vest Buyer with good title to all such assets and business as provided to be transferred;
12.2.5 No consent, approval, authorization, or order of any governmental agency or body or of any court not obtained and in effect on the Closing Date is required for the execution and delivery by Seller of this Agreement or for the consummation by Seller of the transactions contemplated by it;
12.2.6 This Agreement and the Other Seller Instruments have been duly and validly authorized, executed and delivered by Seller and are valid and binding agreements of Seller, enforceable in accordance with their respective terms, except to the extent limited by bankruptcy, insolvency or other laws of general application relating to the enforcement of creditor's rights; and, if so required, the members of Seller have approved this Agreement and the transactions contemplated by it, and no further action or actions on the part of the members is required;
12.2.7 To the knowledge of counsel, after due inquiry, but not including, unless otherwise indicated, review of the docket of any court, no action, suit or proceeding has been instituted or threatened prior to or at the Closing Date in or before any court or governmental authority (i) against or in any other way pertaining to the sale by Seller to Buyer of the Purchased Assets and the Business to be transferred under this Agreement or that would enjoin or make illegal the performance and consummation of this Agreement and the transactions contemplated hereby; or (ii) that, if adversely determined, would have a material adverse effect on the financial condition, business or prospects of Seller, except as set forth in the attached Schedule 12.2.7.
12.3 Employment Agreements and/or Noncompetition Agreements by Key Employees. Dennis M. Schreier and Robert F. Bauchiero shall have entered into an employment and non-competition agreement with Buyer in the form of Exhibit 12.3 attached hereto (the "Employment Agreement(s)").
13. CONDITIONS OF SELLER'S OBLIGATION TO CLOSE. The obligations of Seller under this Agreement are subject to the condition that all representations and warranties of Buyer contained in this Agreement shall be true as of the Closing Date with the same force and effect as if made as of such date, and Buyer shall have performed and satisfied all covenants and conditions of this Agreement to be performed or satisfied by Buyer at or prior to the Closing Date.
14. TERMINATION OF AGREEMENT.
14.1 Permitted Termination. This Agreement may be terminated:
(a) by the mutual consent of Seller and Buyer;
(b) by either Seller or Buyer if Closing has not occurred on or before May 31, 2006; provided, however, that a party then in breach of its obligations under this Agreement shall not have the right to terminate this Agreement;
(c) by Buyer if any of the representations and warranties of Seller contained in Section 7 hereof were incorrect in any material respect when made or become incorrect in any material respect; and
(d) by Seller if any of the representations and warranties of Buyer contained in Section 9 hereof were incorrect in any material respect when made or become incorrect in any material respect.
14.2 Return of Documents. If this Agreement is terminated for any reason pursuant to Section 14.1 above, each party shall return to the other party all documents and copies thereof which shall have been furnished to it by such other party, or with the agreement of the other party, shall destroy all such documents and copies thereof and certify in writing to the other party any such destruction.
14.3 Limitations on Remedies. If this Agreement is terminated by Seller or Buyer as permitted under Section 14.1 above and not as a result of a breach of a representation or warranty or the failure of any party to perform its obligations hereunder, such termination shall be without liability of any party. If a party terminates this Agreement as a result of a breach of a representation or warranty by the other party or the failure of the other party to perform its obligations hereunder, the nonbreaching party shall, in addition to other remedies provided by this Agreement, at law, or in equity, be entitled to reimbursement from the breaching party for all expenses incurred by the nonbreaching party in connection with this Agreement and the transactions contemplated hereby.
15. SURVIVAL OF REPRESENTATIONS AND INDEMNIFICATION.
15.1 Statements Deemed Representations and Warranties. All statements contained in any exhibit, schedule, document, or certificate or Other Seller Instrument or Other Buyer Instrument delivered by or on behalf of any party, or in connection with the transactions contemplated by this Agreement, shall be deemed representations and warranties by such party. All representations and warranties made by the parties to this Agreement or made in this Agreement shall survive (i) any investigations made by or on behalf of the parties; (ii) the execution and delivery of this Agreement; and (iii) the Closing.
15.2 Indemnification of Buyer by Seller. Seller agrees to indemnify Buyer and hold it harmless against and in respect of any and all claims, losses, expenses, obligations and liabilities (including costs of collection and reasonable attorney's fees) that arise or result from or are related to (i) the failure of any representation or warranty of Seller under this Agreement, or any agreement provided for by it, to be accurate or complete,
(ii) any liability or liabilities of Seller, whether known or unknown, accrued or contingent, not assumed by Buyer under Section 5.0, (iii) the failure of the Seller to perform any of its covenants under this Agreement or any Other Seller Instrument, (iv) the failure of any account debtor to pay in full the amount of any account receivable included in Seller's Accounts Receivable Certificate, as defined in Section 8.6, or any portion of any account receivable, within six months of shipment, provided that Buyer shall use its best efforts to collect all accounts receivable purchased from Seller, but that such best efforts shall not include instituting legal proceedings, and provided further that, if Seller indemnifies Buyer for any account receivable under this section or if Buyer invokes the provisions of Section 15.4 regarding any account receivable, Buyer shall assign to Seller all of Buyer's rights to such account.
15.3 Guaranty of Seller's Indemnity Obligation. The Guarantors, absolutely, unconditionally, jointly and severally as between themselves with Seller, guarantee the complete, full and prompt performance by Seller of its obligations to indemnify Buyer as provided in Section 15.2 above.
15.4 Set-Off. Notwithstanding any other provision of this Agreement, Buyer shall have the right to reduce any payment or payments otherwise owed to Seller or the Guarantors under this Agreement or any of the agreements executed in connection herewith by an amount or amounts equal to any or all of the claims, losses, expenses, obligations and liabilities (including costs of collection and reasonable attorney's fees) incurred by Buyer for which Seller has agreed to indemnify Buyer as provided in Section 15.2. Furthermore, Dennis M. Schreier and Robert F. Bauchiero shall forfeit all amounts that would otherwise be payable to them (regardless of whether any portion of such amount has accrued before the due date for payment) if the employment of either of them is terminated pursuant to Section 6.1 or 6.2 of their respective Employment Agreements before the due date of any Deferred Purchase Price Payment that would become payable under Section 3.5.5 of this Agreement; provided, however that neither Dennis M. Schreier nor Robert F. Bauchiero shall forfeit the right to receive a Deferred Purchase Price Payment because of termination of the employment of the other individual pursuant to Section 6.1 or 6.2 of the Employment Agreement between the Buyer and the other such individual.
15.5 Indemnification of Seller by Buyer. Buyer agrees to indemnify Seller and hold harmless against and in respect of any and all claims, losses, expenses, obligations and liabilities (including costs of collection and reasonable attorney's fees) that arise after the Closing Date and result from and are related to the Assumed Liabilities.
16. ENTIRE AGREEMENT, NOTICES, MODIFICATION, WAIVER, HEADINGS.
16.1 Entire Agreement. This Agreement constitutes the entire agreement between the parties pertaining to the subject matter it describes and supersedes all prior and contemporaneous agreements, understandings, negotiations and discussions, whether
oral or written, of the parties. No supplement, modification or waiver or termination of this Agreement shall be binding unless executed in writing by the party to be bound. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision (whether or not similar), nor shall such waiver constitute a continuing waiver unless otherwise expressly provided.
16.2 Notices. Any notice or other communication required or permitted under this Agreement shall be in writing, and shall be given by personal delivery, via facsimile transmission, by a nationally recognized overnight courier service or by registered or certified United States mail, postage prepaid, with return receipt requested. Notices shall be addressed to the parties as follows:
Seller: Bear Linear LLC Attn: Dennis M. Schreier 6593 Revlon Drive, Unit 1 Plant #1 Belvidere, IL 61008 Telephone: 815.547.1106 Telecopy: 815.547.7206 Copy to: Pearson Van Houten PLC Attn: Margaret Van Houten 1415 28th Street, Suite 160 West Des Moines, IA 50266 Telephone: 515.327.0101 Telecopy: 515.327.8514 Buyer: Altra Industrial Motion, Inc. Attn: David Wall 14 Hayward Street Quincy, MA 02171 Telephone: 617.689.6380 Telecopy: 617.689.6202 Copy to: Eric L. Brossman, Esquire Saul Ewing LLP 2 North 2nd Street, 7th Floor Harrisburg, PA 17101 Telephone: 717.257.7570 Telecopy: 717.237.7438 |
Any party hereto shall be entitled to specify a different address by giving notice to the other party.
16.3 Headings. Section and subsection headings are not to be considered part of this Agreement, are included solely for convenience and are not intended to be full or accurate descriptions of the content of any section or subsection.
16.4 Multiple Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed to be an original and all of which shall constitute one and the same agreement.
16.5 Amendment or Modification. The parties may amend or modify this Agreement in such manner as may be agreed upon by a written instrument executed by such parties.
16.6 Severability. If any term, covenant, condition or provision of this Agreement, or the application thereof to any circumstance, shall be invalid or unenforceable to any extent, the remaining terms, covenants, conditions and provisions shall not be adversely affected thereby, and each remaining term, covenant, condition and provision of this Agreement shall be valid and shall be enforceable to the fullest extent permitted by law. If any provision of this Agreement is so broad as to be unenforceable, such provision shall be interpreted to be only as broad as is enforceable.
16.7 Exhibits and Schedules. Exhibits, schedules and documents referred to in this Agreement are an integral part of this Agreement.
17. SUCCESSORS AND ASSIGNS. All of the terms and provisions of this Agreement shall be binding upon and shall inure to the benefit of the parties and their respective transferees, successors and assigns. Notwithstanding the foregoing sentence, this Agreement and the obligations of the Seller and the Guarantors hereunder shall not be assigned or delegated to any other person. Buyer reserves the right, and is hereby authorized, to assign all of its right, title and interest herein and hereunder to an affiliate or person under common control with Buyer.
18. GOVERNING LAW. The parties agree that this Agreement shall be governed by the laws of the State of Illinois.
19. CONSENT TO JURISDICTION. The parties hereby consent to the jurisdiction of the state courts of the State of Illinois and the United States District Court for the Northern District of Illinois (Western Division). With respect to any such court action, all of the parties to this Agreement (a) submit to the personal jurisdiction of such courts; (b) consent to service of process, and (c) waive any other requirement (whether imposed by statute, rule of court, or otherwise) with respect to personal jurisdiction or service of process.
The parties have executed this Agreement or, acting under authority given by their respective Board of Managers, have caused this Agreement to be executed in their respective entity names by their respective Presidents or Vice Presidents, all as of the date and year first set forth above.
SELLER: ATTEST: BEAR LINEAR LLC By ------------------------------------- ------------------------------------- Title: --------------------------------- WITNESS: GUARANTORS: (SEAL) ------------------------------------- ---------------------------------------- Dennis M. Schreier (SEAL) ------------------------------------- ---------------------------------------- Robert F. Bauchiero (SEAL) ------------------------------------- ---------------------------------------- J. Chris Arvidson BUYER: ATTEST: WARNER ELECTRIC, LLC By ------------------------------------- ------------------------------------- Title: --------------------------------- |
List of Schedules
Schedule 1.2 Purchased Assets Schedule 2.0 Retained Assets Schedule 3.3 Allocation of Purchase Price Exhibit 4.0 Acquisition Notes Schedule 5.0 Assumed Liabilities Schedule 7.1.1 Organization and Standing of Seller Schedule 7.1.4 Assumed and Fictitious Names Schedule 7.2.2 Absence of Certain Changes Schedule 7.2.3 Undisclosed Liabilities Schedule 7.2.4 Indebtedness to and from Officers, Directors and Others Schedule 7.2.5 Backlog Schedule 7.3.1 Inventory Schedule 7.3.2 Machinery, Equipment and Other Tangible Personal Property Schedule 7.3.3 Accounts Receivable Schedule 7.3.4 Real Property Schedule 7.3.5 Patents, Copyrights, Trademarks, Etc. Schedule 7.4.1 Labor and Employment Contracts Schedule 7.4.2 Employee Benefit Plans and Arrangements Schedule 7.4.3 Insurance Schedule 7.4.4 Other Contracts and Agreements Schedule 7.4.5 Third Party Consents Schedule 7.5.1 Customers Schedule 7.5.2 Suppliers Schedule 7.5.3 Employees Schedule 7.5.4 Accrued Employee Benefits Schedule 7.5.5 Product and Field Warranties Schedule 7.5.6 Litigation Schedule 7.5.7 Taxes Schedule 7.5.8 Permits; Governmental Approvals Schedule 7.5.9 Operations in Conformity with Law Schedule 7.5.10 Environmental Matters Schedule 7.5.11 Absence of Certain Business Transactions Schedule 8.6 Accounts Receivable Certificate Schedule 12.2.7 Pending and Threatened Litigation Exhibit 12.3 Employment and Non-Competition Agreement(s) |
LIST OF DEFINED TERMS
"ACQUIRED BUSINESS" shall mean the Purchased Assets, the Business and the Assumed Liabilities.
"ADJUSTED CLOSING BALANCE SHEET" shall have the meaning set forth in Section 3.2 of the Agreement.
"ADJUSTED NET ASSET VALUE AT CLOSING" shall have the meaning set forth in
Section 3.2 of the Agreement.
"AGREEMENT" shall mean the Asset Purchase Agreement dated as of May 18, 2006.
"ANNUAL EBITDA EXCESS" shall have the meaning set forth in Section 3.5.2 of the Agreement.
"ANNUAL MINIMUM DEFERRED PURCHASE PRICE PAYMENT" shall have the meaning set forth in Section 3.5.1 of the Agreement.
"ANNUAL PAYMENT RATE" shall have the meaning set forth in Section 3.5.2 of the Agreement.
"ASSUMED LIABILITIES" shall have the meaning set forth in Section 5 of the Agreement.
"BEAR LINEAR" shall mean Bear Linear LLC, an Illinois limited liability company.
"BUSINESS" shall have the meaning set forth in Section 1.1 of the Agreement.
"BUYER" shall mean Warner Electric, LLC, a Delaware limited liability company.
"CLOSING BALANCE SHEET" shall have the meaning set forth in Section 3 of the Agreement.
"CLOSING DATE" or "CLOSING" shall have the meaning set forth in Section 11.1 of the Agreement.
"CODE" shall have the meaning set forth in Section 7.4.2 of the Agreement.
"CONTINGENT DEFERRED PURCHASE PRICE PAYMENTS" shall have the meaning set forth in Section 3.5.2 of the Agreement.
"CONTRACTS" shall have the meaning set forth in Section 7.4.4 of the Agreement.
"DEFERRED PURCHASE PRICE PAYMENTS" shall mean the Minimum Deferred Purchase Price Payments and the Contingent Deferred Purchase Price Payments as such terms are defined in Section 3.5.1 and 3.5.2 of the Agreement.
"EBITDA" shall mean the Buyer's operating income less operating expenses (but excluding
interest, taxes, depreciation and amortization).
"EBITDA Base Amount" shall have the meaning set forth in Section 3.5.2 of the Agreement.
"EMPLOYEE PLANS" shall have the meaning set forth in Section 7.4.2 of the Agreement.
"EMPLOYMENT AGREEMENT(S)" shall have the meaning set forth in Section 12.3 of the Agreement.
"ENVIRONMENTAL LAWS" shall have the meaning set forth in Section 7.5.10 of the Agreement.
"GAAP" shall mean generally accepted accounting principles for financial reporting in the United States applied on a consistent basis.
"GUARANTORS" shall mean Dennis M. Schreier, Robert F. Bauchiero and J. Chris Arvidson.
"MAXIMUM ANNUAL EBITDA EXCESS" shall have the meaning set forth in Section 3.5.3 of the Agreement.
"MINIMUM DEFERRED PURCHASE PRICE PAYMENT" shall have the meaning set forth in
Section 3.5.1 of the Agreement.
"OTHER BUYER INSTRUMENTS" shall have the meaning set forth in Section 9.2 of the Agreement.
"OTHER SELLER INSTRUMENTS" shall have the meaning set forth in Section 7.1.2 of the Agreement.
"PURCHASE PRICE" shall have the meaning set forth in Section 3.1 of the Agreement.
"PURCHASED ASSETS" shall have the meaning set forth in Section 1.2 of the Agreement.
"REGULATED SUBSTANCE" shall have the meaning set forth in Section 7.5.10 of the Agreement.
"RETAINED ASSETS" shall have the meaning set forth in Section 2 of the Agreement.
"RETAINED LIABILITIES" shall have the meaning set forth in Section 5 of the Agreement.
"SELLER" shall mean Bear Linear.
"WORKING CAPITAL" shall have the meaning set forth in Section 3.4.3 of the Agreement.
"WORKING CAPITAL CERTIFICATE" shall have the meaning set forth in Section 3.4.2 of the Agreement.
EXHIBIT 4.1
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
This Amended and Restated Registration Rights Agreement (this "AGREEMENT") is made and entered into as of January 6, 2005, by and among Altra Holdings, Inc., a Delaware corporation (the "COMPANY"), Genstar Capital Partners III, L.P., a Delaware limited partnership ("GENSTAR"), Stargen III, L.P., a Delaware limited partnership ("STARGEN"), Caisse de depot et Placement du Quebec ("CDPQ"), and each of the other persons listed on the signature pages hereto.
RECITALS
WHEREAS, on November 30, 2004, the Company, Genstar, Stargen, CDPQ and certain of the Holders (as defined herein) entered into a Subscription Agreement (the "SUBSCRIPTION AGREEMENT"), pursuant to which the Company agreed to issue and sell, and Genstar, Stargen, CDPQ and such Holders agreed to purchase, shares of the Company's Series A Preferred Stock;
WHEREAS, on or about the date hereof, certain of the Holders (the "NEW HOLDERS") are purchasing from Genstar and Stargen certain shares of the Company's Series A Preferred Stock pursuant to a Stock Purchase Agreement, dated as of the date hereof (the "STOCK PURCHASE AGREEMENT"), among the New Holders, Genstar and Stargen;
WHEREAS, the Company, Genstar, Stargen, CDPQ and certain of the Holders had previously entered into that certain Registration Rights Agreement, dated as of November 30, 2004 (the "PRIOR AGREEMENT"); and
WHEREAS, the Company desires to amend and restate the Prior Agreement to add the New Holders and to provide the Holders with certain rights to register shares of the Company's Common Stock (including shares of Common Stock issuable upon conversion of shares of the Company's Series A Preferred Stock), as set forth in this Agreement.
AGREEMENT
NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein, the parties hereto agree as follows:
1. Definitions.
As used in this Agreement, the following capitalized terms shall have the following meanings:
"AFFILIATE" means, with respect to a specified Person, any other Person, directly or indirectly controlling, controlled by or under common control with such specified Person. For purposes of this definition, the term "control," including the terms "controlling," "controlled by" and "under common control," means the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of a Person, whether through ownership of voting securities or otherwise.
"BOARD" means the board of directors of the Company.
"COMMON STOCK" means the Common Stock, par value $0.001 per share, of the Company.
"DEMAND NOTICE" is defined in Section 3(a) hereof.
"DEMAND REGISTRATION" is defined in Section 3(a) hereof.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended from time to time.
"GENSTAR HOLDERS" means each of Genstar and Stargen and any Affiliate thereof that holds Registrable Securities.
"HOLDER" means any party hereto (other than the Company) and any holder of Registrable Securities who agrees in writing to be bound by the provisions of this Agreement, including by executing and delivering a counterpart signature page to this Agreement.
"NASD" means the National Association of Securities Dealers, Inc.
"PERSON" means an individual, partnership, limited liability company, joint venture, corporation, trust or unincorporated organization, a government or any department, agency or political subdivision thereof or other entity.
"PIGGYBACK NOTICE" is defined in Section 4(a) hereof.
"PIGGYBACK REGISTRATION" means a registration pursuant to Section 4 hereof.
"PROSPECTUS" means the prospectus included in any Registration Statement, as amended or supplemented by any prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement and by all other amendments and supplements to the prospectus, including post-effective amendments and all material incorporated by reference in such prospectus.
"PUBLIC OFFERING" means the issuance and sale of shares of Common Stock to the public pursuant to a registration statement under the Securities Act which has been declared effective by the SEC (other than a registration statement on Form S-4, Form S-8 or any other similar form).
"QUALIFIED PUBLIC OFFERING" means a Public Offering (which may be the initial Public Offering) having an aggregate offering value of at least $50,000,000.
"REGISTRABLE SECURITIES" means shares of Common Stock issued or issuable upon conversion of shares of Series A Preferred Stock and any securities of the Company which may
be issued or distributed with respect to, or in exchange or substitution for, or conversion of, such Common Stock and such other securities pursuant to a stock dividend, stock split or other distribution, merger, consolidation, recapitalization or reclassification or otherwise; provided, however, that any Registrable Securities shall cease to be Registrable Securities when (x) a Registration Statement with respect to the sale of such Registrable Securities has been declared effective under the Securities Act and such Registrable Securities have been disposed of in accordance with the plan of distribution set forth in such Registration Statement, (y) such Registrable Securities are distributed pursuant to Rule 144 (or any similar provision then in force) under the Securities Act or (z) such Registrable Securities shall have been otherwise transferred to a Person other than a Holder and new certificates for them not required to bear a legend restricting further transfer under the Securities Act shall have been delivered by the Company; and provided, further, that any securities that have ceased to be Registrable Securities cannot thereafter become Registrable Securities and any security that is issued or distributed in respect of securities that have ceased to be Registrable Securities is not a Registrable Security.
"REGISTRATION" means a Demand Registration or a Piggyback Registration.
"REGISTRATION EXPENSES" means all expenses incident to the Company's
performance of or compliance with this Agreement, including without limitation
(i) all registration and filing fees, and any other fees and expenses associated
with filings required to be made with any stock exchange, the SEC and the NASD
(including, if applicable, the fees and expenses of any "qualified independent
underwriter" and its counsel as may be required by the rules and regulations of
the NASD), (ii) all fees and expenses of compliance with state securities or
blue sky laws (including fees and disbursements of counsel for the underwriters
or selling Holders in connection with blue sky qualifications of the Registrable
Securities and determination of their eligibility for investment under the laws
of such jurisdictions as the managing underwriters or the majority of the
Holders of the Registrable Securities being sold may designate), (iii) all
printing and related messenger and delivery expenses (including expenses of
printing certificates for the Registrable Securities in a form eligible for
deposit with The Depository Trust Company and of printing prospectuses), (iv)
all fees and disbursements of counsel for the Company and of all independent
certified public accountants of the Company (including the expenses of any
special audit and cold comfort letters required by or incident to such
performance), (v) Securities Act liability insurance if the Company so desires
or the underwriters so require, (vi) all fees and expenses incurred in
connection with the listing of the Registrable Securities on any securities
exchange and all rating agency fees, (vii) all reasonable fees and disbursements
of one counsel selected by the Holders of the Registrable Securities being
registered to represent such Holders in connection with such registration,
(viii) all fees and disbursements of underwriters customarily paid by the
issuers or sellers of securities, excluding underwriting discounts and
commissions and transfer taxes, if any, and fees and disbursements of counsel to
underwriters (other than such fees and disbursements incurred in connection with
any registration or qualification of Registrable Securities under the securities
or blue sky laws of any state), and (ix) fees and expenses of other Persons
retained by the Company in connection with the Registration.
"REGISTRATION STATEMENT" means any registration statement of the Company which covers any of the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such Registration Statement,
including post-effective amendments, all exhibits and all material incorporated by reference in such Registration Statement.
"REQUESTING HOLDER" is defined in Section 3(a) hereof.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time to time.
"SERIES A PREFERRED STOCK" means the Series A Preferred Stock, par value $0.001 per share, of the Company.
"UNDERWRITTEN REGISTRATION" or "UNDERWRITTEN OFFERING" means a sale of
securities of the Company to an underwriter for re-offering to the public.
2. Securities Subject to this Agreement.
(a) Registrable Securities. The securities entitled to the benefits of this Agreement are the Registrable Securities.
(b) Holders of Registrable Securities. A Person is deemed to be a Holder of Registrable Securities whenever such Person owns Registrable Securities or has the right to acquire such Registrable Securities, whether or not such acquisition has actually been effected and disregarding any legal restrictions upon the exercise of such right.
3. Demand Registration.
(a) Right to Demand; Demand Notices. Subject to the provisions of this
Section 3, at any time and from time to time commencing after the first
anniversary of the date hereof, one or more Genstar Holders holding a majority
of all Registrable Securities held by all Genstar Holders (collectively a
"REQUESTING HOLDER") may make a written request to the Company for registration
under and in accordance with the Securities Act (which request may require that
such registration be underwritten) of all or part of the Registrable Securities
held by it (a "DEMAND REGISTRATION"). Promptly upon receipt of any such request
from any Requesting Holder (but in no event more than ten (10) business days
thereafter), the Company will serve written notice (the "DEMAND NOTICE") of such
registration request to all Holders who did not make such written request, and,
subject to the terms of this Agreement, the Company will include in such Demand
Registration all Registrable Securities of any Holder with respect to which the
Company has received written requests for inclusion therein within ten (10)
business days after the Demand Notice has been given to the applicable Holder.
All requests made pursuant to this Section 3 will specify the aggregate amount
of Registrable Securities to be registered and will also specify the intended
methods of disposition thereof.
(b) Company's Right to Defer Registration. If the Company is requested to effect a Demand Registration and the Company furnishes to the Holders requesting such Demand Registration a copy of a resolution of the Board certified by the secretary of the Company stating that in the good faith judgment of the Board it would be seriously detrimental
to the Company and its stockholders for such registration statement to be filed and it is therefore essential to defer the filing of such registration statement, the Company shall have the right to defer such filing for a period of not more than ninety (90) days after receipt of the request for such registration from the Requesting Holder; provided that, in such event, the Company may postpone a Demand Registration pursuant hereto only twice in any 365-day period. If the Company shall so postpone the filing of a Demand Registration and if the Requesting Holder within thirty (30) days after receipt of the notice of postponement advises the Company in writing that the Requesting Holder has determined to withdraw such request for registration, then such Demand Registration shall be deemed to be withdrawn and such request shall be deemed not to have been exercised for purposes of determining whether the Requesting Holder included in such Demand Registration is required to pay its pro rata portion of the Registration Expenses pursuant to Section 3(d) hereof and the Company shall pay all Registration Expenses in connection with such Demand Registration.
(c) Registration Statement Form. Registrations under this Section 3 shall be on such appropriate registration form of the SEC (i) as shall be selected by the Company and as shall be reasonably acceptable to the Requesting Holder and (ii) as shall permit the disposition of such Registrable Securities in accordance with the intended method or methods of disposition specified in the Requesting Holder's request for such registration. If, in connection with any registration under this Section 3 which is proposed by the Company to be on Form S-3 or any successor form to such Form, the managing underwriter, if any, shall advise the Company in writing that in its opinion the use of another permitted form is of material importance to the success of the offering, then such registration shall be on such other permitted form.
(d) Expenses. All Registration Expenses in connection with the first
two (2) Demand Registrations of Registrable Securities effected pursuant to this
Section 3 shall be borne by the Company, regardless of whether the Registration
Statement becomes effective (except as provided in Section 3(e) hereof). All
expenses for any subsequent Demand Registrations of Registrable Securities
pursuant to this Section 3 shall be paid pro rata by the Company and all other
Persons participating in such Demand Registration on the basis of the relative
number of shares of Common Stock of each such Person included in such
registration. The Company will, in any event, pay its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any audit and
the fees and expenses of any Person, including special experts, retained by the
Company.
(e) Effective Registration Statement. The Company shall be deemed to have effected a Demand Registration if (i) the Registration Statement relating to such Demand Registration is declared effective by the SEC; provided, however, that no Demand Registration shall be deemed to have been effected if (x) such registration, after it has become effective, is interfered with by any stop order, injunction or other order or requirement of the SEC or other governmental agency or court by reason of an act or omission by the Company, or (y) the conditions to closing specified in the purchase agreement or underwriting agreement entered into in connection with such registration are not satisfied because of an act or omission by the Company, or (ii) at any time after any Requesting Holder requests a Demand Registration and prior to the effectiveness of the Registration Statement, the preparation of such Registration Statement is discontinued or such Registration Statement is withdrawn or abandoned at the
request of such Requesting Holder, unless the Requesting Holder has paid to the Company in full the Registration Expenses in connection with such Registration Statement.
(f) Priority on Demand Registrations. Notwithstanding the foregoing, if a Registration pursuant to this Section 3 involves an Underwritten Offering and the managing underwriter or underwriters of such proposed Underwritten Offering determines in writing that the total or kind of securities which such Holders and any other persons or entities intend to include in such offering would be reasonably likely to adversely affect the price, marketability or distribution of the securities offered in such offering, then the Company shall include in such Registration (i) first, to the extent of the amount of securities that all Holders have requested to be included in such Registration, which, in the opinion of the managing underwriter or underwriters, can be sold without such adverse effect referred to above, such amount to be allocated pro rata among all such Holders based upon the relative aggregate amount of gross proceeds to be received by such Holders in the offering and (ii) second, the securities of any other Person, which, in the opinion of the managing underwriter or underwriters, can be sold without such adverse effect referred to above.
(g) Selection of Underwriters. If any offering pursuant to a Demand Registration involves an Underwritten Offering, the Holders of a majority of the Registrable Securities included in such Demand Registration shall have the right to select the managing underwriter or underwriters to administer the offering, which managing underwriters shall be a firm of nationally recognized standing and reasonably satisfactory to the Company.
(h) Form S-3 Registration Statement. In case the Company shall receive from any Requesting Holder a written request or requests that the Company effect a registration on Form S-3 or any successor form to such Form and any related qualification or compliance with respect to all or a part of the Registrable Securities held by such Requesting Holder, the Company will:
(i) promptly give written notice of the proposed registration, and any related qualification or compliance, to all other Holders; and
(ii) as soon as practicable, effect such registration and all
such qualifications and compliances as may be so requested and as would permit
or facilitate the sale and distribution of all or such portion of such
Requesting Holder's Registrable Securities as are specified in such request,
together with all or such portion of the Registrable Securities of any other
Holder or Holders joining in such request as are specified in a written request
given within ten (10) business days after receipt of such written notice from
the Company; provided, however, that the Company shall not be obligated to
effect any such registration, qualification or compliance, pursuant to this
Section 3(h): (A) if Form S-3 or any successor form to such Form is not
available for such offering; or (B) if the Company shall furnish to the Holders
requesting such registration no later than ten (10) business days after such
request a copy of a resolution of the Board certified by the secretary of the
Company stating that in the good faith judgment of the Board such registration
statement would materially interfere with any pending material financing,
acquisition or corporate reorganization or other material corporate development
involving the Company or any of its subsidiaries or would require premature
disclosure thereof, in which event the Company shall have the right to defer the
filing of the Form S-3 registration
statement for a period of not more than ninety (90) days after receipt of the request of the Requesting Holder under this Section 3(h).
(iii) The Company will pay all Registration Expenses in connection with a registration under this Section 3(h).
(i) Other Registration Rights. Except as provided in this Agreement, the Company shall not grant to any Persons the right to request the Company to register any equity securities of the Company, or any securities convertible or exchangeable into or exercisable for such securities, without the prior written consent of Genstar.
4. Piggyback Registrations.
(a) Participation. Subject to Sections 4(b) and 10 hereof, if at any time after the date hereof the Company files a Registration Statement (other than (w) a registration on Form S-4 or S-8 or any successor form to such Forms or any similar form, (x) any registration of securities as it relates to an offering and sale to management of the Company pursuant to any employee stock plan or other employee benefit plan arrangement, (y) any registration as it relates to the registration for exchange or otherwise of debt securities of the Company or its Subsidiaries or (z) subject to the proviso below, a registration which is the Company's initial Public Offering of securities) with respect to an offering that includes any shares of Common Stock, then the Company shall give prompt notice (the "PIGGYBACK NOTICE") to the Holders, and the Holders shall be entitled to include in such Registration Statement the Registrable Securities held by them. The Piggyback Notice shall offer the Holders the opportunity to register such number of shares of Registrable Securities as each Holder may request and shall set forth (i) the anticipated filing date of such Registration Statement and (ii) the number of shares of Common Stock that is proposed to be included in such Registration Statement. Subject to Section 4(b), the Company shall include in such Registration Statement such shares of Registrable Securities for which it has received written requests to register such shares within fifteen (15) days after the Piggyback Notice has been given.
(b) Underwriter's Cutback. Notwithstanding the foregoing, if a Registration pursuant to this Section 4 involves an Underwritten Offering and the managing underwriter or underwriters of such proposed Underwritten Offering determines that the total or kind of securities which the Holders and any other persons or entities intend to include in such offering would be reasonably likely to adversely affect the price, marketability or distribution of the securities offered in such offering, then the Company shall include in such Registration (i) first, 100% of the securities that the Company (if the Person initiating such Registration is the Company) proposes to sell and (ii) second, to the extent of the amount of securities which all Holders have requested to be included in such Registration, which, in the opinion of the managing underwriter or underwriters, can be sold without such adverse effect referred to above, such amount to be allocated pro rata among all such Holders based upon the relative aggregate amount of gross proceeds to be received by such Holders in the offering, which, in the opinion of the managing underwriter or underwriters, can be sold without such adverse effect referred to above and (iii) third, the securities of any other Person, which, in the opinion of the managing underwriter or underwriters, can be sold without such adverse effect referred to above.
(c) Expenses. The Company will pay all Registration Expenses in connection with each registration of Registrable Securities requested pursuant to this Section 4, regardless of whether any such registration becomes effective.
(d) Company Control. Other than with respect to a Demand Request pursuant to Section 3 hereof, the Company may decline to file a Registration Statement to be prepared and filed by the Company after giving the Piggyback Notice, or withdraw such a Registration Statement after filing, but prior to the effectiveness of the Registration Statement, provided that the Company shall promptly notify each Holder in writing of any such action and provided further that the Company shall bear all reasonable expenses incurred by such Holder or otherwise in connection with such withdrawn Registration Statement.
(e) No Effect on Demand Registrations. No registration effected under this Section 4 shall be deemed to have been effected pursuant to Section 3 hereof or shall relieve the Company of its obligation to effect any registration upon request under Section 3 hereof.
5. Hold-Back and Other Agreements.
(a) Restrictions on Public Sale by Holder of Registrable Securities. Each Holder agrees, if so requested by any managing underwriter in an Underwritten Offering, not to sell, make any short sale of, grant any option for the purchase of, hypothecate, hedge or otherwise dispose of, securities of the Company or any securities convertible into or exchangeable or exercisable for such securities, including a sale pursuant to Rule 144 under the Securities Act (except as part of such Underwritten Registration), during the thirty (30) day period prior to, and during the ninety day period (or such longer period of up to 180 days, subject to research and analyst reporting "blackout" extensions, as may be required by such underwriter) beginning on, the effective date of such Registration Statement (except as part of such Registration) or the commencement of the public distribution of securities, to the extent timely notified in writing by the Company or any managing underwriter; provided, however that the foregoing restrictions shall only be applicable to CDPQ and its Affiliates to the same extent that the Genstar Holders are also subject to such restrictions.
(b) Restrictions on Public Sale by the Company and Others. The Company agrees not to effect any public sale or distribution of any securities the same as or similar to those being registered by the Company, or any securities convertible into or exchangeable or exercisable for such securities, during the thirty (30) day period prior to, and during the 90-day period (or such longer period of up to 180 days, subject to research analyst reporting "blackout" extension, as may be required by such underwriter) beginning with, the effective date of a Registration Statement filed under Sections 3 and 4 hereof or the commencement of the public distribution of securities to the extent timely notified in writing by a Holder or the managing underwriters (except as part of such registration, if permitted, or pursuant to registrations on Forms S-4 or S-8 or any successor form to such Forms or any similar form, or any registration of securities for offering and sale to management of the Company pursuant to any employee stock plan or other employee benefit plan arrangement). The Company agrees to use reasonable efforts to obtain from each Holder the same as or similar to those being registered by the Company, or any securities convertible into or exchangeable or exercisable for any of such securities, an agreement not to sell, make any short sale of, grant any option for the purchase of,
or otherwise dispose of such securities (other than securities purchased in a Public Offering) during such period, except as part of any such registration if permitted.
(c) No Inconsistent Agreements. The Company will not enter into any agreement with respect to its securities which is inconsistent with, or which is reasonably likely to impair, the rights granted to the Holders by this Agreement.
6. Registration Procedures.
In connection with the Company's Registration obligations pursuant to Sections 3 and 4 hereof, the Company will use its reasonable best efforts to effect such Registration to permit the sale of such Registrable Securities in accordance with the intended method or methods of distribution thereof, and pursuant thereto the Company will as expeditiously as possible:
(a) prepare and file with the SEC a Registration Statement or Registration Statements relating to the applicable Demand Registration or Piggyback Registration including all exhibits and financial statements required by the SEC to be filed therewith, and use its reasonable best efforts to cause such Registration Statement to become effective; provided, that the Company will furnish copies of any amendments or supplements in the form filed with respect to any Piggyback Registration, simultaneously with the filing of such amendments or supplements;
(b) prepare and file with the SEC such amendments and post-effective amendments to the Registration Statement as may be necessary to keep the Registration Statement effective for a period of not less than 180 days (or such shorter period which will terminate when all Registrable Securities covered by such Registration Statement have been sold or withdrawn), or, if such Registration Statement relates to an Underwritten Offering, such longer period as in the opinion of counsel for the underwriters a Prospectus is required by law to be delivered in connection with sales of Registrable Securities by an underwriter or dealer; cause the Prospectus to be supplemented by any required Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the Securities Act; and comply with the provisions of the Securities Act, the Exchange Act, and the rules and regulations promulgated thereunder with respect to the disposition of all securities covered by such Registration Statement during the applicable period in accordance with the intended method or methods of distribution by the sellers thereof set forth in such Registration Statement or supplement to the Prospectus;
(c) notify the selling Holders and the managing underwriters, if any, and (if requested) confirm such advice in writing, as soon as practicable (but in any event within two (2) business days) after notice thereof is received by the Company (i) when the Registration Statement or any amendment thereto has been filed or becomes effective, the Prospectus or any amendment or supplement to the Prospectus has been filed, and, to furnish such selling Holders and managing underwriters with copies thereof, (ii) of any request by the SEC for amendments or supplements to the Registration Statement or the Prospectus or for additional information, (iii) of the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement or any order preventing or suspending the use of any preliminary Prospectus or Prospectus or the initiation or threatening of any proceedings for such purposes, (iv) if at any
time the representations and warranties of the Company contemplated by paragraph
(m) below cease to be true and correct and (v) of the receipt by the Company of
any notification with respect to the suspension of the qualification of the
Registrable Securities for offering or sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose;
(d) promptly notify the selling Holders and the managing underwriters, if any, at any time prior to nine (9) months after the time of issue of the Prospectus, when the Company becomes aware of the happening of any event as a result of which the Prospectus included in such Registration Statement (as then in effect) contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein (in the case of the Prospectus and any preliminary Prospectus, in light of the circumstances under which they were made) when such Prospectus was delivered not misleading or, if for any other reason it shall be necessary during such time period to amend or supplement the Prospectus in order to comply with the Securities Act and, in either case as promptly as practicable thereafter, prepare and file with the SEC, and furnish without charge to the selling Holders and the managing underwriters, if any, a supplement or amendment to such Prospectus which will correct such statement or omission or effect such compliance;
(e) make every reasonable effort to obtain the withdrawal of any stop order or other order suspending the use of any preliminary Prospectus or Prospectus or suspending any qualification of the Registrable Securities;
(f) if requested by the managing underwriter or underwriters or a Holder of Registrable Securities being sold in connection with an Underwritten Offering, promptly incorporate in a Prospectus supplement or post-effective amendment such information as the managing underwriters and the Holders of a majority of the Registrable Securities being sold agree should be included therein relating to the plan of distribution with respect to such Registrable Securities, including, without limitation, information with respect to the amount of Registrable Securities being sold to such underwriters, the purchase price being paid therefor by such underwriters and with respect to any other terms of the Underwritten (or best efforts underwritten) Offering of the Registrable Securities to be sold in such offering; and make all required filings of such Prospectus supplement or post-effective amendment as soon as notified of the matters to be incorporated in such Prospectus supplement or post-effective amendment;
(g) furnish to each selling Holder and each managing underwriter, without charge, as many conformed copies as they may reasonably request, of the Registration Statement and any post-effective amendment thereto, including financial statements and schedules, all documents incorporated therein by reference and all exhibits thereto (including those incorporated by reference);
(h) deliver to each selling Holder and the underwriters, if any, without charge, as many copies of the Prospectus (including each preliminary Prospectus) and any amendment or supplement thereto as such Persons may reasonably request (it being understood that the Company consents to the use of the Prospectus or any amendment or supplement thereto by each of the selling Holders and the underwriters, if any, in connection with the offering and sale of the Registrable Securities covered by the Prospectus or any amendment or supplement thereto) and
such other documents as such selling Holder may reasonably request in order to facilitate the disposition of the Registrable Securities by such Holder;
(i) on or prior to the date on which the Registration Statement is declared effective, use its reasonable best efforts to register or qualify, and cooperate with the selling Holders, the managing underwriter or agent, if any, and their respective counsel in connection with the registration or qualification of such Registrable Securities for offer and sale under the securities or blue sky laws of each state and other jurisdiction of the United States as any such seller, underwriter or agent reasonably requests in writing and do any and all other acts or things reasonably necessary or advisable to keep such registration or qualification in effect for so long as such Registration Statement remains in effect and so as to permit the continuance of sales and dealings therein for as long as may be necessary to complete the distribution of the Registrable Securities covered by the Registration Statement; provided that the Company will not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or to take any action which would subject it to general service of process in any such jurisdiction where it is not then so subject;
(j) cooperate with the selling Holders and the managing underwriter or agent, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not required to bear any restrictive legends; and enable such Registrable Securities to be in such denominations and registered in such names as the managing underwriters may request at least two (2) business days prior to any sale of Registrable Securities to the underwriters;
(k) use its reasonable best efforts to cause the Registrable Securities covered by the applicable Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary, including under Blue Sky laws of such jurisdictions as shall be reasonably requested by the Holders, to enable the seller or sellers thereof or the underwriters, if any, to consummate the disposition of such Registrable Securities;
(l) not later than the effective date of the applicable Registration, provide a CUSIP number for all Registrable Securities and provide the applicable trustee or transfer agent with printed certificates for the Registrable Securities which are in a form eligible for deposit with The Depository Trust Company;
(m) make such representations and warranties to the Holders of Registrable Securities being registered, and the underwriters or agents, if any, in form, substance and scope as are customarily made by issuers in primary underwritten public offerings;
(n) enter into such customary agreements (including an underwriting agreement) and take all such other actions as the majority of the Holders of any Registrable Securities being sold or the managing underwriter or agent, if any, reasonably request in order to expedite or facilitate the Registration and disposition of such Registrable Securities;
(o) obtain for delivery to the Holders of Registrable Securities being registered and to the underwriter or agent an opinion or opinions from counsel for the Company, upon consummation of the sale of such Registrable Securities to the underwriters (the "CLOSING
DATE") in customary form and in form, substance and scope reasonably satisfactory to such Holders, underwriters or agents and their counsel;
(p) obtain for delivery to the Company and the underwriter or agent, with copies to the Holders, a cold comfort letter from the Company's independent public accountants in customary form and covering such matters of the type customarily covered by cold comfort letters as the managing underwriter or the Holders of a majority of the Registrable Securities being sold reasonably request, dated the effective date of the Registration Statement and brought down to the Closing Date;
(q) cooperate with each seller of Registrable Securities and each underwriter or agent participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with the NASD;
(r) make available for inspection by a representative of the Holders of a majority of the Registrable Securities, any underwriter participating in any disposition pursuant to such Registration, and any attorney or accountant retained by such Holders or underwriter, all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company's officers, directors and employees to supply all information reasonably requested by any such representative, underwriter, attorney or accountant in connection with such Registration; provided that any records, information or documents that are designated by the Company as confidential shall be kept confidential by such Persons unless disclosure of such records, information or documents is required by law;
(s) use its reasonable best efforts to comply with all applicable
rules and regulations of the SEC and make generally available to its
securityholders, as soon as reasonably practicable (but not more than eighteen
(18) months) after the effective date of the Registration Statement, an earnings
statement satisfying the provisions of Section 11(a) of the Securities Act and
the rules and regulations promulgated thereunder;
(t) as promptly as practicable after filing with the SEC of any document which is incorporated by reference into the Registration Statement or the Prospectus, provide copies of such document to counsel for the selling Holders and to the managing underwriters, if any;
(u) provide and cause to be maintained a transfer agent and registrar for all Registrable Securities covered by such Registration Statement from and after a date not later than the effective date of such Registration Statement; and
(v) use its reasonable best efforts to list (if such Registrable Securities are not already listed) all Registrable Securities covered by such Registration Statement on The New York Stock Exchange or the American Stock Exchange or to cause such Registrable Securities to be included for quotation on the Nasdaq National Market.
The Company may require each Holder of Registrable Securities as to which any Registration is being effected to furnish to the Company such information regarding the distribution of such securities and such other information relating to such Holder and its ownership of Registrable Securities as the Company may from time to time reasonably request in
writing. Each Holder agrees to furnish such information to the Company and to cooperate with the Company as necessary to enable the Company to comply with the provisions of this Agreement.
Each Holder agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 6(c)(iv) or (v) or Section 6(d) hereof, such Holder will forthwith discontinue disposition of Registrable Securities pursuant to such Registration Statement until such Holder's receipt of the copies of the supplemented or amended Prospectus contemplated by Section 6(d) hereof, or until it is advised in writing by the Company that the use of the Prospectus may be resumed, and has received copies of any additional or supplemental filings which are incorporated by reference in the Prospectus, and, if so directed by the Company, such Holder will deliver to the Company (at the Company's expense) all copies, other than permanent file copies then in such Holder's possession, of the Prospectus covering such Registrable Securities current at the time of receipt of such notice.
7. Indemnification.
(a) Indemnification by Company. The Company agrees to indemnify and hold harmless, to the full extent permitted by law, each Holder, its officers, directors, partners, members, employees and agents and each Person who controls such Holder (within the meaning of the Securities Act), and the officers, directors, partners, members, employees and agents of each such controlling Person against all losses, claims, damages, liabilities and expenses (including, without limitation, reasonable attorneys' fees) caused by any untrue or alleged untrue statement of a material fact contained in any Registration Statement, Prospectus, amendment or supplement thereto or preliminary Prospectus or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same are caused by or contained in any information furnished in writing to the Company by such Holder expressly for use therein, or any violation by the Company of any federal, state or common law rule or regulation applicable to the Company relating to the action required of, or inaction by, the Company in connection with any such registration. The Company will also indemnify underwriters, selling brokers, dealer managers and similar securities industry professionals participating in the distribution, their officers and directors and each Person who controls such Persons (within the meaning of the Securities Act) to the same extent as provided above with respect to the indemnification of the Holders, if requested. Each indemnity and reimbursement of costs and expenses shall remain in full force and effect regardless of any investigation made by or on behalf of such Holder.
(b) Indemnification by Selling Holder. In connection with each Registration, each selling Holder will furnish to the Company in writing such information and affidavits as the Company reasonably requests for use in connection with any Registration Statement or Prospectus and agrees to indemnify (severally and not jointly) and hold harmless, to the full extent permitted by law, the Company, its directors, officers, employees and agents and each Person who controls the Company (within the meaning of the Securities Act) against any losses, claims, damages or liabilities and expenses resulting from any untrue statement of a material fact or any omission of a material fact required to be stated in the Registration Statement or Prospectus or preliminary Prospectus or necessary to make the statements therein not misleading, to the extent, but only to the extent, that such untrue statement or omission is contained in any
information or affidavit so furnished in writing by such selling Holder to the Company specifically for inclusion in such Registration Statement or Prospectus and has not been corrected in a subsequent writing prior to or concurrently with the sale of the Registrable Securities to the Person asserting such loss, claim, damage, liability or expense and was relied upon by the Company in the preparation of such Registration Statement or Prospectus. In no event shall the liability of any selling Holder hereunder be greater in amount than the dollar amount of the net proceeds received by such Holder upon the sale of the Registrable Securities giving rise to such indemnification obligation. The Company shall be entitled to receive indemnities from underwriters, selling brokers, dealer managers and similar securities industry professionals participating in the distribution, to the same extent as provided above with respect to information so furnished in writing by such Persons specifically for inclusion in any Prospectus or Registration Statement.
(c) Conduct of Indemnification Proceedings. Any Person entitled to
indemnification hereunder will (i) give prompt (but in any event within 30 days
after such Person has actual knowledge of the facts constituting the basis for
indemnification) written notice to the indemnifying party of any claim with
respect to which it seeks indemnification and (ii) permit such indemnifying
party to assume the defense of such claim with counsel reasonably satisfactory
to the indemnified party; provided, however, that any delay or failure to so
notify the indemnifying party shall relieve the indemnifying party of its
obligations hereunder only to the extent, if at all, that it is prejudiced by
reason of such delay or failure; provided, further however, that any Person
entitled to indemnification hereunder shall have the right to select and employ
separate counsel and to participate in the defense of such claim, but the fees
and expenses of such counsel shall be at the expense of such Person unless (a)
the indemnifying party has agreed in writing to pay such fees or expenses, or
(b) the indemnifying party shall have failed to assume the defense of such claim
within a reasonable time after receipt of notice of such claim from the Person
entitled to indemnification hereunder and employ counsel reasonably satisfactory
to such Person or (c) in the reasonable judgment of any such Person, based upon
advice of its counsel, a conflict of interest may exist between such Person and
the indemnifying party with respect to such claims (in which case, if the Person
notifies the indemnifying party in writing that such Person elects to employ
separate counsel at the expense of the indemnifying party, the indemnifying
party shall not have the right to assume the defense of such claim on behalf of
such Person). If such defense is not assumed by the indemnifying party, the
indemnifying party will not be subject to any liability for any settlement made
without its consent (but such consent will not be unreasonably withheld or
delayed), provided that an indemnified party shall not be required to consent to
any settlement involving the imposition of equitable remedies or involving the
imposition of any material obligations on such indemnified party other than
financial obligations for which such indemnified party will be indemnified
hereunder. No indemnifying party will be required to consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party
of a release from all liability in respect to such claim or litigation. Whenever
the indemnified party or the indemnifying party receives a firm offer to settle
a claim for which indemnification is sought hereunder, it shall promptly notify
the other of such offer. If the indemnifying party refuses to accept such offer
within twenty (20) business days after receipt of such offer (or of notice
thereof), such claim shall continue to be contested and, if such claim is within
the scope of the indemnifying party's indemnity contained herein, the
indemnified party shall be indemnified pursuant to the terms hereof. If the
indemnifying party notifies the
indemnified party in writing that the indemnifying party desires to accept such offer, but the indemnified party refuses to accept such offer within twenty (20) business days after receipt of such notice, the indemnified party may continue to contest such claim and, in such event, the total maximum liability of the indemnifying party to indemnify or otherwise reimburse the indemnified party hereunder with respect to such claim shall be limited to and shall not exceed the amount of such offer, plus reasonable out-of-pocket costs and expenses (including reasonable attorneys' fees and disbursements) to the date of notice that the indemnifying party desires to accept such offer, provided that this sentence shall not apply to any settlement of any claim involving the imposition of equitable remedies or to any settlement imposing any material obligations on such indemnified party other than financial obligations for which such indemnified party will be indemnified hereunder. An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim will not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim in any one jurisdiction, unless in the written opinion of counsel to the indemnified party, reasonably satisfactory to the indemnifying party, use of one counsel would be expected to give rise to a conflict of interest between such indemnified party and any other of such indemnified parties with respect to such claim, in which event the indemnifying party shall be obligated to pay the fees and expenses of one such additional counsel.
(d) Other Indemnification. Indemnification similar to that specified in this Section 7 (with appropriate modifications) shall be given by the Company and each seller of Registrable Securities with respect to any required registration or other qualification of securities under federal or state law or regulation of governmental authority other than the Securities Act.
(e) Contribution. If for any reason the indemnification provided for
in the preceding clauses (a), (b) and (d) is unavailable to an indemnified party
or insufficient to hold it harmless as contemplated by the preceding clauses
(a), (b) and (d), then the indemnifying party shall, on a several (and not joint
and several) basis, contribute to the amount paid or payable by the indemnified
party as a result of such loss, claim, damage or liability in such proportion as
is appropriate to reflect not only the relative benefits received by the
indemnified party and the indemnifying party, but also the relative fault of the
indemnified party and the indemnifying party, as well as any other relevant
equitable considerations, provided that no selling Holder shall be required to
contribute in an amount greater than the dollar amount of the net proceeds
received by such selling Holder with respect to the sale of any securities. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
8. Rule 144. Following the Company's initial Public Offering and for so long as the Company is subject to the reporting requirements under the Exchange Act, the Company covenants that it will: (a) file the reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder, (b) take such further action as any Holder may reasonably request in writing to the extent required from time to time to enable the sale of Registrable Securities without registration under the Securities Act within the limitation of the exemption provided by Rule 144 (or any similar rule or rules then in effect) of the Securities Act, and (c) upon the reasonable written request of any Holder, deliver to such Holder all information regarding the Company required to be delivered in connection with Rule 144 (or any similar rule or rules then in effect) of the Securities Act. Notwithstanding
anything contained in this Section 8, the Company may deregister under Section 12 of the Exchange Act if it then is permitted to do so pursuant to the Exchange Act and the rules and regulations thereunder.
9. Participation in Underwritten Registrations. No Person may participate in any Underwritten Registration hereunder unless such Person (a) agrees to sell such Person's securities on the basis provided in any underwriting arrangements approved by the Persons entitled to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements. Nothing in this Section 9 shall be construed to create any additional rights regarding the Registration of Registrable Securities in any Person otherwise than as set forth herein.
10. Miscellaneous.
(a) Remedies. Remedies for breach by the Company of its obligations to register the Registrable Securities shall be as set forth herein. Each Holder, in addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate.
(b) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given unless the Company has obtained the written consent of the Holders of at least 66-2/3% of the then outstanding Registrable Securities; provided that no amendment, modification, supplement or waiver that treats any Holder or group of Holders adversely and in a manner that is different from any other Holder shall be effective without the consent of such Holder or group of Holders; provided, however, that Section 4 and Section 7 of this Agreement shall not be amended, modified or waived in any manner which would be adverse to CDPQ without CDPQ's prior written consent.
(c) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, registered first-class mail, telex, telecopier, or air courier guaranteeing overnight delivery:
If to the Company, Genstar Capital III, L.P. or Stargen to:
Altra Holdings, Inc.
c/o Genstar Capital Partners III, L.P.
Four Embarcadero Center, Suite 1900
San Francisco, CA 94111-4191
Attention: Jean-Pierre L. Conte Telecopy No.: (415) 834-2383
with a copy to:
Weil, Gotshal & Manges LLP
201 Redwood Shores Parkway
Redwood Shores, CA 94065
Attention: Craig W. Adas, Esq.
Fax No.: (650) 802-3100
If to CDPQ to:
Caisse de depot et placement du Quebec
1000, place Jean-Paul-Riopelle
Montreal (Quebec) H2Z 2B3
Attention: Luc Houle, Senior Vice President
Fax No.: (514) 847-2493
with a copy to:
Kirkland & Ellis LLP
Citigroup Center
153 East 53rd Street
New York, NY 10022-4675
Attention: Kimberly P. Taylor, Esq.
Fax No.: (212) 446-4900
if to any other Holder, to the address of such Holder set forth on the signature pages of this Agreement;
All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; four (4) business days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when confirmation of fax transmission is received, if by facsimile transmission; and on the next business day if timely delivered to an air courier guaranteeing overnight delivery.
(d) Successors and Assigns. Subject to Section 10(k), this Agreement including, without limitation, all registration rights in connection with the ownership of all or a portion of the Registrable Securities pursuant to Sections 3 and 4 hereof, shall inure to the benefit of and be binding upon the successors and assigns of each of the parties, including, without limitation, and without the need for an express assignment, subsequent Holders of Registrable Securities.
(e) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.
(f) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the principles of conflicts of laws.
(h) Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.
(i) Entire Agreement. This Agreement, the Subscription Agreement and the Stock Purchase Agreement constitute the entire agreement between or among the Company and the Holders concerning the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein with respect to the registration rights granted by the Company with respect to the securities issued or sold pursuant to the Subscription Agreement or the Stock Purchase Agreement. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matters, including, without limitation, the Prior Agreement.
(j) Limited Liability of Partners and Members. Notwithstanding any other provision of this Agreement, neither the general partner nor the limited partners nor any future general or limited partner of any Holder, and no member, partner or shareholder of any such general partner or limited partner, shall have any personal liability for performance of any obligation of such Holder under this Agreement in excess of the respective capital contribution of such general partner and limited partners to such Holder.
(k) Assignment of Registration Rights. The rights to cause the Company to register securities granted Holders under Sections 3 and 4 may be assigned to a transferee or assignee in connection with any transfer or assignment of Registrable Securities by a Holder; provided that (a) such transfer may otherwise be effected in accordance with applicable securities laws and restrictions on transfer agreed upon by the Holder and the Company (including those set forth in the Stockholders Agreement dated as of the date hereof, by and among the Company and the Holders), (b) notice of such assignment is given to the Company, and (c) such transferee or assignee agrees to be bound by all provisions of this Agreement.
(l) Termination. No Holder shall be entitled to exercise any registration rights provided for in this Agreement after a Public Offering and after such time as Rule 144 or another similar exemption under the Securities Act is available for the sale of all of such Holder's shares during a three-month period without registration, without reference to Rule 144(k).
(m) Additional Sales of Series A Preferred Stock. Notwithstanding anything to the contrary contained herein, if the Company shall issue additional shares of its Series A Preferred Stock, any purchaser of such shares of Series A Preferred Stock may become a party to this Agreement by executing and delivering an additional counterpart signature page to this
Agreement and shall be deemed a signatory hereto, and such shares shall be deemed Registrable Securities, hereunder, and such purchaser and such shares shall be entitled to all the rights and subject to all the obligations and restrictions set forth herein.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above.
COMPANY: ALTRA HOLDINGS, INC., a Delaware corporation By: /s/ Michael Hurt ------------------------------------ Name: Michael Hurt Its: ----------------------------------- HOLDERS: GENSTAR CAPITAL PARTNERS III, L.P., a Delaware limited partnership By: Genstar Capital III, L.P. Its: General Partner By: Genstar III GP LLC Its: General Partner By: /s/ J.P. Conte ------------------------------------ Name: J.P. Conte Title: --------------------------------- STARGEN III, L.P. By: Genstar Capital III, L.P. Its: General Partner By: Genstar III GP LLC Its: General Partner By: /s/ J.P. Conte ------------------------------------ Name: J.P. Conte Title: --------------------------------- [Registration Rights Agreement Signature Page] |
CAISSE DE DEPOT ET PLACEMENT DU QUEBEC By: /s/ Louise Lalonde ------------------------------------ Name: Louise Lalonde Title: --------------------------------- By: /s/ [not legible] ------------------------------------ Name: [not legible] Title: --------------------------------- [Registration Rights Agreement Signature Page] |
/s/ Michael Hurt ---------------------------------------- Michael L. Hurt Address: ------------------------------- /s/ William Duff ---------------------------------------- William J. Duff Address: ------------------------------- /s/ Thomas Tatarczuch ---------------------------------------- Thomas F. Tatarczuch Address: ------------------------------- /s/ Donald Wierbinski ---------------------------------------- Donald S. Wierbinski Address: ------------------------------- /s/ Charles Nims ---------------------------------------- Charles W. Nims Address: ------------------------------- /s/ Craig Schuele ---------------------------------------- Craig Schuele Address: ------------------------------- /s/ Gerald Ferris ---------------------------------------- Gerald Ferris Address: ------------------------------- [Registration Rights Agreement Signature Page] |
/s/ Matthew Taylor ---------------------------------------- Matthew F. Taylor Address: ------------------------------- /s/ Edward Novotny ---------------------------------------- Edward L. Novotny Address: ------------------------------- /s/ Mark Stuebe ---------------------------------------- Mark Stuebe Address: ------------------------------- /s/ Timothy McGowan ---------------------------------------- Timothy McGowan Address: ------------------------------- /s/ Larry McPherson ---------------------------------------- Larry McPherson Address: ------------------------------- /s/ Lee Hess ---------------------------------------- Lee Hess Address: ------------------------------- /s/ Thomas Hunt ---------------------------------------- Thomas Hunt Address: ------------------------------- [Registration Rights Agreement Signature Page] |
FRANK BAUCHIERO MKC WORLDWIDE By: /s/ Frank Bauchiero ------------------------------------ Name: Frank Bauchiero Title: --------------------------------- Address: ------------------------------- [Registration Rights Agreement Signature Page] |
EXHIBIT 4.12
EXECUTION COPY
NOTE PURCHASE AGREEMENT
BY AND BETWEEN
ALTRA HOLDINGS, INC.
AND
CAISSE DE DEPOT ET PLACEMENT DU QUEBEC
NOVEMBER 30, 2004
TABLE OF CONTENTS
Page ---- ARTICLE I DEFINITIONS.................................................... 1 1.1 CAPITALIZED TERMS............................................. 1 1.2 ACCOUNTING TERMS.............................................. 7 ARTICLE II AUTHORIZATION AND SALE OF NOTE................................ 8 2.1 AUTHORIZATION................................................. 8 2.2 SALE OF NOTE TO THE PURCHASER................................. 8 ARTICLE III CLOSING; DELIVERY............................................ 8 3.1 CLOSING....................................................... 8 3.2 DELIVERY...................................................... 8 ARTICLE IV CONDITIONS TO CLOSING BY THE PURCHASER........................ 8 4.1 REPRESENTATIONS AND WARRANTIES................................ 8 4.2 PERFORMANCE................................................... 8 4.3 NO MATERIAL ADVERSE CHANGE.................................... 8 4.4 ACQUISITION................................................... 9 4.5 SENIOR CREDIT FACILITY........................................ 9 4.6 SENIOR NOTE FINANCING......................................... 9 4.7 INVESTMENT IN THE COMPANY..................................... 9 4.8 LEGAL OPINION OF COMPANY'S COUNSEL............................ 9 4.9 CLOSING DOCUMENTS............................................. 9 4.10 LEGAL INVESTMENT; COMPLIANCE WITH LAWS........................ 10 4.11 PROCEEDINGS................................................... 10 4.12 QUALIFICATIONS................................................ 10 4.13 CONSENTS...................................................... 10 4.14 FEES AND EXPENSES............................................. 11 4.15 IRS FORM W-8.................................................. 11 ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMPANY.................. 11 5.1 ORGANIZATION, POWER, AUTHORITY AND GOOD STANDING.............. 11 5.2 AUTHORIZATION, EXECUTION, ENFORCEABILITY AND NO CONFLICTS..... 11 5.3 SUBSIDIARIES.................................................. 12 5.4 CAPITALIZATION................................................ 12 5.5 NO MATERIAL ADVERSE CHANGE.................................... 12 5.6 LITIGATION.................................................... 12 5.7 COMPLIANCE WITH LAWS.......................................... 13 5.8 COMMENCEMENT OF BUSINESS...................................... 13 5.9 BROKER'S FEES................................................. 13 5.10 MARGIN REGULATIONS............................................ 13 5.11 PUBLIC UTILITY HOLDING COMPANY ACT............................ 13 ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE PURCHASER............... 13 6.1 AUTHORIZATION, EXECUTION, ENFORCEABILITY AND NO CONFLICTS..... 13 |
6.2 PURCHASE FOR INVESTMENT....................................... 14 6.3 INVESTOR QUALIFICATIONS....................................... 14 6.4 BROKER'S FEES................................................. 14 ARTICLE VII REPORTING AND INSPECTION RIGHTS.............................. 14 7.1 ACCOUNTING.................................................... 14 7.2 FINANCIAL STATEMENTS AND OTHER INFORMATION.................... 14 7.3 INSPECTION RIGHTS............................................. 17 ARTICLE VIII MATURITY, INTEREST AND PREPAYMENT........................... 17 8.1 MATURITY...................................................... 17 8.2 INTEREST...................................................... 17 8.3 PREPAYMENT AT THE OPTION OF THE PURCHASER..................... 17 8.4 MANDATORY PREPAYMENTS......................................... 18 8.5 OPTIONAL PREPAYMENTS.......................................... 18 8.6 PREPAYMENT PREMIUMS........................................... 18 8.7 PAYMENT SET ASIDE............................................. 19 ARTICLE IX AFFIRMATIVE COVENANTS......................................... 19 9.1 COMPLIANCE WITH LAWS.......................................... 19 9.2 MAINTENANCE OF ASSETS; EXISTENCE.............................. 19 9.3 FEES AND EXPENSES............................................. 20 9.4 USE OF PROCEEDS............................................... 20 ARTICLE X NEGATIVE COVENANTS............................................. 20 10.1 CONDUCT OF BUSINESS........................................... 20 10.2 DIVIDENDS AND DISTRIBUTIONS................................... 20 10.3 TRANSACTIONS WITH AFFILIATES.................................. 21 10.4 REGULATION U AND X............................................ 21 ARTICLE XI EVENTS OF DEFAULT............................................. 21 11.1 EVENTS OF DEFAULT DEFINED; ACCELERATION OF MATURITY........... 21 11.2 SUITS FOR ENFORCEMENT......................................... 22 11.3 INDEMNIFICATION............................................... 22 11.4 DELAYS OR OMISSIONS........................................... 23 11.5 REMEDIES CUMULATIVE........................................... 23 ARTICLE XII MISCELLANEOUS................................................ 23 12.1 CONSENT TO AMENDMENTS; WAIVERS................................ 23 12.2 SURVIVAL OF TERMS............................................. 23 12.3 SUCCESSORS AND ASSIGNS........................................ 23 12.4 SEVERABILITY.................................................. 24 12.5 DESCRIPTIVE HEADINGS.......................................... 24 12.6 NOTICES....................................................... 25 12.7 GOVERNING LAW................................................. 25 12.8 EXHIBITS AND SCHEDULES........................................ 26 12.9 EXCHANGE, TRANSFER, OR REPLACEMENT OF SECURITIES.............. 26 |
12.10 FINAL AGREEMENT............................................... 26 12.11 EXECUTION IN COUNTERPARTS..................................... 26 12.12 NO SETOFFS, ETC............................................... 26 12.13 CONSTRUCTION.................................................. 27 12.14 FURTHER COOPERATION........................................... 27 12.15 WAIVERS BY THE COMPANY........................................ 27 |
NOTE PURCHASE AGREEMENT
This NOTE PURCHASE AGREEMENT (this "Agreement") is made as of November 30, 2004, by and between ALTRA HOLDINGS, INC., a Delaware corporation formerly known as CPT Acquisition Corp. (the "Company"), and CAISSE DE DEPOT ET PLACEMENT DU QUEBEC, a Quebec corporation (the "Purchaser").
RECITALS
A. On or about the date hereof, Altra Industrial Motion, Inc., a Delaware corporation and a wholly owned subsidiary of the Company ("Altra"), is purchasing, directly and indirectly, all of the issued and outstanding limited liability company interests of Power Transmission Holding LLC, a Delaware limited liability company ("PTH"), pursuant to a LLC Purchase Agreement, dated as of October 25, 2004 (the "LLC Purchase Agreement"), by and among the Company, Warner Electric Holding, Inc., a Delaware corporation, and Colfax Corporation, a Delaware corporation (the "Acquisition"), following which PTH will be merged with and into Altra.
B. Wells Fargo Foothill, Inc. has agreed to provide a certain credit facility to Altra consisting of a revolving line of credit in the aggregate principal amount of $30,000,000, to, among other things, provide working capital for the Company and its Subsidiaries.
C. Altra will also issue $165,000,000 aggregate principal amount of Senior Notes (as defined below), the proceeds of which will be used in connection with the Acquisition.
D. To further fund the Acquisition and to otherwise provide working capital, (i) the Purchaser desires to purchase from the Company, and the Company desires to issue and sell to the Purchaser, subject to the terms and conditions set forth herein, a subordinated note of the Company in the original principal amount of $14,000,000.
AGREEMENTS
In consideration of the recitals and the mutual covenants herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 CAPITALIZED TERMS. In addition to the capitalized terms defined elsewhere in this Agreement, the following capitalized terms shall have the following respective meanings when used in this Agreement:
"ACQUISITION AGREEMENTS" has the meaning given to such term in Section 4.4.
"AFFILIATE" as applied to any specified Person means any other Person (and all natural Persons related by blood, adoption or marriage to such other Person) directly or indirectly controlling, controlled by, or under direct or indirect common control with, such specified Person. The term "control" (including, with correlative meanings, the terms "controlling," "controlled by" and "under common control with"), as applied to any Person, means the possession, directly or indirectly, of 10% or more of the voting power (or in the case of a Person which is not a corporation, 10% or more of the ownership interest, beneficial or otherwise) of such Person or the power otherwise to direct or cause the direction of the management and policies of that Person, whether through voting, by contract or otherwise. For purposes of this paragraph, "voting power" of any Person means the total number of votes which may be cast by the holders of the total number of outstanding shares of stock of any class or classes of such Person in any election of directors of such Person. For purposes of this Agreement, all executive officers and directors of a Person and all managers and members of any board of managers or similar board of committee of a Person organized as a limited liability company shall be deemed to be Affiliates of such Person.
"ASSETS" means, with respect to any Person, all businesses, properties, assets, machinery, equipment, furniture, fixtures, goodwill and other rights of such Person, of every nature, kind and description, tangible and intangible, owned or leased, wheresoever located and whether or not carried or reflected on the books or records of such Person, used, held for use or useful in connection with the operation of the business of such Person.
"BOARD" means the Board of Directors of the Company.
"BUSINESS" means the Company's operation of the business of designing, producing and marketing mechanical power transmission products and the other businesses described in the Offering Circular.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.
"CAPITALIZED LEASE" means any lease of property (whether real, personal or mixed) which, in conformity with GAAP, is accounted for as a liability on the balance sheet of the lessee.
"CHANGE OF CONTROL EVENT" means (i) the Permitted Holders fail to own and
control, directly or indirectly, at least a majority of the capital stock of the
Company having the right to vote for the election of members of the Board, or
(ii) the Company ceases to own, directly or indirectly, and control 100% of the
outstanding capital stock of Altra.
"CHANGE OF CONTROL NOTICE" has the meaning given to such term in Section 8.4.
"CLOSING" means the closing of the sale and purchase of the Note pursuant to this Agreement.
"CLOSING DATE" has the meaning ascribed to it in Section 3.1.
"CODE" means the Internal Revenue Code of 1986, as amended, and all rules and regulations promulgated thereunder.
"COMMISSION" means the Securities and Exchange Commission.
"CONTRACT" means any written or binding oral contract, agreement, credit agreement, note, bond, indenture, lease, sublease, purchase order, Permit, or other binding agreement or binding understanding.
"CONTROLLED AFFILIATE" as applied to any specified Person means any other Person (and all natural Persons related by blood, adoption or marriage to such other Person) directly or indirectly controlling, controlled by, or under direct or indirect common control with, such specified Person. The term "control" (including, with correlative meanings, the terms "controlling," "controlled by" and "under common control with"), as applied to any Person, means the possession, directly or indirectly, of 50% or more of the voting power (or in the case of a Person which is not a corporation, 50% or more of the ownership interest, beneficial or otherwise, or as provided below) of such Person or the power otherwise to direct or cause the direction of the management and policies of that Person, whether through voting, by contract or otherwise. For purposes of this paragraph, "voting power" of any Person means the total number of votes which may be cast by the holders of the total number of outstanding shares of stock of any class or classes of such Person in any election of directors of such Person. For purposes of this Agreement, all executive officers and directors of a Person and all managers and members of any board of managers or similar board or committee of a Person organized as a limited liability company and all general partners of a Person organized as a partnership shall be deemed to be Controlled Affiliates of such Person.
"DEFAULT" means any event or condition, the occurrence of which would, with the lapse of time or the giving of notice, or both, constitute an Event of Default.
"DOLLARS," "DOLLARS" and "$" each mean lawful money of the United States.
"EQUITY DOCUMENTS" means, collectively, the Subscription Agreement, the Stockholders' Agreement and the Registration Rights Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and all rules and regulations promulgated thereunder.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EVENT OF DEFAULT" has the meaning ascribed to it in Section 11.1.
"FACILITIES" means any and all real property (including, without limitation, all buildings, fixtures or other improvements located thereon) owned, leased or operated by the Company or any of its Subsidiaries. "Facility" means any one of the Facilities.
"FIRPTA AFFIDAVIT" means an affidavit, sworn under penalty of perjury and in form and substance required under Treasury Regulations Section 1.897-2(h), stating that the Company is not, and
immediately following the Acquisition will not be, a "United States real property holding corporation" as defined in Code Section 897(c)(2).
"FISCAL YEAR" means any 12-month period ending on December 31st of each year.
"GAAP" means United States generally accepted accounting principles, consistently applied.
"GOVERNING DOCUMENT(S)" means the legal document(s) by which any Person (other than an individual) establishes its legal existence or which govern its internal affairs. For example, the "Governing Documents" of a corporation would be its charter and by-laws, the "Governing Document" of a limited partnership is its limited partnership agreement and the "Governing Document" of a limited liability company is its operating agreement.
"GOVERNMENTAL AUTHORITY" means any federal, state, local, or other governmental or administrative body, instrumentality, board, department, or agency or any court, tribunal, administrative hearing body, arbitration panel, commission, or other similar dispute-resolving panel or body.
"GUARANTEE" means any guarantee of the payment or performance of any Indebtedness or other obligation and any other arrangement whereby credit is extended (or continued) to one obligor on the basis of any promise of another Person, whether that promise is expressed in terms of an obligation to (i) pay the Indebtedness or other liabilities of such obligor, (ii) purchase an obligation owed by such obligor, (iii) purchase goods and services from such obligor for the purpose of enabling such obligor to make payment of such Indebtedness or to assure the owners of the Indebtedness against loss, (iv) maintain the equity capital, working capital, solvency or general financial condition of such obligor, or (v) otherwise assure any creditor of such obligor against financial loss (including by way of an agreement to repurchase or reimburse), whether or not any such arrangement is listed on the balance sheet of such other Person or referred to in a footnote thereto. The amount of any Guarantee shall be equal to the amount of the obligation so guaranteed or otherwise supported or, if not a fixed or determined amount, the maximum amount guaranteed or supported.
"HOLDER" means the Purchaser, together with its successors and permitted registered assigns pursuant to Section 12.3(b).
"INDEBTEDNESS" of any Person shall mean the principal of, premium, if any,
and unpaid interest on (without duplication): (a) indebtedness for borrowed
money; (b) obligations for which a Person is obligated pursuant to a Guarantee;
(c) all indebtedness secured by any Lien upon property owned by such Person,
even though such Person has not in any manner become liable for the payment of
such indebtedness; (d) all indebtedness of such Person created or arising under
any Capitalized Lease, conditional sale or other title retention or security
agreement with respect to property acquired by such Person even though the
rights and remedies of the seller, lessor or lender under such agreement or
lease in the event of default may be limited to repossession or sale of such
property; (e) all obligations of such Person issued or assumed for the deferred
purchase price of property or services, including all trade payables; (f) all
obligations of
such Person under or with respect to letters of credit; and (g) any unsatisfied obligations for Withdrawal Liability to a Multiemployer Plan.
"INDENTURE" means the indenture, dated November 30, 2004, by and among Altra, the guarantors named therein and The Bank of New York Trust Company, N.A., as trustee and as collateral agent.
"INTEREST" has the meaning given to such term in Section 8.2.
"INVESTORS" means Genstar Capital, L.P. and its Affiliates, the Purchaser and certain management investors.
"INSOLVENCY PROCEEDING" means any proceeding commenced by or against any Person under any provision of the Bankruptcy Code or under any other national, state or federal bankruptcy or insolvency law, assignments for the benefit of creditors, formal or informal moratoria, compositions, or proceeding seeking reorganization, arrangement, or other similar relief.
"INTEREST PAYMENT DATE" means January 15th, April 15th, July 15th and October 15th of each year (or, if any such day is not a Business Day, on the immediately succeeding Business Day), beginning on April 15, 2005.
"LIEN" means any mortgage, deed of trust, lien, security interest, pledge, lease, conditional sale contract, claim, charge, easement, right of way, assessment, restriction and other encumbrance of every kind.
"LOAN DOCUMENTS" means this Agreement and the Note.
"MANAGEMENT AGREEMENT" means the advisory services agreement, dated November 30, 2004, by and among Genstar Capital, L.P., the Company and Altra, as such agreement may be amended, restated or otherwise modified from time to time.
"MANDATORY PREPAYMENT" has the meaning given to such term in Section 8.4.
"MATERIAL ADVERSE EFFECT" means (i) any circumstance, change in, or effect on the Company or any of its Subsidiaries that is materially adverse to the Business, properties, Assets, liabilities, condition (financial or otherwise), operations, earnings or results of operations of the Company and its Subsidiaries, taken as a whole, and (ii) a material impairment of the Company's ability to perform its obligations under the Loan Documents to which it is a party in all material respects.
"MATURITY DATE" means November 30, 2019.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in Section 4001(a)(3) of ERISA, and to which any Person is making, is obligated to make, has made or been obligated to make, contributions on behalf of participants who are or were employed by any of them or to which such person has any current or potential liability.
"NOTE" means the Subordinated Note of the Company in the original principal amount of $14,000,000 in favor of the Purchaser dated as of the date hereof, in the form attached hereto as Exhibit A, as amended and in effect from time to time, and any note or notes issued in exchange for such note.
"OFFERING CIRCULAR" means the final offering circular, dated November 22, 2004, as amended and supplemented, delivered to investors in connection with the issuance by Altra of its 9% Senior Secured Notes due 2011.
"OPTIONAL PREPAYMENT" has the meaning given to such term in Section 8.5.
"PERMIT" means all permits, licenses, authorizations, registrations, franchises, approvals, consents, certificates, variances and similar rights obtained, or required to be obtained, from Governmental Authorities.
"PERMITTED BUSINESS" means any business that is the same as or similar, reasonably related, complementary or incidental to the business in which the Company and its Subsidiaries are engaged on the date hereof.
"PERMITTED HOLDERS" means Genstar Capital Partners III, L.P., Genstar Capital, L.P., Stargen III, L.P. and each of their Controlled Affiliates.
"PERSON" means an individual, a corporation, a partnership, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or a governmental entity or any department, agency or political subdivision thereof.
"PIK INTEREST" has the meaning given to such term in Section 8.2.
"PREPAYMENT OPTION" has the meaning given to such term in Section 8.3.
"PREPAYMENT OPTION NOTICE" has the meaning given to such term in Section 8.3.
"PREPAYMENT NOTICE" has the meaning given to such term in Section 8.4.
"PURCHASER" means Caisse de depot et placement du Quebec, a Quebec corporation, and any Person to whom all or any portion of the Note is assigned.
"REGISTER" has the meaning given to such term in Section 12.3(c).
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement, dated as of the date hereof, by and among Genstar Capital Partners III, L.P., a Delaware limited partnership, Stargen Capital Partners III, L.P., a Delaware limited partnership, the Purchaser, and each of the other persons listed on the signature pages thereto, as such agreement may be amended, restated or otherwise modified from time to time.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SENIOR LENDERS" means those lenders party to the Senior Credit Agreement.
"SENIOR CREDIT AGREEMENT" means the Credit Agreement, dated November 30, 2004, by and among Altra, each of its Subsidiaries that are signatories thereto, the lenders that are signatories thereto and Wells Fargo Foothill, Inc., as the arranger and administrative agent.
"SENIOR CREDIT DOCUMENTS" means the Senior Credit Agreement and each agreement and instrument referred to therein executed in connection with the Senior Credit Agreement as in effect on the Closing Date, as such documents may be amended, supplemented, replaced or otherwise modified from time to time after the Closing Date.
"SENIOR NOTE DOCUMENTS" means the Indenture and all other agreements, documents and instruments referred to therein entered into or delivered in connection therewith.
"SENIOR NOTES" means the 9% senior secured notes due 2011, each dated as of the date hereof, to be issued by Altra.
"SENIOR NOTES PAYMENT DATE" means the earlier to occur of (i) December 1, 2011 or (ii) the date that 100% of the principal, interest and other amounts then due under the Senior Notes is repaid or redeemed pursuant to terms of the Indenture.
"STOCKHOLDERS AGREEMENT" means the Stockholders Agreement, dated as of the date hereof, by and among the Company and each of the parties named on Exhibit A thereto, as such agreement may be amended, restated or otherwise modified from time to time.
"SUBSCRIPTION AGREEMENT" means the Subscription Agreement, dated as of the date hereof, by and among the Company and the Investors, as such agreement may be amended, restated or otherwise modified from time to time.
"SUBSIDIARY" means any corporation, association, limited liability company, partnership or other business entity of which securities or other ownership interests representing more than fifty percent (50%) of the ordinary voting power or profits interest are, at the time as of which any determination is being made, owned or controlled by such Person or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person.
"TREASURY REGULATIONS" means the regulations promulgated or proposed by the United States Treasury Department under the Code.
"WITHDRAWAL LIABILITY" means, at any time, the aggregate amount of the liabilities, if any, pursuant to Section 4201 of ERISA, and any increase in contributions pursuant to Section 4243 of ERISA with respect to all Multiemployer Plans.
1.2 ACCOUNTING TERMS. All accounting terms not specifically defined herein shall be construed in accordance with GAAP.
ARTICLE II
AUTHORIZATION AND SALE OF NOTE
2.1 AUTHORIZATION. Prior to the Closing, the Company will authorize the issuance and sale to the Purchaser of the Note.
2.2 SALE OF NOTE TO THE PURCHASER. Subject to the satisfaction of the terms and conditions set forth herein and in reliance upon the respective representations and warranties of the parties set forth herein or in any other document delivered pursuant hereto, at the Closing, the Company agrees to sell to the Purchaser, and the Purchaser agrees to purchase from the Company, the Note.
ARTICLE III
CLOSING; DELIVERY
3.1 CLOSING. The Closing will be held at the offices of Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New York, New York, on November 30, 2004 (the "Closing Date"), at 10:00 a.m., local time, or at such other time, date and place as may be mutually agreed to by the Company and the Purchaser.
3.2 DELIVERY. At the Closing, the Company will deliver the Note to the Purchaser, duly executed and registered in the name of the Purchaser, against payment by the Purchaser of the aggregate purchase price therefor paid by wire transfer of funds to an account designated by the Company. The Note shall be dated the Closing Date and shall be executed by an executive officer of the Company.
ARTICLE IV
CONDITIONS TO CLOSING BY THE PURCHASER
The obligation of the Purchaser to purchase and pay for the Note at the Closing is subject to the fulfillment to its satisfaction at or prior to the Closing of each of the following conditions:
4.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties contained in Article V shall be true and correct when made, and shall be so true and correct in all material respects (except for those representations and warranties which are qualified as to materiality or Material Adverse Effect, which shall be true and correct in all respects) as of the Closing as if made at the Closing.
4.2 PERFORMANCE. All covenants, agreements and conditions contained in this Agreement to be performed or complied with by the Company at or prior to the Closing shall have been performed or complied with in all material respects.
4.3 NO MATERIAL ADVERSE CHANGE. Since October 1, 2004, there has been no event, act, condition or occurrence that has had, or could reasonably be expected to have, a Material Adverse Effect.
4.4 ACQUISITION. Concurrently with, or prior to, the issuance of the Note,
(i) Altra shall have acquired all of the ownership interests of PTH pursuant to
the terms and conditions of the LLC Purchase Agreement and (ii) the Company
shall have acquired all of the outstanding shares of The Kilian Company pursuant
to the terms and conditions of the Subscription Agreement (together with the LLC
Purchase Agreement, the "Acquisition Agreements"). Each Acquisition Agreement
will be in full force and effect, will not have been amended or modified in any
material respect and the conditions set forth in each Acquisition Agreement will
have been satisfied in full unless waived by the Company with the prior consent
of the Purchaser, which consent shall not be unreasonably withheld or delayed.
At or prior to the Closing, the Company shall have delivered to the Purchaser
true and complete copies of the Acquisition Documents.
4.5 SENIOR CREDIT FACILITY. Altra and the Senior Lenders shall have entered into the Senior Credit Agreement providing for loans to Altra in the aggregate principal amount of up to $30,000,000, and the closing of the transactions under the Senior Credit Agreement shall have been consummated prior to or simultaneously with the Closing hereunder. The Purchaser shall have received and reviewed copies of each of the Senior Credit Documents, and the terms and conditions of such Senior Credit Documents shall be reasonably satisfactory to the Purchaser.
4.6 SENIOR NOTE FINANCING. Altra shall have received gross cash proceeds of $165,000,000 from the issuance and sale of the Senior Notes. The Purchaser shall have received and reviewed copies of each of the Senior Note Documents, and the terms and conditions of such Senior Note Documents shall be reasonably satisfactory to the Purchaser.
4.7 INVESTMENT IN THE COMPANY. At the Closing, (i) Genstar Capital, L.P. and its Affiliates shall have purchased capital stock of the Company for an aggregate purchase price of $19,334,400 payable in cash, (ii) the Purchaser shall have purchased capital stock of the Company for an aggregate purchase price of $7,000,000 payable in cash and (iii) the management investors shall have acquired capital stock of the Company with an aggregate value of $859,443.07, in each case pursuant to the terms and conditions of the Subscription Agreement. The Investors shall have executed and delivered the Equity Documents on terms and conditions satisfactory to the Purchaser.
4.8 LEGAL OPINION OF COMPANY'S COUNSEL. The Purchaser shall have received from Weil, Gotshal & Manges LLP, counsel for the Company, an opinion addressed to the Purchaser, dated as of the Closing Date and in form and substance reasonably satisfactory to the Purchaser.
4.9 CLOSING DOCUMENTS. The Company shall have delivered to the Purchaser each of the following documents:
(a) the Note, duly completed and executed by the Company;
(b) an officer's certificate from the Company, dated as of the Closing Date, stating that the conditions specified in Sections 4.1 through 4.7 hereof (other than with respect to the Purchaser's receipt or review of the documents required to be delivered thereunder) have been fully satisfied;
(c) certified copies of resolutions duly adopted by the Board, authorizing the execution, delivery and performance of each of the Loan Documents, the issuance, sale and delivery of the Note and the consummation of the transactions contemplated by this Agreement;
(d) a certificate of the Secretary of the Company, certifying the names and the signatures of the officers of the Company authorized to sign this Agreement, the Note and each of the other agreements, documents and instruments contemplated hereby;
(e) certified copies of the Governing Documents of the Company and Altra, as in effect at the Closing;
(f) a certificate of good standing of the Company, dated as of a recent date, issued by the Secretary of State of the State of Delaware and each other state in which the Company is qualified to do business, and a telegram, telex or other acceptable method of confirmation from said Secretary and the Secretary of State of such other states as of the close of business on the next Business Day preceding the date of the Closing as to the continued good standing of the Company;
(g) certified copies of the Senior Credit Documents and the Senior Note Documents;
(h) FIRPTA Affidavit dated as of the Closing Date from the Company; and
(i) copies of all third party and governmental consents, approvals and filings required in connection with the consummation of the transactions contemplated by this Agreement.
4.10 LEGAL INVESTMENT; COMPLIANCE WITH LAWS. The purchase of the Note by the Purchaser shall be legally permitted by all applicable material laws and regulations to which the Purchaser and the Company are subject. The purchase of the Note shall not subject the Purchaser to any penalty or liability under or pursuant to any applicable material law, rule, or regulation.
4.11 PROCEEDINGS. All corporate and other proceedings in connection with the transactions contemplated hereby, by the other Loan Documents, and all documents and instruments incident to such transactions, shall be reasonably satisfactory in form and substance to the Purchaser.
4.12 QUALIFICATIONS. All authorizations, approvals or permits of, or filings with any Governmental Authority that are required by law in connection with the lawful sale and issuance of the Note to the Purchaser shall have been duly obtained by the Company, and shall be effective on and as of the Closing.
4.13 CONSENTS. The Company shall have received in writing consents required of third parties for the consummation of the transactions contemplated hereby and by the other Loan Documents pursuant to any law, contract, agreement or instrument by which it is bound or to which it is subject.
4.14 FEES AND EXPENSES. The Company shall have paid to the Purchaser the
fee and all costs and expenses that the Company is obligated to pay pursuant to
Section 9.3.
4.15 IRS FORM W-8. The Purchaser shall have delivered a properly executed IRS Form W-8BEN and/or W-8EXP and/or W-8IMY establishing a complete exemption from U.S. withholding taxes on all payments made under the Note or under this Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
As a material inducement to the Purchaser to enter into and perform its obligations under this Agreement, the Company hereby represents and warrants to the Purchaser as set forth below, and acknowledges that the Purchaser is entering into this Agreement in reliance on the truth and accuracy of such representations and warranties.
5.1 ORGANIZATION, POWER, AUTHORITY AND GOOD STANDING.
Each of the Company and Altra is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has all requisite power and authority to own, lease and operate its Assets and to carry on its business as presently conducted and as presently proposed to be conducted by it. Each of the Company and Altra is duly licensed or qualified to transact business and is in good standing to transact business as a foreign entity in each jurisdiction in which the character of its business makes such qualification necessary, except for those jurisdictions where the failure to be so licensed, qualified or in good standing would not be reasonably likely to have a Material Adverse Effect.
5.2 AUTHORIZATION, EXECUTION, ENFORCEABILITY AND NO CONFLICTS.
(a) The Company has all requisite power and authority (corporate or otherwise) to execute and deliver the Loan Documents and any and all instruments necessary or appropriate in order to fully effectuate the terms and conditions of each Loan Document and to perform and consummate the transactions contemplated hereby and thereby. The Loan Documents, and the performance of its obligations hereunder and thereunder, have been duly and validly authorized by all requisite action on the part of the Company, and each Loan Document has been duly and validly executed and delivered by the Company, and constitutes a valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms and conditions, except as enforceability thereof may be limited by any applicable bankruptcy, reorganization, insolvency, moratorium, fraudulent conveyance, preferential transfer or distribution laws or other laws now or hereinafter in effect relating to or affecting creditors' rights generally or by general principles of equity.
(b) The execution, delivery and performance by the Company of the Loan Documents and the consummation of the transactions contemplated hereby and thereby, will not (i) violate any law applicable to the Company or Altra or any of their Assets or (ii) conflict with, or result in any breach of, any of the terms, conditions or provisions of, or constitute (with due notice or lapse of time, a default or give rise to any right of termination, cancellation or acceleration, or result in the creation of any Lien upon any of their Assets or under any provision
of (A) the Loan Documents, (B) the Governing Documents of the Company or Altra,
(C) any Permit or (D) any other material Contract to which the Company or any of
its Subsidiaries is a party or by which any of their Assets is or may be bound
except, in the case of clause (D), where such conflict or breach would not be
reasonably likely to have a Material Adverse Effect. Except as set forth on
Schedule 5.2(b), the Company is not required to give any notice to, or make any
filing with, any Governmental Authority or any other Person, or obtain any
Permit, in each case for the valid execution, delivery and performance by the
Company of the Loan Documents.
5.3 SUBSIDIARIES. Except as set forth on Schedule 5.3, the Company does not have any Subsidiaries and does not own any interest in or control, directly or indirectly, any other corporation, association or business entity.
5.4 CAPITALIZATION.
(a) Set forth on Schedule 5.4(a) is a complete and accurate description of the issued and outstanding capital stock of the Company and each of its Subsidiaries as of the Closing Date. Other than as described on Schedule 5.4(a), there are no subscriptions, options, warrants or calls relating to any shares of the Company's or any of its Subsidiary's capital stock, including any right of conversion or exchange under any outstanding security or other instrument, or any phantom stock or stock appreciation rights. Neither the Company nor any Subsidiary of the Company is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital stock or any security convertible into or exchangeable for any of its capital stock, other than pursuant to the Company's 2004 Equity Incentive Plan.
(b) Other than the Note and except as set forth on Schedule 5.4(b), the Company has no Indebtedness.
5.5 NO MATERIAL ADVERSE CHANGE. Since October 1, 2004, there has been no change in the operating results, assets, liabilities, operations, business, condition (financial or otherwise), employee relations or customer or supplier relations of the Company or any of its Subsidiaries, taken as a whole, which has had or could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.
5.6 LITIGATION. Except as disclosed on Schedule 5.6, (i) there are no actions, suits, proceedings, orders, injunctions, decrees, claims or investigations pending or, to the Company's knowledge, threatened against or affecting the Company, any of its Subsidiaries or any of their respective assets, or pending or, to the Company's knowledge, threatened by the Company or any of its Subsidiaries against any third-party, at law or in equity, or before or by any Governmental Authority, and (ii) none of the Company nor any of its Subsidiaries is subject to any arbitration proceedings under collective bargaining agreements or otherwise or any governmental investigations or inquiries, in the case of clauses (i) and (ii) above which has had or could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.
5.7 COMPLIANCE WITH LAWS. Except as disclosed on Schedule 5.7, none of the Company nor any of its Subsidiaries has violated any law or any governmental regulation or requirement which violation has had or could reasonably be expected to have a Material Adverse Effect, and none of the Company nor any of its Subsidiaries has received notice of any such violation.
5.8 COMMENCEMENT OF BUSINESS. Since the date of its inception, the Company has not engaged in any activity other than such actions in connection with (i) its organization, (ii) the ownership of capital stock of Altra, (iii) the preparation, negotiation and execution of this Agreement and the other Loan Documents and the transactions contemplated hereby and thereby and (iv) the other transactions disclosed in the Offering Circular.
5.9 BROKER'S FEES. Except as disclosed on Schedule 5.9, there are no claims for brokerage commissions, finders' fees or similar compensation in connection with the transactions contemplated by this Agreement and the other Loan Documents based on any arrangement or agreement binding upon the Company or any of its Subsidiaries. The Company shall pay, and hold the Purchaser harmless against, any liability, loss or expense (including reasonable attorneys' fees and out-of-pocket expenses) arising in connection with any such claim.
5.10 MARGIN REGULATIONS. The Company does not own any "margin stock," as the term is defined in Regulation U of the Federal Reserve Board, and the proceeds of the Note will be used only for the purposes contemplated hereunder. None of the proceeds of the Note will be used, directly or indirectly, for the purpose of purchasing or carrying any margin security, for the purpose of reducing or retiring any indebtedness which was originally incurred to purchase or carry any margin security or for any other purpose which might cause the loans hereunder to be considered "purpose credit" within the meaning of Regulations U or X of the Federal Reserve Board. The purchase of the Note will not constitute a violation of such Regulations U or X.
5.11 PUBLIC UTILITY HOLDING COMPANY ACT. The Company is not a "holding company," or a "subsidiary company" of a "holding company," or an "affiliate" of a "holding company," or an "affiliate" of a "subsidiary company" of a "holding company," all within the meaning of the Public Utility Holding Company Act of 1935, as amended.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
As a material inducement to the Company to enter into and perform its obligations under this Agreement, the Purchaser represents and warrants to the Company as set forth below, and acknowledges that the Company is entering into this Agreement in reliance on the truth and accuracy of such representations and warranties.
6.1 AUTHORIZATION, EXECUTION, ENFORCEABILITY AND NO CONFLICTS. The Purchaser has all requisite power and authority (corporate or otherwise) to execute and deliver the Loan Documents to which it is a party and any and all instruments necessary or appropriate in order to fully effectuate the terms and conditions of each such Loan Document and to perform and
consummate the transactions contemplated hereby and thereby. The Loan Documents to which the Purchaser is a party, and the performance of its obligations hereunder and thereunder, have been duly and validly authorized by all requisite action on the part of the Purchaser, and each such Loan Document has been duly and validly executed and delivered by the Purchaser, and constitutes a valid and legally binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms and conditions, except as enforceability thereof may be limited by any applicable bankruptcy, reorganization, insolvency, moratorium, fraudulent conveyance, preferential transfer or distribution laws or other laws now or hereinafter in effect relating to or affecting creditors' rights generally or by general principles of equity.
6.2 PURCHASE FOR INVESTMENT. The Purchaser is acquiring the Note for investment for its own account and not with a view to the public resale of all or any part thereof in any transaction which would constitute a "distribution" within the meaning of the Securities Act.
6.3 INVESTOR QUALIFICATIONS. The Purchaser (a) is an "accredited investor" (as defined in Regulation D promulgated under the Securities Act), (b) is able to bear the complete loss of its investment in the Note, and (c) acknowledges that the Note has not been registered under the Securities Act. The Purchaser is not an entity formed solely to make this investment.
6.4 BROKER'S FEES. Except as disclosed on Schedule 6.4, there are no claims for brokerage commissions, finders' fees or similar compensation in connection with the transactions contemplated by the Loan Documents based on any arrangement or agreement binding upon the Purchaser. The Purchaser shall pay, and hold the Company harmless against, any liability, loss or expense (including reasonable attorneys' fees and out-of-pocket expenses) arising in connection with any such claim.
ARTICLE VII
REPORTING AND INSPECTION RIGHTS
7.1 ACCOUNTING. The Company will maintain and will cause each of its
Subsidiaries to maintain a system of accounting established and administered in
accordance with GAAP and all financial statements or information delivered under
Section 7.2 will be prepared in accordance with GAAP except as otherwise set
forth in Section 7.2.
7.2 FINANCIAL STATEMENTS AND OTHER INFORMATION. The Company will deliver to the Purchaser:
(a) to the extent available and as soon as available, unaudited statements of income and cash flows of the Company and unaudited consolidated statements of income and cash flows of Altra and its Subsidiaries for such monthly period (as well as unaudited statements of income of the Company and unaudited consolidated statements of income of Altra and its Subsidiaries for the period from the beginning of the Fiscal Year to the end of such month) and unaudited balance sheets of the Company and unaudited consolidated balance sheets of Altra and its Subsidiaries as of the end of such monthly period (and such financial statements shall set forth in each case comparisons to the Company's and Altra and its Subsidiaries' corresponding period in the preceding Fiscal Year, with an explanation of any material differences between them).
Such monthly financial statements shall be prepared in accordance with GAAP
(subject to the absence of footnotes and normal year-end adjustments) and on a
basis consistent with the annual audited statements delivered pursuant to
Section 7.2(c) and on a basis consistent with such statements prepared in prior
periods. In addition, all such financial statements shall be accompanied by an
officer's certificate, certified by the Chief Financial Officer of the Company
and the Chief Financial Officer of Altra, as the case may be, stating that there
is no Event of Default in existence and that none of the Company nor Altra and
any of its Subsidiaries, as the case may be, is in Default under any of the Loan
Documents or any of their other material Contracts or, if any Event of Default
exists, specifying the nature and period of existence thereof and what actions
the Company and its Subsidiaries have taken and propose to take with respect
thereto. Notwithstanding anything herein to the contrary, any obligations under
this Section 7.2(a) (other than with respect to the financial statements of the
Company) shall not be in effect during such time as Altra is filing such
information pursuant to its reporting requirements under Section 13 or Section
15(d) of the Exchange Act;
(b) as soon as available, but no later than 45 days after the end of each quarterly accounting period in each Fiscal Year of the Company (other than any quarterly accounting period ending on the last day of a Fiscal Year of the Company), unaudited consolidated statements of income and cash flows of the Company and its Subsidiaries for such quarterly period (as well as unaudited consolidated statements of income of the Company and its Subsidiaries for the period from the beginning of the Fiscal Year to the end of such quarter) and unaudited consolidated balance sheets of the Company and its Subsidiaries as of the end of such quarterly period (and such financial statements shall set forth in each case comparisons to the Company's and its Subsidiaries' corresponding period in the preceding Fiscal Year, with an explanation of any material differences between them). Such quarterly financial statements shall be prepared in accordance with GAAP (subject to the absence of footnotes and normal year-end adjustments) and on a basis consistent with the annual audited statements delivered pursuant to Section 7.2(c) and on a basis consistent with such statements prepared in prior periods. In addition, all such financial statements shall be accompanied by an officer's certificate, certified by the Chief Financial Officer of the Company, stating that there is no Event of Default in existence and that none of the Company nor any of its Subsidiaries is in Default under any of the Loan Documents or any of their other material Contracts or, if any Event of Default exists, specifying the nature and period of existence thereof and what actions the Company and its Subsidiaries have taken and propose to take with respect thereto. Notwithstanding anything herein to the contrary, any obligations under this Section 7.2(b) shall not be in effect during such time as the Company is filing such information pursuant to its reporting requirements under Section 13 or Section 15(d) of the Exchange Act;
(c) as soon as available, but no later than 90 days after the end of each Fiscal Year of the Company, audited consolidated statements of income and cash flows of the Company and its Subsidiaries for such Fiscal Year, and audited consolidated balance sheets of the Company and its Subsidiaries as of the end of such Fiscal Year (and such financial statements shall set forth in each case comparisons to the Company's and its Subsidiaries' corresponding period in the preceding Fiscal Year). Such audited financial statements shall be prepared in accordance with GAAP and shall be accompanied by an unqualified opinion of a public accounting firm of national reputation reasonably acceptable to the Purchaser. Notwithstanding anything herein to the contrary, any obligations under this Section 7.2(c) shall
not be in effect during such time as the Company is filing such information pursuant to its reporting requirements under Section 13 or Section 15(d) of the Exchange Act;
(d) not later than the last business day of January of each Fiscal Year of the Company, a consolidated month by month projected operating budgets, projections, profit and loss statements, income statements, balance sheets and cash flow reports of and for the Company and its Subsidiaries for that Fiscal Year. All such financial information shall be prepared on a basis consistent with the financial statements delivered pursuant to Section 7.2(b);
(e) promptly after receipt or delivery thereof, copies of each notice, demand, statement, report, certificate or other communication or document delivered in connection with the Senior Note Documents or the Senior Credit Documents;
(f) promptly upon receipt thereof, any additional reports, management letters or other detailed information concerning significant aspects of the operations or financial affairs of the Company and its Subsidiaries provided to the Company by its accountants (and not otherwise contained in the other materials provided hereunder) unless such delivery is prohibited by the policies of such accountants or by any applicable law, rule or regulation;
(g) within ten (10) Business Days after transmission thereof, copies of all financial statements, proxy statements, reports and any other general written communications which the Company sends to its stockholders and copies of all registration statements and all regular, special or periodic reports which the Company or any of the Subsidiaries files, or any of its officers file with respect to the Company or any of the Subsidiaries, with the Commission or with any securities exchange on which any of the Company's or any of the Subsidiaries' securities are then listed to the extent not otherwise available on the Commission's website;
(h) promptly, but in any event within five (5) Business Days after the Company has knowledge of any event or condition that constitutes a Default or an Event of Default, notice thereof and a statement of the curative action that the Company proposes to take with respect thereto;
(i) promptly after the commencement thereof, but in any event within five (5) Business Days after service of process with respect thereto on the Company or any of the Subsidiaries, notice of all actions, suits or proceedings brought by or against the Company or any of the Subsidiaries before any Governmental Authority which would reasonably be expected to have a Material Adverse Effect; and
(j) with reasonable promptness, any other information reasonably requested by the Purchaser relating to the financial condition of the Company and its Subsidiaries.
The Purchaser agrees that it will keep confidential and will not
disclose, divulge or use for any purpose, other than (x) to monitor its
investment in the Company and (y) to comply with its reporting requirements
under applicable law or regulation, any confidential information obtained from
the Company (including the information delivered pursuant to this Section 7.2)
pursuant to the terms of this Agreement, unless such confidential information
(i) is known or becomes known to the public in general (other than as a result
of a breach of this Section 7.2 by the Purchaser), (ii) is or has been
independently developed or conceived by the
Purchaser without use of the Company's confidential information or (iii) is or has been made known or disclosed to the Purchaser by a third party without a breach of any obligation of confidentiality such third party may have to the Company; provided, however, that the Purchaser may disclose confidential information to its attorneys, accountants and employees to the extent necessary to obtain their services in connection with monitoring its investment in the Company, or as may otherwise be required by law, provided that the Purchaser takes reasonable steps to minimize the extent of any such required disclosure.
7.3 INSPECTION RIGHTS. The Company shall permit, and shall cause each of
its Subsidiaries to permit, any representative designated by the Purchaser, at
the Purchaser's expense, upon reasonable notice and during normal business
hours, to: (i) visit and inspect any of the assets or properties of the Company
and its Subsidiaries, (ii) examine the business and financial records of the
Company and its Subsidiaries and make copies thereof or extracts therefrom and
(iii) discuss the affairs, finances and accounts of any such entities with the
officers, key employees and independent accountants (to the extent they are
permitted under internal policy) of the Company and its Subsidiaries; provided,
however, that the Company and its Subsidiaries shall not be obligated to provide
access to any information (a) which the Company reasonably believes to be a
trade secret or similar confidential information, (b) which the Company is
prohibited from disclosing pursuant to an agreement with a third party, or (c)
if access to such information could adversely affect the attorney-client
privilege between the Company and its counsel or its Subsidiaries and such
Subsidiary's counsel.
ARTICLE VIII
MATURITY, INTEREST AND PREPAYMENT
8.1 MATURITY. All amounts outstanding under the Note shall be due and payable in full in cash, if not earlier paid in accordance with this Agreement, on the Maturity Date.
8.2 INTEREST. Interest ("Interest") shall accrue at the rate of seventeen
percent (17%) per annum (computed on the basis of a three hundred sixty (360)
day year and the actual number of days elapsed in any year) on the unpaid
principal amount of the Note outstanding from time to time from and including
the date of issuance until the date paid, or (if less) at the highest rate then
permitted under applicable law. The Company shall pay Interest on the unpaid
principal amount of the Note on each Interest Payment Date as follows: (i)
Interest at a rate of seventeen percent (17%) per annum (computed on the basis
of a three hundred sixty (360) day year and the actual number of days elapsed in
any year) shall be paid-in-kind (the "PIK Interest"), provided, however, that
the Company, in its sole discretion, may elect to pay all or a portion of such
Interest in cash to the extent permitted under the terms of the Indenture and
(ii) to the extent that the Company makes such election in clause (i), any
remaining Interest not paid in cash shall be PIK Interest. Any PIK Interest that
is paid shall be capitalized, compounded and added to the then unpaid principal
amount of the Note as of each Interest Payment Date.
8.3 PREPAYMENT AT THE OPTION OF THE PURCHASER. At any time after the six
(6) month anniversary of the Senior Notes Payment Date, the Purchaser shall have
the right (the "Prepayment Option") to demand prepayment of, and upon such
demand the Company must prepay, the Note for an amount in cash equal to the then
outstanding principal amount of the
Note held by such Holder subject to such demand for prepayment plus all of the accrued and unpaid interest on such Note to the date of such prepayment. The Prepayment Option shall be exercisable upon delivery of a written notice (the "Prepayment Option Notice") by the Purchaser to the Company. The Prepayment Option Notice shall specify the date of prepayment, which shall not be earlier than twenty (20) Business Days after the Company's receipt of the Prepayment Option Notice.
8.4 MANDATORY PREPAYMENTS. The occurrence of a Change of Control Event shall give any Holder of the Note, at its option, the right to demand prepayment of, and upon such demand the Company must prepay, the Note for an amount in cash equal to 101% of the then outstanding principal amount of the Note held by such Holder subject to such demand for prepayment plus all of the accrued and unpaid interest on such Note to the date of such prepayment (a "Mandatory Prepayment"), such prepayment being due on the effective date of the Change of Control Event. The Company agrees to give the Holder(s) of the Note written notice of a Change of Control Event (specifying the details thereof, to the extent known), as soon as reasonably practical after the Company has made a good faith determination that a Change of Control Event is reasonably likely to occur, but in any event not less than 30 days prior to the effective date of the Change of Control Event (the "Change of Control Notice"), and further to provide prompt written notice of any material change in the terms of any such Change of Control Event. The prepayment option described above may be exercised by such Holder's giving the Company written notice to that effect (the "Prepayment Notice") not more than 15 days after the Company sends the Change of Control Notice. The Prepayment Notice shall specify the date of prepayment which date shall not be earlier than the date of the Change of Control Event. The Prepayment Notice can be revoked any time prior to the date of prepayment if a material change occurs in the terms of the Change of Control Event.
8.5 OPTIONAL PREPAYMENTS. The Company may, at its option, prepay the Note
in whole or in part at any time and from time to time by giving written notice
thereof to the Holder of the Note not less than 30 nor more than 60 days prior
to the date fixed for such prepayment in such notice (an "Optional Prepayment"),
provided that there is no Event of Default continuing and such Optional
Prepayment does not cause a Default or Event of Default. Each such prepayment
(other than a prepayment in full) shall be in an aggregate amount not less than,
and shall be in increments of, $250,000. Each Optional Prepayment shall be made
by delivering to the Holder of the Note the principal amount to be prepaid
together with accrued and unpaid interest on such principal amount to the date
of prepayment, plus any applicable prepayment premium as set forth in Section
8.6. All notices of prepayment shall specify the amount to be prepaid, together
with the premium (if any) to be paid thereon and the date fixed for such
prepayment.
8.6 PREPAYMENT PREMIUMS. In the event of any Optional Prepayment, the following premiums shall be paid in addition to the amount of the prepayment required by such Optional Prepayment:
(a) for any Optional Prepayment occurring on or prior to the second anniversary of the Closing Date, six percent (6%) of the principal amount to be prepaid;
(b) for any Optional Prepayment occurring after the second anniversary of the Closing Date but on or prior to the third anniversary of the Closing Date, five percent (5%) of the principal amount to be prepaid;
(c) for any Optional Prepayment occurring after the third anniversary of the Closing Date but on or prior to the fourth anniversary of the Closing Date, four percent (4%) of the principal amount to be prepaid;
(d) for any Optional Prepayment occurring after the fourth anniversary of the Closing Date but on or prior to the fifth anniversary of the Closing Date, three percent (3%) of the principal amount to be prepaid;
(e) for any Optional Prepayment occurring after the fifth anniversary of the Closing Date but on or prior to the sixth anniversary of the Closing Date, two percent (2%) of the principal amount to be prepaid;
(f) for any Optional Prepayment occurring after the sixth anniversary of the Closing Date but on or prior to the seventh anniversary of the Closing Date, one percent (1%) of the principal amount to be prepaid; and
(g) for any Optional Prepayment occurring after the seventh anniversary of the Closing Date, there shall be no premium payable by the Company.
8.7 PAYMENT SET ASIDE. If and to the extent the Company makes a payment or payments to the Purchaser hereunder or under the Note or the Purchaser enforces its rights or exercises its right of setoff, and such payment or payments or the proceeds of such enforcement or setoff or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by, or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver, or any other Person under any law (including any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.
ARTICLE IX
AFFIRMATIVE COVENANTS
9.1 COMPLIANCE WITH LAWS. The Company shall use commercially reasonable efforts to comply, and shall cause each Subsidiary of the Company to comply, in all material respects with the requirements of all applicable laws, rules, regulations and orders of any Governmental Authority.
9.2 MAINTENANCE OF ASSETS; EXISTENCE. The Company shall use commercially reasonable efforts to, and shall cause each Subsidiary of the Company to use commercially reasonable efforts to, (i) maintain and preserve all of its Assets which are necessary or useful in the proper conduct of their businesses in good working order and condition, ordinary wear and tear excepted, and (ii) preserve and keep in full force and effect each of the Company's and each
of its Subsidiary's valid corporate existence and good standing and any rights and franchises material to their businesses.
9.3 FEES AND EXPENSES.
(a) The Company shall pay the Purchaser a closing fee of $280,000 in connection with the transactions contemplated by the Loan Documents, which fee shall be payable on the Closing Date and shall be contingent upon the consummation of the transactions contemplated by the Loan Documents.
(b) The Company shall bear all of its own expenses in connection with this Agreement and the other Loan Documents, and the transactions contemplated hereby and thereby. The Company shall pay and reimburse the Purchaser on demand as and when incurred: (i) all reasonable costs and expenses incurred by the Purchaser in connection with its due diligence review of the Company and its Subsidiaries, the preparation, negotiation, execution and interpretation of this Agreement, the Note and the other agreements contemplated hereby and thereby, and the consummation of all of the transactions contemplated hereby and thereby (including reasonable fees and expenses of its legal counsel), which costs and expenses shall be payable at the Closing; provided, however, that if the Closing does not occur, the Company shall not be obligated to reimburse the Purchasers pursuant to this Section 9.3(b), (ii) all reasonable fees and expenses incurred with respect to any amendments or waivers (whether or not the same become effective) under or in respect of each of the Loan Documents and the other agreements and instruments contemplated hereby and thereby, and (iii) the reasonable fees and expenses incurred with respect to the interpretation and enforcement of the rights granted in the Loan Documents (including costs of collection).
9.4 USE OF PROCEEDS. The Company agrees to use the proceeds from the sale of the Note to (a) pay the consideration required by the Acquisition Agreements and transaction expenses related thereto, and (b) for general business purposes, including working capital.
ARTICLE X
NEGATIVE COVENANTS
10.1 CONDUCT OF BUSINESS. The Company will not engage in any business other than Permitted Businesses.
10.2 DIVIDENDS AND DISTRIBUTIONS. The Company shall not (i) declare or pay any dividend or make any other distribution (by reduction of capital or otherwise), whether in cash, property, securities or a combination thereof, with respect to any of its capital stock or directly or indirectly redeem, purchase, retire or otherwise acquire for value with respect to any of its capital stock or set aside any amount for any such purpose; provided, however, that the Company may pay dividends to the holders of Series A Preferred Stock and Common Stock so long as all amounts then due and payable under the Note are paid in cash in full, including all accrued and unpaid interest and any PIK Interest that has been added to the unpaid principal amount of the Note, and there is no Event of Default at the time of such payment, and (ii) make any payment of any management fee; provided, however, that the Company may pay the management fees
pursuant to, and accordance with, the Management Agreement so long as the Company pays 12% of the Interest in cash for the Fiscal Year in which the management fee is paid and there is no Event of Default at the time of such payment.
10.3 TRANSACTIONS WITH AFFILIATES. The Company shall not enter into or maintain, or permit any Subsidiary of the Company to enter into or maintain, any transaction or agreement with its Affiliates or any of its Subsidiaries' Affiliates, except as otherwise permitted under the Senior Credit Agreement as in effect on the date hereof (it being understood that the Company shall be deemed a "Borrower" under the Senior Credit Agreement solely for purposes of interpreting this Section 10.3).
10.4 REGULATION U AND X. The Company shall not, and shall not permit any of the Subsidiaries to, use or permit any proceeds of the purchase price of the Note to be used, either directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of "purchasing or carrying margin stock" within the meaning of Regulations U and X of the Board of Governors of the Federal Reserve System, as amended from time to time.
ARTICLE XI
EVENTS OF DEFAULT
11.1 EVENTS OF DEFAULT DEFINED; ACCELERATION OF MATURITY. If any one or more of the following events (herein called "Events of Default") shall have occurred:
(a) the Company fails to pay when due and payable (whether at maturity or otherwise) the full amount of any principal payment (together with any applicable premium) on the Note, the full amount of interest then accrued on the Note or any other amounts payable under this Agreement or the Note, an Event of Default shall occur if such payment has not been made prior to ten (10) Business Days after the date such payment is due;
(b) any representation, statement or warranty made or deemed made by the Company in any Loan Document or in any other certificate, document or report delivered to the Purchaser by the Company in conjunction with any Loan Document, shall not be true and correct in all respects or shall have been false or misleading in any respect on the date when made or deemed to have been made except those made as of a specific date (without giving effect to any materiality or Material Adverse Effect qualifier), to the extent such breaches could reasonably be likely to have, individually or in the aggregate, a Material Adverse Effect;
(c) (i) if the Company fails to perform, keep or observe any term, provision, condition, covenant or agreement contained in Article X and Sections 9.3 and 9.4, (ii) if the Company fails to perform, keep or observe any term, provision, condition, covenant or agreement contained in Sections 7.1, 7.2(a), 7.2(b), 7.2(c), 7.2(d), 7.2(e), 7.2(h), 7.2(i) and 7.3 and such failure continues for a period of five (5) Business Days, (iii) if the Company fails to perform, keep or observe any term, provision, condition, covenant or agreement contained in Sections 7.2(f), 7.2(g) and Article IX (other than Section 9.3 and 9.4) and such failure continues for a period of ten (10) Business Days, or (iv) if the Company fails to perform, keep or observe
any other term, provision, condition, covenant or agreement contained in this Agreement or in any other Loan Document, and such failure continues for a period of sixty (60) days;
(d) if an Insolvency Proceeding is commenced by the Company or any of its Subsidiaries;
(e) if an Insolvency Proceeding is commenced against the Company or Altra, and any of the following events occur: (i) the Company or Altra consents to the institution of such Insolvency Proceeding against it; (ii) the petition commencing the Insolvency Proceeding is not timely controverted; (iii) the petition commencing the Insolvency Proceeding is not dismissed within sixty (60) days of the date of filing thereof; (iv) an interim trustee is appointed to take possession of all or any substantial portion of the properties or assets of, or to operate all or any substantial portion of the business of, the Company or Altra; or (v) an order for relief shall have been entered therein;
(f) if the Company or Altra is enjoined, restrained, or in any way prevented by court order from continuing to conduct all or any material part of its business affairs; and
(g) the Company or Altra makes a general assignment for the benefit of its creditors, or admits in writing its inability to pay its debts generally as they become due, or consents to the appointment of a receiver, conservator, custodian, liquidator or trustee of the Company or any Subsidiary, or of all or any part of the assets of any of them;
then, when any Event of Default described in clause (a), (b), (c) or (f) above has occurred and shall be continuing, the principal of the Note and the interest accrued thereon and all other amounts due hereunder (the "other payments") shall, upon written notice from the holder of the Note, forthwith become and be due and payable, if not already due and payable, without presentment, further demand or other notice of any kind. When any Event of Default described in clause (d), (e) or (g) above has occurred, the principal of the Note, the interest accrued thereon and the other payments shall immediately become due and payable, upon the occurrence thereof, without presentment, demand, or notice of any kind.
11.2 SUITS FOR ENFORCEMENT. If any Event of Default specified in Section 11.1 above has occurred and is continuing, the Purchaser may proceed to protect and enforce such holder's rights either by suit in equity or by action at law, or both, whether for the specific performance of any covenant or agreement contained in this Agreement, or in aid of the exercise of any power granted in this Agreement, or to enforce any other legal or equitable right or remedy of the Purchaser.
11.3 INDEMNIFICATION. The Company shall indemnify, defend and hold the
Purchaser, its Controlled Affiliates (other than limited partners or members),
officers and agents harmless from, against and in respect of any and all claims,
demands, losses, costs, expenses, obligations, liabilities, damages, recoveries
and deficiencies, including interest, penalties and reasonable attorneys' fees
(collectively, "claims"), that the Purchaser shall incur or suffer, which arise,
result from, or relate to (i) the Acquisition, (ii) the execution, delivery,
performance or enforcement of this Agreement or any of the Loan Documents, and
(iii) any breach of, or failure
by the Company or any Subsidiary of the Company to perform, any of its representations, warranties, covenants or agreements in this Agreement or the other Loan Documents.
11.4 DELAYS OR OMISSIONS. No failure to exercise or delay in the exercise of any right, power or remedy accruing to the Purchaser upon any breach or default of the Company under this Agreement shall impair any such right, power or remedy of the Purchaser nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring.
11.5 REMEDIES CUMULATIVE. All remedies under either this Agreement, the Note, by law or otherwise, afforded to the Purchaser shall be cumulative and not alternative.
ARTICLE XII
MISCELLANEOUS
12.1 CONSENT TO AMENDMENTS; WAIVERS. Except as otherwise expressly provided herein, the provisions of this Agreement may be amended or waived at any time only by the written agreement of the Company and the Purchaser. Any waiver, permit, consent or approval of any kind or character on the part of such holder of any provisions or conditions of this Agreement must be made in writing and shall be effective only to the extent specifically set forth in such writing.
12.2 SURVIVAL OF TERMS. All representations, warranties and covenants contained herein shall survive the execution and delivery of this Agreement and any investigation made at any time by or on behalf of any party hereto.
12.3 SUCCESSORS AND ASSIGNS.
(a) The Company shall not assign all or any portion of the Note and its rights and obligations hereunder and thereunder, except for an assignment to Altra; provided that Altra shall become a party to the Loan Documents and, to the extent that rights and obligations hereunder have been assigned to it, shall have the rights and obligations of the Company under the Loan Documents.
(b) Any Holder may assign all or a portion of its Note and its rights
and obligations hereunder and thereunder to (i) any Affiliate of such Holder and
(ii) any Person that is reasonably acceptable to the Company; provided, however,
that (a) the Company's consent shall not be required under clause (ii) above
during an Event of Default and (b) in the event of a proposed assignment
pursuant to clause (ii) above, the Company or its Affiliates shall have a right
of first refusal to purchase all or a portion of the Note which the Holder
proposes to assign on the same terms and conditions as the proposed assignment
by the Holder pursuant to clause (ii) above. No assignment pursuant to the
immediately preceding sentence shall be in an aggregate amount less than
$500,000 unless the entire loan of the assigning Holder is so assigned. If any
Holder so sells or assigns all or a part of its rights hereunder or under any
Note, any reference in this Agreement or in such Note to such assigning Holder
shall thereafter refer to such Holder and to the respective assignee to the
extent of their respective interests and the
respective assignee shall have, to the extent of such assignment (unless otherwise provided therein), the same rights and benefits as it would if it were such assigning Holder. Each assignment pursuant to this Section 12.3(b) shall be effected by (1) the assigning Holder and the assignee Holder executing an assignment agreement in form and substance reasonably acceptable to such Holders and the Company, (2) delivering such assignment agreement to the Purchaser and giving the Company and the Purchaser written notice thereof, and (3) the Register (as hereinafter defined) being updated pursuant to Section 12.3(c). Each assigning Holder shall deliver its Note to the Company, who shall cancel such Note, and the Company shall deliver a new Note to the assignee Holder and, if applicable, to the assigning Holder. Each Holder and the Company agree to execute such documents (including, without limitation, amendments to this Agreement and any other applicable documents) as shall be necessary to effect the foregoing. Any Holder may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Holder and this Section 12.3 shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Holder from any of its obligations hereunder or substitute any such assignee for such Holder as a party hereto.
(c) The Company hereby designates the Purchaser to serve as its agent,
solely for purposes of this Section 12.3(c), to maintain a register (the
"Register"), on which it will record from time to time the loans made hereunder
by each of the Holders, each repayment in respect of the principal amount of,
and interest on, each loan of each Holder. Failure to make any such recordation,
or any error in such recordation, shall not affect the Company's obligations in
respect of such loans. With respect to any Holder, the assignment of the rights
to all or part of the principal of, and interest on, any loan made hereunder (i)
shall not be effective until such assignment is recorded on the Register
maintained by the Purchaser with respect to ownership of such loans and until
the other requirements pursuant to Section 12.3(b) are met and (ii) prior to
such recordation and other requirements being met shall remain owing to the
transferor. The registration of assignment of all or part of any Note shall be
recorded by the Purchaser on the Register only upon the acceptance by the
Purchaser of a properly executed and delivered assignment agreement pursuant to
Section 12.3(b).
(d) Each Holder must, if legally able to do so, furnish the Company with a properly executed IRS Form W-9 or W-8, as applicable, establishing a complete exemption from U.S. withholding taxes on all payments made under the Note.
12.4 SEVERABILITY. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement unless the consummation of the transaction contemplated hereby is materially adversely affected thereby.
12.5 DESCRIPTIVE HEADINGS. The descriptive headings of this Agreement are inserted for convenience of reference only and do not constitute a part of and shall not be utilized in interpreting this Agreement.
12.6 NOTICES. Any notices required or permitted to be sent hereunder shall be delivered personally or mailed, certified mail, return receipt requested and postage prepaid, or delivered by commercial overnight courier service, with charges prepaid, to the following addresses, or such other address as any party hereto designates by written notice to the Company, and shall be deemed to have been given upon delivery, if delivered personally, three (3) days after mailing, if mailed, or one business day after delivery to the courier, if delivered by overnight courier service:
If to the Company, to:
Altra Holdings, Inc.
c/o Genstar Capital Partners III, L.P.
Four Embarcadero Center, Suite 1900
San Francisco, CA 94111-4191
Attention: Jean-Pierre L. Conte Facsimile: (415) 834-2383
with a copy to:
Weil, Gotshal & Manges LLP
201 Redwood Shores Parkway
Redwood Shores, CA 94065
Attention: Curtis L. Mo
Craig W. Adas
Facsimile: (650) 802-3100
If to the Purchaser, to:
Caisse de depot et placement du Quebec
1000, place Jean-Paul-Riopelle
Montreal (Quebec) H2Z 2B3
Attention: Luc Houle
Facsimile: (514) 847-2493
with a copy to:
Kirkland & Ellis LLP
153 E. 53rd Street
New York, NY 10022
Attention: Kimberly P. Taylor
Facsimile: (212) 446-6460
Any party may change the address to which notices to it are to be sent by written notice given to the other parties hereto.
12.7 GOVERNING LAW. All questions concerning the construction, validity and interpretation of this Agreement and the exhibits and schedules hereto shall be governed by the
internal law, and not the law of conflicts, of the State of New York, applicable to contracts made and wholly to be performed in that state.
12.8 EXHIBITS AND SCHEDULES. All exhibits and schedules hereto are an integral part of this Agreement.
12.9 EXCHANGE, TRANSFER, OR REPLACEMENT OF SECURITIES.
(A) Upon surrender by any Holder to the Company of any instrument evidencing a Note, together in each case with a duly executed assignment, the Company, at its own expense, will issue in exchange therefor and deliver to such Holder, a new instrument(s) evidencing such Note that is being exchanged, in such denominations as may be requested by the Holder. Upon surrender for transfer of the Note, the Company, at its own expense will execute and deliver, in the name of the transferee designated by the then holder of the Note, one or more notes of the same type and of a like aggregate principal amount. All notes issued upon any exchange or transfer, upon issuance, will be the legal and valid obligations of the Company, evidencing the same debt, and entitled to the same benefits as the note surrendered for transfer or exchange.
(B) Upon receipt of evidence satisfactory to the Company of the loss, theft, destruction or mutilation of any Note and such other documents that the Company may reasonably request, the Company at its expense, will issue and deliver to the Holder a new Note of like tenor, in lieu of such lost, stolen, destroyed or mutilated security. Any new Note issued in exchange for, or upon the loss, theft or destruction of the Note, all as provided herein, shall be in substantially the form of the Note so exchanged, lost, stolen or destroyed.
12.10 FINAL AGREEMENT. This Agreement, together with the other Loan Documents, and all the documents and certificates delivered herewith or therewith, constitute the final agreement of the parties concerning the matters referred to herein, and supersedes all prior agreements and understandings (whether written or oral).
12.11 EXECUTION IN COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, and such counterparts together shall constitute one instrument.
12.12 NO SETOFFS, ETC. All payments hereunder and under the Note shall be made by the Company without setoff, offset, deduction or counterclaim, free and clear of all taxes, levies, imports, duties, fees and charges, and without any withholding, restriction or conditions unless imposed by any Governmental Authority. If the Company shall be required by any law to deduct, setoff or withhold any amount from or in respect of any payment to the Purchaser or any Holder hereunder or under the Note, then within fifteen (15) days after notice and demand from the Purchaser or such Holder, the Company shall pay to the Purchaser or such Holder an amount sufficient to compensate the Purchaser or such Holder for such deduction, setoff or withholding. No payment amount shall be paid to the Purchaser or any Holder under the preceding sentence if such Purchaser has not furnished to the Company, at the time such person becomes a party to this Agreement or a Holder of the Note, a properly executed IRS Form W-9 or W-8, as applicable,
establishing a complete exemption from U.S. withholding taxes on payments made under the Note.
12.13 CONSTRUCTION. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. The parties intend that each representation, warranty, and covenant contained herein shall have independent significance. If any party has breached any representation, warranty or covenant contained herein in any respect or any Event of Default shall occur, the fact that there exists another representation, warranty or covenant or Event of Default relating to the same subject matter (regardless of the relative levels of specificity) which such party has not breached shall not detract from or mitigate the fact that such party is in breach of the first representation, warranty or covenant or that the first Event of Default shall have occurred.
12.14 FURTHER COOPERATION. At any time and from time to time, and at its own expense, the Company shall promptly execute and deliver all such documents and instruments, and do all such acts and things, as the Purchaser may reasonably request in order to further effect the purposes of this Agreement.
12.15 WAIVERS BY THE COMPANY. EXCEPT AS OTHERWISE PROVIDED FOR IN THIS AGREEMENT OR AS REQUIRED BY APPLICABLE LAW, THE COMPANY HEREBY WAIVES: (I) PRESENTMENT, DEMAND AND PROTEST, AND NOTICE OF PRESENTMENT WITH RESPECT TO THIS AGREEMENT OR THE NOTE AND (II) ITS RIGHT TO A JURY TRIAL IN THE EVENT OF ANY LITIGATION INSTITUTED IN RESPECT OF THIS AGREEMENT, THE NOTE OR ANY OF THE OTHER LOAN DOCUMENTS. THE COMPANY ACKNOWLEDGES THAT THE FOREGOING WAIVERS ARE A MATERIAL INDUCEMENT TO THE PURCHASER'S ENTERING INTO THIS AGREEMENT AND THAT THE PURCHASER IS RELYING UPON THE FOREGOING WAIVERS IN ITS FUTURE DEALINGS WITH THE COMPANY. THE COMPANY WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THE FOREGOING WAIVERS WITH ITS LEGAL COUNSEL AND HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK. SIGNATURE PAGE FOLLOWS.]
IN WITNESS WHEREOF, the parties hereto have executed this Note Purchase Agreement on the date first set forth above.
ALTRA HOLDINGS, INC.
CAISSE DE DEPOT ET PLACEMENT DU QUEBEC
EXHIBIT 4.13
DRAFT 7/21/04; NOT A
COMMITMENT; SUBJECT TO
DUE DILIGENCE AND
CREDIT COMMITTEE
REVIEW AND APPROVAL;
FOR DISCUSSION PURPOSES
ONLY
THE SECURITY REPRESENTED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR REGISTERED OR QUALIFIED UNDER ANY APPLICABLE STATE SECURITIES LAW AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE ASSIGNED EXCEPT IN COMPLIANCE WITH THE REGISTRATION REQUIREMENTS OF SUCH ACT AND THE REGISTRATION OR QUALIFICATION REQUIREMENTS OF SUCH STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION AND QUALIFICATION.
PROMISSORY NOTE
U.S. $14,000,000 November 30, 2004
FOR VALUE RECEIVED, the undersigned, ALTRA HOLDINGS, INC., a Delaware corporation (the "COMPANY"), hereby promises to pay to CAISSE DE DEPOT ET PLACEMENT DU QUEBEC, a Quebec corporation (the "PURCHASER"), the aggregate principal amount of $14,000,000 (FOURTEEN MILLION DOLLARS) in lawful money of the United States of America in immediately available funds, with interest thereon, all at times and in the manner set forth in the Note Purchase Agreement, dated as of November 30, 2004, by and between the Company and the Purchaser (as such agreement may be amended, restated or otherwise modified from time to time, the "PURCHASE AGREEMENT"). Capitalized terms used but not defined herein shall have the meanings given to such terms in the Purchase Agreement.
1. INTEREST AND INTEREST PAYMENTS. The Company promises to pay interest on the outstanding principal amount of this Promissory Note (this "NOTE") from the date hereof pursuant to, and as required by, the Purchase Agreement. Any cash payments of interest and/or principal or other amounts due under this Note shall be made only by wire transfer on the date when due, without deduction, offset or counterclaim, in U.S. dollars, in immediately available funds as required in the Purchase Agreement.
2. MATURITY AND PRINCIPAL PAYMENTS. Unless earlier due and payable in accordance with the Purchase Agreement, this Note shall mature, and all amounts outstanding hereunder, shall become due and payable in full on the Maturity Date.
The Company shall make payments on the principal amount outstanding hereunder as required pursuant to the Purchase Agreement.
3. PURCHASE AGREEMENT. This Note is referred to in, made pursuant to, and entitled to the benefits of, the Purchase Agreement. The Purchase Agreement, among other things, (i) provides for the making of the loan by the Purchaser to the Company in the aggregate principal amount first mentioned above, (ii) contains provisions for the acceleration of the maturity of this Note upon the happening of certain stated events upon the terms and conditions therein specified, and (iii) contains provisions defining an Event of Default and the rights and remedies of the parties thereto.
4. PREPAYMENTS. This Note may be prepaid in whole or in part only as permitted in the Purchase Agreement.
5. PAYMENTS DUE ON A DAY OTHER THAN A BUSINESS DAY. If any payment to be made on or under this Note is stated to be due or becomes due and payable on a day other than a Business Day, the due date thereof shall be extended to, and such payment shall be made on, the next succeeding Business Day, and such extension of time in such case shall be included in the computation of payment of any interest (at the interest rate then in effect during such extension) and/or fees, as the case may be.
6. WAIVERS. The Company hereby agrees that the provisions of the Purchase Agreement relating to waivers, and rights and remedies of the parties thereto shall apply to this Note.
7. LAWFUL LIMITS. This Note is expressly limited so that in no contingency or event whatsoever, whether by reason of acceleration or otherwise, shall the interest and other charges paid or agreed to be paid by the Company for the use, forbearance or detention of money hereunder exceed the maximum rate permissible under applicable law which a court of competent jurisdiction shall, in a final determination, deem applicable hereto. If, due to any circumstance whatsoever, fulfillment of any provision hereof, at the time performance of such provision shall be due, shall exceed any such limit, then, the obligation to be so fulfilled shall be reduced to such lawful limit, and any interest or any other charges of any kind received which might be deemed to be interest under applicable law in excess of the maximum lawful rate, then such excess shall be applied in accordance with the Purchase Agreement.
8. GOVERNING LAW. This Note shall be governed by and construed in accordance with the internal laws of the State of New York without giving effect to its choice of laws provisions.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, this Note is executed as of the date first written above.
ALTRA HOLDINGS, INC.
a Delaware corporation
EXHIBIT 10.8
BASIC AGREEMENT
BETWEEN
Warner Electric, LLC
and
United Steelworkers
and
Local Union No. 3245
For Contract Years
May 17, 2006 through February 1, 2009
WARNER ELECTRIC BRAKE SAFETY POLICY
- Safety is our first priority. Safety concerns must be managed before other business concerns can be successfully accomplished.
- Working safely is a condition of employment. All employees are required to work safely and follow all safety rules and regulations.
- No job is so important that it cannot be done safely. Safety precautions must be taken before and during any job.
- All injuries can be prevented. With management taking responsibility to ensure a safe environment and all of us working safely, this is a realistic goal.
- Every employee is responsible for preventing injuries. When we all work safely, act safely, and report any unsafe condition, we are doing our part to prevent injuries.
- Training employees to work safely is essential. For every employee to be responsible for safety, he/she must know what safe conditions, acts, and operations are. To achieve that level of understanding, appropriate training will be given.
- All operating exposures can be safeguarded. To ensure safe working conditions, all areas or points that are dangerous and cannot be practically eliminated, will be safeguarded by way of safety devices, warnings, guards, personal protective equipment or other appropriate means.
INDEX
Article Page ------- ---- I Intent, Purpose and Scope of Agreement 5 II Recognition 5 III Hours of Work 7 IV Overtime and Allowed Time 7 Holidays - Paragraph 26 8 Overtime Distribution - Paragraph 30 9 Call-In/Report-In Pay - Paragraph 34 10 Bereavement Pay - Paragraph 35 10 V Vacations 11 VI Seniority 13 General 13 Rule for Applying Seniority 14 Seniority Defined 14 Transfer of Seniority 14 Decrease in Forces 14 Recall to Occur As Follows 16 Loss of Seniority 17 Probationary Period 18 Information to the Union 18 Shift/Job Transfers 19 Temporary Transfer 19 Job Posting 19 VII Military Service 20 VIII Leave of Absence 20 Jury Service - Paragraph 81 21 IX Adjustment of Grievances 21 To File a Grievance - Paragraph 86 22 Suspension - Paragraph 102 24 X Bulletin Boards 25 XI Wages 25 Job Descriptions/Evaluations - Paragraph 106 25 Temporary Transfer Rate - Paragraph 116 26 Shift Differential - Paragraph 117 26 XII Cost-of-Living 27 XIII Safety and Health 29 XIV Insurances and Pensions 31 XV Severance Allowance 31 XVI Termination, Expiration and Scope 32 XVII Compliance with Law 33 Appendix A - Classification by Pay Rate 37 Appendix B - Rate Retention Groups 39 Appendix C - Overtime Distribution Agreement 39 Appendix D - Overtime Groups 42 Appendix E - Insurances 43 Insurance Agreement 45 |
NOTICE TO ALL EMPLOYEES
WHEN UNABLE TO
REPORT FOR WORK
CALL
(815) 389-4300
OR YOUR SUPERVISOR'S
DIRECT PHONE NUMBER.
THIS WILL ENABLE THE
COMPANY TO ACCURATELY
MAINTAIN YOUR
ATTENDANCE RECORD.
TO LEAVE AN EMERGENCY MESSAGE
CALL
(815) 389-7777
LEAVE YOUR NAME, TELEPHONE #,
AND MESSAGE AND HANG UP.
YOUR EMERGENCY MESSAGE WILL BE
RESPONDED TO.
AGREEMENT
1. This Agreement is made and entered into May 17, 2006 by and between WARNER ELECTRIC, LLC, or its successors or assigns, (hereinafter referred to as the "COMPANY") and the UNITED STEELWORKERS (hereinafter referred to as the "UNION") on behalf of itself and Local Union No. 3245. The Company will furnish each present or new employee with a copy of this Agreement.
ARTICLE I
INTENT, PURPOSE AND SCOPE OF AGREEMENT
2. It is the intent and purpose of this Agreement to set forth herein the basic rules covering rates of pay, hours of work, and conditions of employment to be observed by the parties hereto. It is further understood and agreed that this Agreement together with any written appendices, supplements or letters of understanding hereto contains all understandings between the Company and the Union. This Agreement cannot be modified or amended except in writing signed by the Company and the Union. No individual shall have any right to modify, amend or revoke this Agreement.
3. This Agreement relates to the South Beloit plant of the Company located at 449 Gardner Street, South Beloit, Illinois.
4. The Company and Union will apply the provisions of this Agreement to all employees, without discrimination as to age (as provided in appropriate laws), sex, color, national origin, race or religion.
5. COOPERATION - The Union, the Company and all employees covered by this Agreement mutually agree to make every reasonable effort to maintain and improve the skill, efficiency, ability, and production of all employees, the quality of products, the methods and facilities of production, and to eliminate accidents, waste, conserve material and supplies and improve quality of workmanship.
ARTICLE II
RECOGNITION
6. The Company hereby recognizes the Union as the exclusive bargaining agent for all its production, maintenance, and service employees, excluding Sales Persons, Service Manager, Assistant Service Manager, Service School Instructors, office and plant clerical employees, technical employees, timekeepers, Industrial Engineering Department employees, security personnel, plant superintendents, assistant superintendents, supervisors, assistant supervisors, and other supervisory employees with authority to hire, promote, discharge, discipline or otherwise effect changes in the status of the employees, or effectively recommend such action, in all those matters specifically provided for herein pertaining to wages, hours, and working conditions.
7. The Union hereby recognizes that the Management of the plant and the direction of the working forces including the right to direct, plan, and control plant operations, and establish and change production schedules, the right to hire, promote, demote, transfer, suspend or discharge employees for proper cause, or to relieve employees because of lack of work or for other legitimate reasons, subject to the provisions of this Agreement, or the right to introduce new and improved methods or facilities, or to change existing production methods or facilities, and to manage the properties, is vested in the Company.
8. No employee shall engage in any activity not authorized by the Company, which shall interfere with production. This section shall not restrict the legitimate activities of the Shop Committee members pursuant to Article IX, Par. 97, Safety Committee members pursuant to Article XIII Par. 134, and the members of the Job Evaluation Committee, Worker's Compensation Committee, Civil Rights Committee, Group Insurance Committee, Pension Committee and Apprenticeship Committee as authorized by the appropriate Company representatives.
9. Any employee who is a member of the Union in good standing on the effective date of this Agreement shall, as a condition of employment, maintain membership in the Union to the extent of paying the periodic membership dues uniformly required of all Union members.
10. Any employee who, on the effective date of this Agreement, is not a member of the Union and any employee thereafter hired, shall, as a condition of employment, starting thirty (30) days after the effective date of this Agreement, or thirty (30) days following the beginning of their employment, whichever is the later, acquire and maintain membership in the Union to the extent provided in Paragraph 9 above.
11. The Union agrees that it will make membership in the Union available to all employees covered by this Agreement on the same terms and conditions as are generally applicable to other members of the Union. At the instance of the Company, termination of Union membership for reasons other than the failure of the employee to tender the dues, assessments and initiation fees specified in this Agreement, may be submitted to an impartial arbitrator under the grievance procedure of the Agreement for determination only as to whether such termination conforms to the Constitution of the United Steelworkers.
12. On receipt of a voluntary written assignment authorizing such deduction from the employee on whose account such deductions are made, the Company shall deduct union dues, initiation fee, and assessments in accordance with the Constitution of the United Steelworkers, as certified to the Company by the International Treasurer of the Union. The Company shall deduct Union dues on a weekly basis, based on the employee's earnings from that week. Any sum deducted by the Company pursuant to this paragraph shall be remitted promptly by it to the International Treasurer of the Union.
13. Should the International Treasurer of the Union certify to the Company in writing that changes in dues or initiation fees have been duly adopted by the United Steelworkers, during the term of this Agreement, the Company shall deduct the changed dues or initiation fees have duly adopted by the United Steelworkers, during the term of this Agreement, the Company shall deduct the changed dues or initiation fees in the manner provided in Par. 12.
14. The Union shall indemnify and hold the Company harmless against all suits, claims, demands and liabilities that shall arise out of or by reason of any action that shall be taken by the Company for the purpose of complying with these foregoing provisions or in the reliance on any list or certificate which shall have been furnished by the Company under these provisions.
15. During the life of this Agreement, the Union agrees that there will be no strikes, stoppages, or slowdowns; the Company agrees that there shall be no lockouts. Both parties promise and agree that they shall, in an endeavor to prevent such events from taking place, charge their representatives, committees, and agents with full responsibility for the performance of each and every promise and undertaking herein contained. No meetings of the Union's membership
shall be scheduled during regular working hours without mutual agreement of the parties in writing.
16. Except during an emergency, employees excluded from the provisions of this agreement shall not perform production or maintenance work. Instruction, engineering analysis, continuous improvement team activities, assistance in debugging machinery, product demonstrations, lab work, and safety and ergonomic evaluations do not constitute production or maintenance work.
ARTICLE III
HOURS OF WORK
17. This article defines the normal hours of work and shall not be construed as a guarantee of hours of work per day or per week. This Article shall not be considered as any basis for the calculation or payment of overtime, which is covered solely by Article IV, "Overtime."
18. The normal workday shall be eight (8) hours of work in a twenty-four (24) hour period. The hours of work shall be consecutive except when an unpaid lunch period is provided in accordance with prevailing practices.
19. Rest periods shall be provided and taken as follows:
First Shift: 9:30 a.m. to 9:45 a.m. - 15 minutes 12:30 p.m. to 12:40 p.m. - 10 minutes
Second Shift: 5:30 p.m. to 5:45 p.m. - 15 minutes 9:00 p.m. to 9:10 p.m. - 10 minutes Third Shift: 1:00 a.m. to 1:15 a.m. - 15 minutes 4:40 a.m. to 4:50 a.m. - 10 minutes |
On regular six (6) hour shifts on Saturday and Sunday, rest periods shall be provided and taken as follows:
All Shifts: Three (3) hours into the six (6) hour shift. - 15 minutes
except that rest periods shall be staggered by the Company where necessary to insure continuous production operations. Relief personnel will be assigned to the continuous production operation to provide the relief period for the operator.
20. The normal work pattern shall be five (5) consecutive workdays beginning at 12:01 a.m. Monday of each week, or at the time on Monday at which the employee begins work. Seven (7) consecutive days beginning at 12:01 a.m. Monday shall constitute a payroll week.
ARTICLE IV
OVERTIME AND ALLOWED TIME
21. This Article provides the basis for the calculation of, and payment for, overtime and shall not be construed as a guarantee of hours of work per day or per week, or a guarantee of days of work per week.
The payroll week shall consist of seven (7) consecutive days commencing at 12:01
a.m. Monday for the purpose of computing the pay of employees.
22. Time and one-half shall be paid for hours worked in excess of forty (40) hours in a payroll week; all contractual paid time and union time, shall for purposes of this provision, be treated as time paid.
23. Double time shall be paid for all hours worked on Sunday.
24. In all instances of premium pay for work on a day as such, the employee's entire shift shall be considered as having been worked on the day on which their shift is regularly scheduled to commence, except if the employee's first regular shift of the work week begins between 10:00 p.m. and 12:00 midnight on Sunday, during such week, each shift shall be considered as having been worked on the day their shift is scheduled to end.
25. Work performed by employees on their floating holiday, or on a Holiday, will be on a voluntary basis, and will be paid at double time plus holiday pay. The scheduling of floating holidays during the Christmas period will be at the employee's discretion.
26. Holidays
Contract Year 2006
April 14 - Good Friday (Friday)
May 29 - Memorial Day (Monday)
July 3 - Day Before Independence Day (Monday)
July 4 - Independence Day (Tuesday)
September 4 - Labor Day (Monday)
November 23 - Thanksgiving (Thursday)
November 24 - Day after Thanksgiving (Friday)
December 24 - Christmas Eve (Sunday) Celebrated December 25
December 25 - Christmas Day (Monday) Celebrated December 26
December 31 - New Years Eve (Sunday) Celebrated January 1
January 1, 2007 - New Years Day (Monday) Celebrated January 2
Contract Year 2007
April 6 - Good Friday (Friday)
May 28 - Memorial Day (Monday)
July 4 - Independence Day (Wednesday)
September 3 - Labor Day (Monday)
November 22 - Thanksgiving (Thursday)
November 23 - Day after Thanksgiving (Friday)
December 24 - Christmas Eve ( Monday)
December 25 - Christmas Day (Tuesday)
December 31 - New Years Eve (Monday)
Jan. 1, 2008 - New Year's Day (Tuesday)
CONTRACT YEAR 2008
March 21 - Good Friday (Friday)
May 26 - Memorial Day (Monday)
July 4 - Independence Day (Friday)
September 1 - Labor Day (Monday)
November 27 - Thanksgiving (Thursday)
November 28 - Day after Thanksgiving (Friday)
December 24 - Christmas Eve (Wednesday)
December 25 - Christmas Day (Thursday)
December 31 - New Years Eve (Wednesday)
January 1, 2009 - New Years Day (Thursday)
One (floating) holiday to be scheduled in accordance with current vacation scheduling process and paid as 8 hr. of classification rate as holiday pay for employees hired on or before May 17, 2006.
27. The regular earned hourly rate shall be the average straight time hourly earnings for the day on which the overtime was worked. The "average straight time hourly earnings" shall be the employee's total straight time hourly earnings for the day, divided by the actual hours worked for the day (including any hours paid for under a guarantee of hours). Overtime rates as outlined above shall be paid the employees for such hours worked in the following manner:
(A) Time and one-half shall be one and one-half times the regular earned hourly rate of the employee.
(B) Double time shall be twice the regular earned hourly rate of the employee.
28. The overtime and/or the premium payments provided for in this Article shall not be duplicated for the same hours worked and to the extent that hours are compensated for at overtime or premium rates under one provision, they shall not be counted as hours worked in determining overtime or premium pay under the same or any other provisions.
29. When two or more rules are applicable, the one more favorable to the employee will apply, but nothing contained herein shall be construed to require or permit the pyramiding of premium and/or overtime rates.
30. Both parties agree that overtime shall be worked when necessary to permit the proper operation of the Company. Overtime will be distributed among employees in the overtime distribution groups identified in Appendix C, which groups may be changed from time to time in recognition of new or revised job classification and new or revised cost centers, subject to the grievance procedure.
31. Holidays defined in Par. 26 of this Article will be paid for at the employee's classification rate and the Cost-of-Living adjustment if not worked.
32. During the term of this Agreement the days (defined above) will be paid holidays. To qualify for holiday pay, an employee must have completed the first thirty (30) calendar days of their probationary period and must have worked their assigned shift on their last scheduled workday before the holiday (which may not be mandated to exceed 8 hours) and their assigned shift on their first scheduled workday following the holiday. In cases of holidays which are observed on Friday or Monday, neither the adjoining Saturday nor the adjoining Sunday shall be considered as a "scheduled work day before" nor a "scheduled work day after" the holiday for purposes of qualifying for holiday pay, and work on such Saturday or Sunday shall be voluntary except that concerted refusal of such overtime work and failure to work by an employee who had agreed to work shall be disciplinable offenses. If an employee desires to be absent from work the scheduled work day before or after a holiday, they must give reasonable notice prior to the holiday; provided, however, if they are absent from work the scheduled work day before or after a
holiday due to circumstances beyond their control, they will not be disqualified from receiving unworked holiday pay. Otherwise eligible employees on disability leaves of absence are eligible for holiday pay up to and including one consecutive year of such leave(s) provided, however, that otherwise eligible employees hired on or after January 28, 1984 on disability leaves of absence shall be eligible for holiday pay up to and including thirty (30) consecutive days following the commencement of such leave(s).
33. The classification rate shall be that of the payroll week in which the holiday falls. If an employee is absent and does not have wages earned during the holiday week, then the classification rate to be used shall be that of the last payroll week the employee worked prior to the holiday week.
34. Employees who report for regular work, (unless notified not to do so, including announcements by local news media) or who are called back to work from off the plant, shall be given either a minimum of four (4) hours' work at the applicable contract rate (with applicable premiums, if any) for the current payroll period, (provided, that if the employee refuses an assignment of work which they are qualified to do, they shall receive no pay). The provisions of this Paragraph shall not apply in cases of strikes, work stoppages, in connection with labor disputes, failure of utilities beyond the control of the Company, or any acts of God which interfere with work being provided or an outside cause which prevents access, egress or occupancy to the extent that work cannot be provided to the employees.
35. Employees actively at work will be granted three (3) work days off with pay at their classification rate to attend or make arrangements for the funeral of their spouse, mother, father, sister, brother (including half-brothers and half-sisters), son, daughter, grandchild, mother-in-law, father-in-law, or other than a blood-related parent if it can be demonstrated without a reasonable doubt that the employee's parent is other than the blood-related mother or father. Such employee will receive bereavement pay entitlement for only one mother and one father. Employees actively at work will be granted three (3) days off with pay at their classification rate to attend or make arrangements for the funeral of their brother-in-law or sister-in-law (defined as the brother(s) and/or sister(s) of the employee's spouse, and the spouse(s) of the employee's brother(s) and/or sister(s). The in-law relationship ceases to exist when the marriage, which created the relationship, is terminated by divorce, annulment, legal separation or death followed by remarriage. Employees actively at work will be granted one (1) day off with pay at their classification rate to attend or make arrangements for the funeral of the employee and spouses grandmother or grandfather. An employee who has not previously been granted work days off with pay for the funeral of his mother or father may notify the Company that he elects, instead, such pay rights for the funerals of his maternal grandparents or his paternal grandparents. In the event of such election, the funeral pay rights otherwise applicable to the designated grandparents shall apply to the employee's parents. Should the death occur during any of the employee's scheduled weeks or days of vacation, the vacation thus interrupted will be extended by the period of authorized bereavement. Should the death occur during any of the employee's vacation, or a paid holiday, the vacation or holiday thus interrupted will be extended by the period of authorized bereavement effected.
ARTICLE V
VACATIONS
36. An employee who has been on the payroll of the Company as of the anniversary date of their employment, and prior to May 17, 2006 shall retain their current earned vacation entitlement.
Employees hired on or after May 17, 2006 shall receive the following vacation with pay:
Service Vacation ------- -------- 1 but less than 3 years 1 week (5 days) 3 but less than 10 years 2 weeks (10 days) 10 but less than 20 years 3 weeks (15 days) 20 and over 4 weeks (20 days) |
Full weeks of vacation are to be taken as full weeks; extra days may be taken individually. However, employees with two weeks of vacation or more may take their vacation time off entitlement in excess of one week as individual days. Two (2) of the individual days may be taken in (1/2) day increments, subject to the scheduling rules of Paragraph 38.
Employees on the active payroll of the Company on their 30th year of service anniversary date shall receive a $100.00 award and on each such anniversary date thereafter while on the active payroll.
The Company will issue vacation checks under the following guidelines. Full week(s) vacation checks will be issued on the pay period preceding the start of vacation. Pay for individual vacation days taken will be included in the employee's regular check for the week it was taken. If an employee takes vacation for all the days in a week when a holiday(s) occurs, except the holiday(s) themselves, the vacation days will be paid in advance as if it were a full week and the holiday(s) will be paid in the week after their occurrence.
37. Vacation pay shall be paid for all employees, beginning January 1, 2007, at their base hourly rate. Base hourly rate to include shift differential.
38. (A) During any calendar year employees shall be permitted to select the time for vacation subject to (B), (C), (D), (E) and (F) below so far as practicable, provided the employee gives written notice to the Human Resources Department of their preference before April 1, and provided that the Company may schedule in a manner which takes into consideration the operating and maintenance needs of the plant. Conflicts in requests shall be resolved on the basis of seniority. When taking single days of vacation, you must notify your supervisor before the end of your prior shift. Failure to do so will result in an absence. When taking half (1/2) days vacation you must notify your supervisor before the end of your prior shift. Failure to do so will result in an absence.
(B) The Company may schedule a vacation shutdown of 1 week's duration. In years that the Company schedules a shutdown, notification to employees will be made by March 15.
VACATION SHUTDOWN
YEAR 2006 Wednesday July 5 Thursday July 6 Friday July 7 YEAR 2007 Monday July 2 Tuesday July 3 Thursday July 5 Friday July 6 YEAR 2008 Monday June 30 Tuesday July 1 Wednesday July 2 Thursday July 3 |
(C) When a vacation shutdown is scheduled, shutdown work requirements will be announced at the time the shutdown is announced. Shutdown work requirements will be filled voluntarily from the top of the seniority list in each classification required, and if volunteerism does not meet the need, the balance of the requirements will be met by assignment from the bottom of the seniority list up. Shutdown work requirements that arise subsequent to March 15 will be filled by volunteers from the top of the seniority list. Any employees asked to work will be charged in accordance with Appendix C. Employees not asked to work during the shutdown period will not be charged for any overtime. If an out of overtime spread condition occurs because of the overtime worked during the shutdown period, the Company shall have 30 days to bring the effected employees back into the 30 hour overtime spread.
(D) Employees who are entitled to vacation and who work during vacation shutdown will be permitted to request their vacation so far as practicable, and in consideration of the operating and maintenance needs of the Company, at any other time of the year. In instances where employee vacation requests conflict with the Company's needs, vacations will be scheduled on the basis of seniority.
(E) In order to qualify for the vacation defined in Par. 36, an employee must have worked not less than seventy (70) percent of the regular days of work available to them during the twelve (12) months immediately preceding January 1 of any calendar year, except in the case of any employee who completes one (1) year of service in the calendar year, it shall be twelve (12) months immediately preceding their anniversary date. It is understood and agreed for this purpose that the absence from work because of Company layoffs due to lack of work (not to exceed ten [10] work weeks), occupational accidents, certified illness, holidays, shall be considered as time worked for the purpose of computing eligibility for vacation privileges.
(F) An employee may take pay in lieu for any earned vacation, not to exceed five
(5) days in any year. Such scheduling should be handled with the normal April 1
vacation scheduling procedure. Changes after the vacation schedule is
established must be consistent with production needs. Pay in lieu will normally
be included in the vacation check at the time the vacation is taken. This shall
not change the practice of paying for unused vacation at the end of each
calendar year. The Union will be informed of all pay in lieu arrangements. No
employee shall be discriminated against based upon his exercise or nonexercise
of this understanding.
39. In the event of the death of an employee eligible for vacation pay at the time of their death, such vacation due the employee shall be paid to their surviving spouse or other legal heir.
40. If any employee is laid off for a period equal to or longer than their vacation, the employee may designate the equivalent portion of such layoff period as their vacation with pay.
41. Vacation periods may not be postponed from one year to another and made accumulative, and will be forfeited unless completed within each calendar year, but in any event the employee will receive their vacation pay.
42. An employee entering military service who is eligible for vacation in the year in which they enter and who has not received such vacation shall receive the vacation pay to which they are entitled under this Article.
43 Any employee returning from military service who is eligible for vacation in the year in which they return shall receive a vacation subject to the provisions of this Article, except Par. 38 above, provided it is not in the same year in which they enter. Their vacation pay will be paid in accordance with Paragraph 37.
44. In the event an employee has their vacation scheduled immediately upon beginning work and therefore does not have any hours worked, their vacation pay is computed by multiplying their rate for the job classification to which they are assigned by their vacation hours.
45. Vacation Pay for Layoffs.
During any calendar year, if an employee is on layoff through no fault of their
own and solely as a result of such layoff they have not fulfilled the
requirements of Par. 38 (A) of this Article, and such an employee has had
earnings in the preceding calendar year, they shall be entitled to receive
vacation pay in accordance with Paragraph 37 as provided in Par. 36 of this
Article. Employees who are laid off may elect to receive their vacation pay at
the time of layoff under Paragraph 40 and, in accordance with Paragraph 40, a
corresponding portion of the layoff will be considered as the employee's
vacation time off at the time of layoff. If the employee does not elect his
vacation pay and time off at the time of layoff and is recalled in the same
calendar year, they will receive their vacation pay in accordance with Paragraph
46. If the employee does not elect their vacation pay at the time of layoff and
is not recalled during the calendar year, they will be paid any vacation pay
owing at the end of the calendar year.
46. In the event an employee has been on layoff and is recalled to work during any calendar year, and such an employee has had earnings in the preceding calendar year, but solely because of such layoff has not fulfilled the requirements of Par. 38 (A) of this Article, they shall be entitled to vacation pay as outlined in Par. 45 above. Upon returning to work anytime in the year, such employee will be eligible to receive their vacation pay upon giving one week's notice but vacation time off will be granted (if requested) consistent with Paragraph 38 of this Article.
ARTICLE VI
SENIORITY
47. GENERAL. The Company and the Union recognize that promotional opportunity and job security in the event of promotions, decreases of forces, and rehirings after layoffs should increase in proportion to length of continuous service, and that in the administration of this Article, full consideration shall be given continuous service in such cases. "Continuous service"
as referred to herein, means a period of employment not interrupted by a break sufficient to terminate the employee's seniority.
48. RULE FOR APPLYING SENIORITY. In all cases of promotion or increase or decrease in forces except when a different rule is stated, the following factors shall be considered; however, only where factors (B) and (C) are relatively equal shall length of continuous service govern:
(A) Length of continuous service;
(B) Ability to perform the work;
(C) Physical fitness.
49. SENIORITY DEFINED. Length of continuous service as outlined in this Article is defined herein as years, months, and days of service with the Company since the last date of hire. In cases where two or more employees commence work on the same date, the following method will determine the most senior employee:
Shift 3 = Most Senior
Shift 1 = Senior to employee who started on Shift 2
Shift 2 = Least Senior
In the case of two or more employees starting on the same shift and same date, at the orientation, between the Union, employees, and the Company, the employees will draw a card from a deck of cards and the high card will determine the most senior employee, which determination shall be final and govern all future issues of relative seniority during their employment with the Company. All affected employees who have not established permanent seniority shall do so as outlined by the card drawing provisions of this article. When seniority is established the Company will provide to the Union a listing of the employees affected and a copy to the employee.
50. TRANSFER OF SENIORITY. Employees transferred from one classification to another classification, by job bid or promotion shall transfer their seniority to the new classification after twenty (20) working days on the job to which they had bid or transferred, provided it is the last classification to which they have bid or have been promoted. An employee thus transferred shall serve a trial period of not less than one working day and not more than twenty (20) working days, which period may be extended by mutual agreement. In cases covered by the above employees will be allowed to wash themselves out during the trial period (on the job to which they had bid or been promoted) by giving notice to the Company not later than the twentieth (20th) day, provided they had not previously held the classification in the previous two (2) years.
51. Employees who wash themselves out as above specified or who are washed out by the Company shall be entitled to return to their former job classification with full seniority. If there have been other personnel moves which have resulted from their bid or promotion, the employees involved will be returned to their former job classifications (to the extent that this is necessary in order to accommodate the washout) with full seniority, and the Company will be entitled to postpone the reverse moves caused by the washout until all resulting personnel moves may be accomplished without the necessity of paying premium pay.
52. Employees who are transferred in lieu of layoff will immediately transfer their seniority to the new classification.
53. DECREASE IN FORCES. When a reduction in force is necessary, forces shall be reduced in the following manner: (Subject to the exceptions in Article XI, Par. 111).
54. The Company will allow in certain situations for a voluntary layoff to occur. If this happens, the following guidelines will apply on a seniority basis:
a) The voluntary layoff period will be for a maximum of four (4) weeks. This time period may be extended when the Company, Union and an employee mutually agree.
b) The voluntary layoff option will be made available to those Employees in the classification whose work assignments are being immediately affected by the reduction. No employee on voluntary layoff will be allowed to exercise their seniority in any classification.
c) When it is determined that a recall is needed, the person who went out on involuntary layoff would be recalled prior to a person who volunteered.
d) If it is determined that production needs change and all other options have been exhausted, the Company would have the option to recall a person on voluntary layoff.
e) Upon return from voluntary layoff the employee will return to his/her previous classification and shift.
f) During a voluntary layoff, a person would retain their Insurance consistent with the Insurance Agreement in the contract.
g) In the event there are insufficient volunteers for a required layoff, the procedures prescribed in this article concerning decreases in forces will apply.
55. (1) Probationary employees will be the first to be displaced from the classification(s) to be reduced; (2) Next, employees who have not acquired seniority in the classification as provided in Par. 50 shall be displaced from the classification(s) to be reduced and shall be returned to the classification in which they still hold seniority. (Employees who have been transferred into the classification pursuant to Par. 56 shall be excepted from this group and shall be considered on the basis of their total seniority as part of the group considered in subparagraph (3) hereof). (3) Next, employees will be displaced from such classification(s) on the basis of their seniority in the classification, on the basis of the factors in Par. 48.
56. Employees who are displaced from their regular classification shall be offered a job opportunity in a vacant job or in a job held by an employee with less seniority, as follows:
(1) To a job classification for which the employee is fully qualified by previous classification and satisfactory performance in the job classification for the Company, or
(2) To a job classification for which the employee qualifies under the factors set forth in Par. 48, without any training period.
57. Employees displaced in the above process shall be considered on the same basis as specified in Par. 55 hereof for reduction of forces in a classification. Such employees who are displaced in this process shall be given a similar opportunity. Employees who are displaced under the above procedure and who do not have sufficient seniority and qualification to secure another job under the above procedure shall be laid off from the Company.
58. In the event of partial or complete shutdown of manufacturing operations during straight-time hours for the purpose of taking inventory, seniority by shift shall apply only among employees in the same job classification doing the same type of work. Employees performing
such work will be paid at their classification rate. During overtime hours for the purpose of taking inventory, the Appendix "C" Overtime Distribution Agreement shall apply.
59. Employees who have completed their probationary period and who are scheduled for a layoff for a period exceeding three (3) working days, shall be notified at least three (3) working days prior to such layoff. The Union shall be notified as soon as practicable after the Company makes the determination to lay off employees. In the event an employee is temporarily laid off for a period of not more than three (3) working days, due to lack of work or other legitimate causes, the employee with the least continuous service in the classification affected shall be laid off.
60. Employees may elect layoff instead of exercising their seniority rights to displace a less senior employee in a different classification. (The Company will provide the employee and Union with a list of the different classifications that have less senior employees.) Employees electing layoff under this paragraph will only be eligible for recall to their regular assigned classification or to such other classifications as they designate in writing to Human Resources at the time of layoff. Such employees shall be notified by certified mail that their rights are due to expire. Such notice will state that they must accept the next recall for which they are eligible or terminate their seniority and all employment rights. In no event shall the employee's seniority be extended for a period greater than that specified in 62(E). The president of the local union shall appoint two (2) committee members to be present in the Layoff & Recall meeting prior to notice being given to employees of such Layoff or Recall. Only one (1) of the appointed members may be present at the meeting with the employees.
61. RECALL TO OCCUR AS FOLLOWS:
I. When increasing the workforce in an area without adding to the overall plant headcount, both shift preference and recalls, direct and indirect, will be honored based on seniority. If the position is not filled through this process, then the position will be posted.
II. Opening occurs in classification that has employees on layoff and most senior person on layoff is from the classification that is being recalled.
A. The person with the most seniority with the Company shall be recalled by telephone or certified mail.
B. The person recalled is expected to advise the Company of their availability for recall upon contact by telephone, or if unable to be contacted by telephone, shall have forty-eight (48) hours after sending certified mail to notify the Company of their availability for work and must report for work not later than the beginning of their shift on the third working day following the day the notice to report was sent.
(1) In the event the employee does not accept recall or fails to report for work, their seniority and all employment rights will be terminated.
III. Opening occurs in classification that has employees on layoff. However, there are more senior employees on layoff from other classifications.
A. The Company shall recall the most senior person, regardless of their classification, who are fully qualified to perform the work of that classification by:
(1) Previous classification and satisfactory performance in the job classification for the Company, or
(2) Under the factors set forth in Paragraph 48, Article VI of the Basic Agreement, without any training period.
B. The person recalled is expected to advise the Company of their availability for recall upon contact by telephone, or if unable to be contacted by telephone, shall have forty-eight (48) hours after sending certified mail to notify the Company of their availability for work and must report for work not later than the beginning of their shift on the third working day following the day the notice to report was sent.
In the event the employee does not accept recall or fails to report for work, their seniority and all employment rights will be terminated.
IV. Opening occurs in classification that has no employees on layoff. However, there are employees on layoff from other classifications.
A. That job shall be posted in accordance with Article VI, Par. 69 of the Basic Agreement.
B. After job posting and selection procedures have occurred, persons on layoff will be recalled to the job vacancy that would then exist in accordance with Part I and Part II, if applicable. If Part I and Part II are not applicable, persons will be recalled in accordance with length of continuous service, physical fitness and ability to perform the work, without any training period.
C. The person recalled is expected to advise the Company of their availability for recall upon contact by telephone, or if unable to be contacted by telephone, shall have forty-eight (48) hours after sending certified mail to notify the Company of their availability for work and must report for work not later than the beginning of their shift on the third working day following the day the notice to report was sent.
In the event the employee does not accept recall or fails to report for work, their seniority and all employment rights will be terminated.
NOTE: Employee's recalled from layoff who are unable to return to work due to medical reasons shall be placed on medical leave of absence provided the employee accepts the recall.
62. LOSS OF SENIORITY. Continuous service as outlined in this Article shall be broken and employees shall not be considered as having any length of continuous service or any employment relationship whatsoever with the Company:
(A) If they shall quit;
(B) If they shall have been discharged for proper cause;
(C) If they fail to report for work, or make satisfactory explanation of such failure within forty-eight (48) hours after notification has been sent to report for work by certified mail, one
copy of such notification being tendered to the Union Committee. Such notice shall not be sent unless such employee has been absent and has failed to notify the Company by the middle of the employee's shift on the second consecutive working day of the reason for such absence, or;
(D) If they fail to report on schedule following a vacation or an authorized leave of absence without giving a reasonable excuse (employees who present an excuse for such absence will be permitted to work after the presentation of the excuse until such time as the Company decides whether to honor the excuse as an exception to the rule) or;
(E) If they shall have been absent from the service of the Company for any
reason (except for a leave of absence for military service) for a period of two
(2) years, where such employee has been continuously employed for over ninety
(90) calendar days and not over two (2) years shall be considered as having lost
their seniority and employment relationship if they have been absent from the
service of the Company for a period equal to their length of service with the
Company. Absence due to a compensable disability incurred during the course of
employment shall not break continuous service provided such individual is
returned to work within thirty (30) days after final payment of statutory
compensation for such disability, or after the end of the period used in
calculating a lump sum payment.
63. PROBATIONARY PERIOD. A new employee, and others re-employed following a break in continuous service, as outlined in Par. 62 above, will acquire seniority after they have completed ninety (90) calendar days of employment, exclusive of any periods of absence due to medical reasons of five or more consecutive days, from the date of their employment or re-employment with the Company. Such employees shall be considered probationary employees until they have acquired seniority. There shall be no responsibility for the re-employment of probationary employees if they are laid off or discharged during this period. Probationary employees may file and process grievances after thirty (30) calendar days from date of employment or re-employment but may be laid off or discharged during their probationary period as exclusively determined by Management.
64. INFORMATION TO THE UNION. Every three months the Company shall furnish the Union with copies of a seniority list and post copies on the bulletin boards of the Company. Once each month between the quarterly lists, the Company will furnish the Union one copy of an updated seniority listing. The company will also continue to provide the union with an updated list of shift preferences and recalls periodically.
(A) No more than once per month, at the request of the union, the Company will provide a list of hires, terminations, promotions, transfers and seniority of bargaining unit employees during the preceding calendar month
(B) The Company will continue to provide the Union with copies of written leave of absence forms, written disciplines, names of employees who are to be laid off or who have been recalled (including the date of notice and the name of the job classification involved), "employee record change requests" and notices that appear on Company bulletin boards that pertain to the bargaining unit. The Company will transmit this information within two (2) weeks after the action is taken or, in the case of leave of absence, within one (1) week after the form is completed. Inadvertent failure to transmit the information or failure of the Union to receive it shall not invalidate the action involved, since the purpose of this provision is only to keep the Union informed. Errors shall be corrected when discovered.
65. SHIFT/JOB TRANSFERS. Employees who have completed their probationary period who desire to change shifts or jobs shall indicate their preference on a form provided by the Company. When a vacancy occurs in a classification, an employee performing the same type of work in the classification, with a written preference form on file, shall be given preference based on their seniority for transfer where the vacancy exits, subject to the following conditions.
(A) In the event it is not possible to transfer the employee in accordance with their preference due to there not being an adequately qualified crew on the shift from which the transfer is to be made, the transfer will be made as quickly as possible.
(B) The Company shall have the right to train new employees to the classification on the day shift for a period of not to exceed thirty (30) working days (except that such period may be extended by agreement of the parties), and any transfers shall not take place until this training is completed.
(C) In the event an employee is promoted in a classification, the employee thus promoted will remain on the same shift and area unless there is a more senior employee in the classification where the promotion occurs with a preference form on file. If this should occur the two employees will exchange places.
(D) In the event the Company decides to decrease the number of employees in a classification on a shift and increase the number of employees in the same classification on another shift within the same area, the Company will utilize this Paragraph to achieve the necessary results. If openings exist after all preferences have been utilized, the least senior employees (being decreased) will be transferred and shall exercise their seniority rights regardless of shift or area. All employees (direct or indirect) may utilize their seniority to bump a less senior employee, and shall not be required to remain within their classification.
66. Employees granted a preference change under this paragraph to their first choice shall not be entitled to a preference change for a period of one hundred twenty (120) days. Employees granted their second choice will continue to have their first choice on file unless changed by Paragraph 67.
67. Employees may withdraw or change their written preference at any time. However, the preference form on file before Wednesday of any work week shall govern any changes to be effective in the following work week and thereafter unless changed by subsequent preference form. In the event of a reduction or recall from layoff in the work force in any department or shift, the Company will notify the Union of these reductions or recalls at which time the preferences shall be frozen effective midnight the day immediately preceding such notice. They shall remain frozen until the displacements resulting from such reductions or recalls are complete.
68. TEMPORARY TRANSFER. Vacancies of 45 days or less in a classification shall be considered as temporary. The Company may fill such temporary vacancies as follows. Employees farmed into a classification on any one shift will be considered one occurrence. The Company shall not exceed 45 occurrences in any individual classification in a 120 day period. Job vacancies in excess of 45 days may also be considered temporary such as the case where the vacancy is due to an employee being on leave of absence due to occupational accidents and certified illness.
69. JOB POSTING. When a vacancy occurs or is expected to occur, (other than a temporary vacancy), which has not been filled either by promotion, preference form or recall from layoff, the Company shall, to the greatest degree practicable, post the job vacancy on bulletin boards
throughout the Company for a period of two (2) working days. Such posting will include the job title, the location of the job, the pay rate, the shift, and the job description.
70. Non-probationary employees desiring such job shall apply for the job on a form prescribed by the Company. The employee selected by the Company (such selection governed by Par. 48 of this Article) shall be given a trial period of not less than one working day and not more than twenty (20) working days, which period may be extended by mutual agreement. If it is determined by the Company that they are not satisfactorily performing the job, or if employees wash themselves out pursuant to the terms of Article VI, Par. 50, they shall be returned to their former classification and the Company shall continue to make selections by seniority from the bidders and again provide a trial period under the same procedure. If the next employee is washed out by the Company or washes out pursuant to the terms of Article VI, Par.50, the Company after exhausting all bidders may recruit from any available source. Upon bidding the job and being selected, the employee will not be entitled to bid on another permanent job opening for a period of six (6) months, except in the event the employee is not on the job they obtained through bidding due to a decrease in forces as set forth in Par. 53.
71. An employee may withdraw a bid within one (1) working day after bids have been closed by giving written notice to Human Resources or their supervisor. An employee withdrawing a bid in a timely manner and/or an employee who is washed out by the Company during the trial period shall not be subject to a bidding bar.
72. An eligible bidder shall be placed on their job within ten (10) working days after their selection. Such ten (10) day period may be extended by mutual agreement between the Company and Union.
73. A list of successful bidders shall be posted following the week in which the selections are made. If posted jobs are not filled, and if the vacancy still exists, the Company shall re-post the position within thirty (30) days.
74. An employee promoted from the bargaining unit may be returned but once by the Company to the bargaining unit, provided such option is exercised by the Company not later than six months after such promotion. Upon their return, the employee will be credited with the amount of accumulated seniority they had as of the date of their promotion from the bargaining unit, and shall immediately resume the accumulation of seniority.
ARTICLE VII
MILITARY SERVICE
75. The Company shall accord to each employee who applies for re-employment after conclusion of military service with the United States such re-employment rights as they shall be entitled to under then existing statutes. If the position of such employee has been eliminated, the Company will use every reasonable effort to provide for the employee employment for which they can satisfactorily qualify.
ARTICLE VIII
LEAVE OF ABSENCE
76. The Company, in cases where production requirements permit or unusual circumstances warrant, may grant, at its discretion, a leave of absence upon written request made in the form
prescribed by the Company and upon good cause being shown for such leave for a definite period of not more than eight (8) weeks. Additional leave may be granted in writing upon written request where deemed justified, but in any event, no succession of leaves shall extend beyond one (1) year; provided that in exceptional cases of extended absence because of illness or accident a longer leave of absence may be granted at the Company's discretion.
77. Up to three (3) employees at any one time (unless otherwise mutually agreed), as designated by the Union, may request leave from the Company to serve as a delegate to a union convention or for other official union business or training. Whenever possible, the Company will be provided at least thirty days advance notice of any such leave. Notice given less than 30 days in advance of a leave will not be unreasonably denied. There shall be no deduction from "continuous service" (under this Agreement or the Pension Agreement) for leaves granted under this Paragraph.
78. Any employee (not exceeding three in number at any one time) selected by the Union to act as a full-time official representative will be given a leave of absence by the Company for the duration of such office. There shall be no deduction from "continuous service" (under this Agreement or the Pension Agreement) for the first twelve (12) months (accumulative) of leave(s) of absence granted under this paragraph. After the first twelve (12) months of leave(s) of absence under this paragraph, "continuous service" will be frozen for the duration of such leave(s).
79. Pregnancy shall be treated the same as any other total or temporary disability and leave of absence under the terms of this agreement.
80. In the event an employee on leave of absence accepts substitute gainful employment or self-employment without the prior consent of the Company, their leave shall automatically be considered cancelled and employment terminated without recourse, except in the following cases:
(A) As an official representative of the Union, or
(B) In some section of the United States (other than Winnebago County, Illinois, or Rock County, Wisconsin), where such employee is residing temporarily because the illness of a member of their immediate family.
81. An employee who is called for jury service shall be excused from work for
the days on which they serve and they shall receive, for each day of such
service on which they otherwise would have worked, the difference between eight
(8) times their classification rate (plus shift premium and supper pay if
applicable) and the payment they receive for jury service. The employee will
present proof of such service and the amount of pay received therefor. An
employee who is subpoenaed for court appearance and is not the plaintiff or
defendant shall be excused from work for the court appearance and shall be paid
for each day lost for which they otherwise would have worked in the same manner
as provided for jury service, above. The employee will present proof of such
appearance and the amount of any pay received therefor.
ARTICLE IX
ADJUSTMENT OF GRIEVANCES
82. It is agreed that the Union will establish a Shop Committee from employees in the bargaining unit to meet with representatives of the Management for the purpose of presenting and participating in the adjustment of grievances, and, when established, shall furnish the Company
with the names of the Committee members.
83. Such committee shall consist of three (3) members from the day shift and one
(1) members each from the second and third shifts, provided there are at least
ten (10) or more employees for each committee member on the second and third
shifts. An additional committee member will be added at such time, and for as
long as, the bargaining unit exceeds 200 employees. Thereafter, an additional
committee member will be designated for every 100 employees added to the
bargaining unit.
84. The Company shall recognize alternates appointed to fill a vacancy caused by the vacation or leave of absence of a committee member, and such alternate shall be allowed to attend regular monthly union meetings if they so request.
85. At such time as the entire committee is absent from the plant due to Labor Contract negotiations, two (2) alternate committee members per shift affected may be appointed by the Union and shall be recognized by the Company.
86. Should any difference or dispute arise between the Company and its employee(s) concerning the meaning and application of the provisions of this Agreement, (or should the Union contend that the Company has violated its obligations under the Agreement to the Union, as such) an earnest effort shall be made to settle the difference orally. This oral effort shall be made by the aggrieved employee (or in the case of a breach of obligation to the Union, as such, by a committee member) and/or not to exceed two committee members at the option of the employee. If the matter is not resolved orally, it shall be taken up in the following manner:
87. FIRST: In writing to the supervisor involved. A meeting shall be held within one (1) working day after receipt of the written grievance. The Company will normally be represented at this meeting by the supervisors involved, provided that the Company may designate alternate or additional First Step Representatives in appropriate cases. The Union will be represented by the grievant and up to two (2) shop committee members. The written grievance shall be answered by one of the Company First Step Representative within two (2) working days after the first step meeting. If the answer is not satisfactory the grievance shall be appealed to the next step by the Union within four (4) working days of the written answer.
88. SECOND: Second step meetings will be held within (7) calendar days of the Union's request unless otherwise mutually agreed. The Company shall make its written answer within seven (7) working days after the meeting at which the grievance is discussed. If the answer is not satisfactory, the grievance shall be appealed to the next step by the Union within ten (10) working days of the written answer.
89. THIRD: Between an International Representative of the Union, the Local Union President and/or the two Chairpersons of the Shop Committee and the Managers of the Company and/or other Company Representatives at a regular or special meeting. One or more witnesses may be called into the meeting by agreement of the parties. The Company shall make its written answer within ten (10) working days after the third step meeting in which the grievance is discussed.
90. FOURTH: If the Union is not satisfied with the third step answer of the Company, it may, within thirty (30) calendar days of the date of the answer give notice of its intention to refer the grievance to arbitration. (If the Company fails to give an answer within the time limit prescribed at Step Three, the Union may elect to treat the grievance as having been denied and
may give notice of its intent to refer the matter to arbitration.) After such notice is given, the Company and the Union will attempt to agree upon an impartial arbitrator. If no agreement is reached within thirty (30) calendar days thereafter the Federal Mediation and Conciliation Service (FMCS) will thereafter be asked to submit a panel of seven (7) arbitrators to the parties. The parties shall, upon receipt of said panel, strike names alternately until one (1) name remains on the panel; this remaining person shall serve as the impartial arbitrator. The arbitrator shall have jurisdiction and authority only to interpret, apply, or determine compliance with the provisions of this agreement insofar as shall be necessary to the determination of grievances appealed to the arbitrator. The arbitrator shall not have jurisdiction or authority to add to, detract from or alter in any way the provisions of this Agreement.
91. Each party shall assume its own expenses in connection with arbitration, and the fee of the arbitrator shall be paid by the two (2) parties, one-half (1/2) by each.
92. Grievances reduced to writing shall be dated and signed by the aggrieved employee(s) or their Shop Committee Member, except that grievances relating to more than two (2) employees shall be signed by at least two (2) aggrieved employees and the Shop Committee Member for the area(s) involved. All answers by the Company and all appeals by the Union shall be in writing, dated and signed by the Company or Union representative involved.
93. In the event an employee dies, the Union may process on behalf of their legal heirs any claim they would have had relating to any monies due under the provisions of this Agreement.
94. Grievances settled shall be signed off by a Shop Committee Member and/or International Representative.
95. Written grievances and appeals shall be answered by the Company Representative or their designee within the time limit fixed therein or the Union may pass the grievance to the next step, except that in Step 2, if the Company fails to answer within the time limits fixed therein it shall be considered adjudicated in favor of the employee. Grievances not appealed within the specified time limits shall not be eligible for further appeal. All time limits in this Article may be extended with the written consent of the other party.
96. Meetings between the International Representative of the Union, the Local Union President and/or the two Chairpersons of the Shop Committee or their alternates, and Managers of the Company and/or other Company Representatives provided for in the third step of the grievance procedure, shall be held at least once each month, prior to the fifteenth (15th) of the month to consider all grievance appeals submitted during the preceding month. Special meetings will be arranged on a date and at a time mutually satisfactory in regard to difficulties which may arise and which need immediate attention.
97. Members of the Shop Committee will be afforded time off at their classification rate for the purpose of attending meetings with the Company pursuant to the first three steps of the grievance procedure. A member of the Shop Committee shall also be allowed time off when necessary at their classification rate, to aid in the settlement of grievances in the area which they represent. A committee member on Union activity shall obtain permission from their supervisor (which shall not be unreasonably denied) and properly record their absence prior to leaving their work station to conduct these activities; shall report their presence and their purpose to the supervisor of the department in which they wish to conduct this activity; and shall report their return to their supervisor at the conclusion of this activity. Members of the Shop Committee shall do their utmost to see that their absence from their work station due to handling of grievances
shall be as little as practicable and shall do their utmost to see that their absence from the work station does not interfere with production. Company paid time under this section is limited to a weekly maximum of the sum of seven (7) hours times the number of active committee members ("the pool"). All time used by the committee members will be deducted from the pool. Unused hours will not be carried over from week to week.
98. All grievances must be presented promptly and not later than thirty (30) days after the cause of the grievance arises unless the circumstances of the case made it impossible for the employee or the Union to know that they had grounds for such claim prior to that date, in which case the retroactivity shall not exceed thirty (30) days prior to the date the grievance was filed in writing. Grievances involving discharge must be presented within three (3) working days of the action (subject to Par. 102). Grievances alleging improper layoff must be presented within two (2) working days of the Company notice to the employee of this intended layoff or there shall be no retroactivity prior to the date of the grievance.
99. Grievances alleging improper recall must be presented within two (2) working days after notice is given to the employee (at the address last given by them to the Human Resources Department) that a less senior employee was recalled to a job classification to which they were entitled, or there shall be no retroactivity prior to the date of the grievance. In cases of retroactivity the employee will be paid at the rate of the job classification to which they were entitled.
100. The Grievance Committee of the Union shall be notified and given a list of all employees scheduled for layoff or recall prior to such layoff or recall taking place. The layoff list proposed by the Company shall not become final until one working day after the Union has been provided with the list.
101. The assignment of Shop Committee Members to their respective plant areas shall be a matter of full knowledge to both the Union and the Company immediately. It is further agreed, for the purpose of prompt settlement of grievances, that, where necessary, committee members will handle grievances without restriction as to area.
102. Under the provisions of this Agreement, no employee, after their
probationary period provided in Par. 63 of Article VI, Seniority, shall be
discharged or given a disciplinary layoff in excess of five (5) days, without
first being suspended. Such initial suspension shall be for not more than five
(5) working days. During this period of initial suspension, the employee may, if
they believe that they have been unjustly dealt with, request a hearing and a
statement of the offense before their supervisor or their superintendent or the
Human Resources Department Representative, with a Grievance Committee member or
the plant committee present if they so desire. At such hearing, the facts
concerning the case shall be made available to both parties. After such hearing
or if no such hearing is requested, the management may conclude whether the
suspension shall be converted into discharge or disciplinary layoff, or
dependent upon the facts of the case, whether such suspension shall be extended,
or revoked, or modified or affirmed. If the suspension is revoked, the employee
shall be returned to employment and made whole in the absence of mutual
agreement to the contrary; but in the event a disposition shall result in the
affirmation, extension or modification of the suspension, or in the discharge of
the employee, the employee may within three (3) working days after such
disposition allege a grievance in writing on a regular grievance form which
shall be handled in accordance with the procedure outlined in this Article,
beginning with Step Two. Should any employee as a result of this grievance, have
their discipline or discharge revoked, they shall be returned to work and made
whole. In the event of arbitration the arbitrator shall determine what, if any,
substitute earnings or compensation are
to be offset.
103. Where discipline of an employee is involved or there is a dispute as to the correctness of an employee's record of absence/tardiness, an employee or (with the employee's permission) their Shop Committee Member may review their record of absence/tardiness in the presence of a supervisor.
ARTICLE X
BULLETIN BOARDS
104. The Company agrees to provide up to two (2) glassed in bulletin boards with locks to be placed at the South Beloit plant which may be used exclusively by the Union for posting notices signed by the Union Secretary or the President of the Local Union and restricted to:
1. Notices of Union recreational and social affairs.
2. Notices of Union appointments and results of Union elections.
3. Notices of Union meetings.
4. Notices of Union elections.
5. Notices, which shall be non-controversial in nature, approved by Company Representatives.
105. It is agreed that the Company may remove any notice which is not in accordance with the above restrictions.
ARTICLE XI
WAGES
106. New and/or changed jobs shall be described and classified in accordance with the National Position Evaluation Program, which may be modified as necessary by mutual agreement. The new or changed description and classification shall then be submitted to the job evaluation committee and, if agreed to, shall then be established. If no agreement is reached, the Company may place the description and classification in effect, after which a grievance may be filed at any time within the next thirty (30) days, contending that the job has been improperly described and/or classified.
107. Job evaluation points assigned to a job classification shall be changed only when it has been established that there have been changes in the job content or by mutual agreement.
108. The standard hourly wage schedule of rates for the respective job classes set forth in Appendix "A" shall become effective and shall remain in full force and effect for the duration of this Agreement. A schedule of jobs in each job class is also included in Appendix "A." Appendix "A" constitutes the minimum rates of pay for the applicable job classification (direct and indirect as applicable) and are incorporated by reference and are fully made a part of this Agreement.
109. Employees hired on or after May 17, 2006 for all job classifications, shall serve a progression period where applicable, or will enter at the starting wage rate set forth in Appendix "A". Progression increases may be subject to demonstration of required skills on milestone dates. Bidding into a higher classification will result in applicable new hire rate.
110. Effective on or after August 6, 2006, employees hired prior to May 17, 2006 bumping into a lower classification will result in applicable Incumbent rate. Bidding into a higher classification will enter at the 6 month progression rate for new classification set forth in Appendix "A".
111. It is understood and agreed that nothing contained in this Article shall prevent the Company from paying a present employee or a new employee the rate of the job classification to which they are transferred or assigned, provided they are qualified and able to perform the work satisfactorily.
112. When a reduction of employees occurs in a classification or in the Company, an employee who has attained a classification above the lowest grade in an occupational group (see Appendix B) shall not be reduced in rate as long as they are retained at work within that occupational group. Such rate retention shall also apply in the event such an employee is recalled to the occupational group from a job classification outside of the occupational group or from layoff out of the plant.
113. An employee wishing to be reduced in classification within an occupational group may exercise this right but once and only in the event there is a posted opening.
114. When an employee is transferred to a classification outside their occupational group in lieu of layoff, they shall receive the rate of the classification to which they are assigned.
115. Indirect. When an indirect employee is temporarily assigned to another indirect job classification outside their own occupational group, they shall be paid on the basis of either the indirect rate of their regular job classification or the indirect rate of the classification to which they are assigned, whichever is greater. When an indirect employee is temporarily assigned to a direct job classification outside their own occupational group, they shall be paid the higher of the rate of their regular job classification or the rate of the job classification to which they are assigned.
Direct. When a direct employee is temporarily assigned to another direct job classification outside their own occupational group, they shall be paid the higher of the direct rate of their regular job classification or the direct rate of the job classification to which they are assigned. An employee who is classified in a direct labor classification and who is temporarily transferred to an indirect labor classification, other than pursuant to Article VI, shall be paid either the rate of their regular classification or the rate of the classification to which they are assigned, whichever is greater.
Employees hired on or after January 28, 1984, who are working under the new hire rate progression, will be paid the appropriate rate provided for in this paragraph when temporarily transferred, reduced to the applicable rate based upon their time in the new hire rate progression.
116. No employee shall be temporarily transferred to another classification outside their occupational group (unless they consent) if there is an employee from another occupational group working in the group and shift and in the Operation to which they are regularly assigned; provided that this limitation shall not apply when an employee has been temporarily transferred out of the occupational group because of disability or their own request.
117. It is agreed that a shift differential shall be paid to an employee regularly assigned to other than the day shift as follows: an employee who works four or more hours after 3:00 p.m.
and before 11:00 p.m. shall receive a differential of fifty-five (.55) cents per
hour for each hour worked; an employee who works four or more hours after 11:00
p.m. and before 7:00 a.m. shall receive a differential of sixty-five (.65) cents
per hour for each hour worked. An employee regularly assigned to the first shift
shall not receive a shift differential for overtime work. No change in method of
shift differential pay will be made for an employee temporarily transferred from
one shift to another for a period not exceeding one day. If such transfer
exceeds one day, the shift differential shall be, or shall not be, paid in
accordance with the provisions of this Paragraph relating to the shift on which
they are temporarily working.
118. Saturday and Sunday shall be as defined in Article IV, Par. 24.
119. In the event the work of a job classification as set forth in Appendix "A" is discontinued or becomes inoperative, the Union will be immediately notified of the reason thereof. Such notification does not preclude the filing of a grievance should any disagreement arise between the parties.
120. Pay Adjustments and Corrections. Where a "retro" adjustment involves a deduction from the employee's pay, no more than $50 will be deducted from any one check. In the case of gross errors the $50 maximum will not apply and other arrangements will be made.
ARTICLE XII
COST-OF-LIVING
121. For the term of this contract, the cost-of-living provisions will be frozen.
122. (A) Except as set forth below in sub-paragraph (C)(3) and (4), all cost-of-living adjustments provided in this Article shall be accumulated in a cost-of-living float which shall be an "add-on," and shall not be part of an employee's classification rate. Such adjustments shall be payable only for clock hours actually worked and for reporting allowances and shall be included in the calculation of overtime premium, but, except as provided below, shall not be part of the employee's pay for any other purpose and shall not be used in calculation of any other pay, allowance, or benefit. Cost-of-living adjustments will be included in the calculation of holiday pay as defined in paragraph 31 of this Agreement. Vacation pay in any year will be calculated from the prior year's earnings as stated on the Wage and Tax Statement (Form W2) in accordance with paragraph 37 of the Agreement.
123. (B) The United States Department of Labor, Bureau of Labor Statistics, Consumer Price Index for Urban Wage Earners and Clerical Workers - C.P.I. - W U.S. City Average: All items 1982-84 = 100 shall be used as the basis for cost-of-living adjustments provided for in sections (C), (D) and (E) below. Such index shall be referred to as the "BLS-CPI."
124. (C) (1) During the calendar year 1999, there shall be four (4) cost-of-living adjustment dates: February 1, 1999, May 1, 1999, August 1, 1999, and November 1, 1999.
(2) The cost-of-living adjustment added to the cost-of-living float on such date (if a Monday) or on the first Monday following such 1999 adjustment dates, if any, will be an adjustment of one cent ($.01) for each full four-tenths (.4) points movement in the BLS-CPI index figures (after the six cent [$.06] "set off" or "corridor" set forth in [C] [3] below) based upon the following calculation months for the following 1999 adjustment dates:
February 1, 1999 - Subtract September, 1998 index figure from the December, 1998 index figure.
May 1, 1999 - Subtract December, 1998 index figure from the March, 1999 index figure.
August 1, 1999 - Subtract the March, 1999 index figure from the June, 1999 index figure.
November 1, 1999 - Subtract the June, 1999 index figure from the September, 1999 index figure.
If the calculation for any quarterly adjustment when dividing four-tenths (.4) into the applicable BLS-CPI index change between calculation month indexes results in tenths of the index left over, such tenths will be carried over into the BLS-CPI index change between the calculation month indexes for the next quarterly adjustment.
(3) The first six cents ($.06) which the above formula would otherwise generate for 1999 cost-of-living adjustments on the 1999 adjustment dates will not be paid in any form. No 1999 cost-of-living adjustments will be added to the cost-of-living float until the first six cents ($.06) which the application of the formula would produce has been exceeded and then only the amount generated in excess of six cents ($.06) shall be added to the cost-of-living float.
125. (D) (1) During the calendar year 2000, there shall be four (4) cost-of-living adjustment dates: February 1, 2000, May 1,2000, August 1, 2000, and November 1, 2000.
(2) The cost-of-living adjustment added to the cost-of-living float on such date (if a Monday) or on the first Monday following such 2000 adjustment dates, if any, will be an adjustment of one cent ($.01) for each full four-tenths (.4) points movement in the BLS-CPI index figures (after the six cent ($.06) "set off" or "corridor" set forth in (D) (3) below based upon the following calculation months for the following 2000 adjustment dates:
February 1, 2000 - Subtract the September, 1999 index figure from the December, 1999 index figure.
May 1, 2000 - Subtract the December, 1999 index figure from the March, 2000 index figure.
August 1, 2000 - Subtract the March, 2000 index figure from the June, 2000 index figure.
November 1, 2000 - Subtract the June, 2000 index figure from the September, 2000 index figure.
If the calculation for any quarterly adjustment when dividing four-tenths (.4) into the applicable BLS-CPI index change between calculation month indexes results in tenths of the index left over, such tenths will be carried over into the BLS-CPI index change between the calculation month indexes for the next quarterly adjustment.
(3) The first six cents ($.06) which the above formula would otherwise generate for 2000 cost-of-living adjustments on the 2000 adjustment dates will not be paid in any form. No 2000 cost-of-living adjustments will be added to the cost-of-living float until the first six cents ($.06) which the application of the formula would produce has been exceeded and then only the amount generated in excess of six cents ($.06) shall be added to the cost-of-living float.
126. (E) (1) During the calendar year 2001, there shall be four (4) cost-of-living adjustment dates: February 1, 2001, May 1, 2001, August 1, 2001, and November 1, 2001.
(2) The cost-of-living adjustment added to the cost-of-living float on such date (if a Monday) or on the first Monday following such 2001 adjustment dates, if any, will be an adjustment of one cent ($.01) for each full four-tenths (.4) points movement in the BLS-CPI index figures (after the three cent ($.03) "set off" or "corridor" set forth in (E) (3) below) based upon the following calculation months for the following 2001 adjustment dates:
February 1, 2001 - Subtract September, 2000 index figure from the December, 2000 index figure.
May 1, 2001 - Subtract December, 2000 index figure from the March, 2001 index figure.
August 1, 2001 - Subtract the March, 2001 index figure from the June, 2001 index figure.
November 1, 2001 - Subtract the June, 2001 index figure from the September, 2001 index figure.
If the calculation for any quarterly adjustment when dividing four-tenths (.4) into the applicable BLS-CPI index change between the calculation month indexes results in tenths of the index left over, such tenths will be carried over into the BLS-CPI index change between the calculation month indexes for the next quarterly adjustment.
(3) The first three cents ($.03) which the above formula would otherwise generate for 2001 cost-of-living adjustments on the 2001 adjustment dates will not be paid in any form. No 2001 cost-of-living adjustments will be added to the cost-of-living float until the first three cents ($.03) which the application of the formula would produce has been exceeded and then only the amount generated in excess of three cents ($.03) shall be added to the cost-of-living float.
127. (F) In no event will a reduction of the BLS-CPI and the application of the formulas set forth in Subsection (C), (D) and (E) provide the basis for a reduction of an employee's base rate and such reduction shall reduce the cost-of-living "add on" only to the extent of the amount accumulated in the cost-of-living float for the quarter or quarters involved.
128. (G) No adjustments, retroactive or otherwise, shall be made due to any revision which may later be made in the published BLS-CPI index for any month or months specified in Subsections (C), (D) and (E) above.
129. (H) Should the BLS-CPI, in its present form and on the same basis (including composition of the "Market Basket" and Consumer Sample) as the last index published prior to January 1, 1999 become unavailable, the parties shall attempt to adjust this Article or, if agreement is not reached, request the Bureau of Labor Statistics to provide the appropriate conversion or adjustment which shall be applicable thereafter. The purpose of such conversion shall be to produce as nearly as possible the same result as would have been achieved using the BLS-CPI in its present form.
130. (I) In the event the Bureau of Labor Statistics does not issue the Consumer Price Index on or before the beginning of the pay periods referred to above, any adjustments required will be made at the beginning of the first pay period after receipt of the Index.
ARTICLE XIII
SAFETY AND HEALTH
131. The Company and the Union will cooperate in the objective of eliminating accidents and health hazards. The Company shall continue to make reasonable provisions for the safety and health of its employees at the plants during the hours of their employment. The Company, the Union and the employees recognize their obligations and/or rights under existing federal and state laws with respect to safety and health matters.
132. Protective devices and safety apparel necessary to properly protect employees from injuries shall be provided by the Company. Complaints concerning inadequate heating and/or ventilation will be given prompt and due consideration.
133. The Company will request a physical examination of each and every new employee hired before they report for work. They may from time to time request a physical examination of employees now on the payroll of the Company. It is expressly understood and agreed that any physical examination of employees on the payroll shall be made at the Company's expense and shall not be done for the express purpose of separating the employee from the payroll of the Company.
134. Employees injured at work who, upon direction of the Company approved medical provider or facility, are unable to complete their shift shall be paid at their classification rate for the difference between the hours actually worked on that day and
1) On Monday through Friday, the hours they were actually scheduled to work that day, but not more than eleven; or
(2) On Saturday, Sunday or holiday if the injury took place during the first four (4) hours of work, four (4) hours at the applicable premium rate of pay; or, if the injury took place after four (4) hours of work, the number of hours for which they were scheduled (not in excess of eight) at the applicable premium rate of pay.
Nothing herein is intended to prevent employees from seeing a doctor of their own choice, but if they do so on the day of the injury payment under this clause shall require the concurrence of the Company.
135. A Safety Committee consisting of three employees designated by the Union
and at least two management members designated by the Company shall be
established to cover the plant. The Safety Committee shall hold monthly meetings
at times determined by the Committee. The Committee may engage in periodic
safety tours of the items agendaed as part of its regular safety meetings. Time
spent in committee meetings and official committee plant tours shall be
considered hours worked to be compensated by the Company. The function of the
Safety Committee shall be to advise the plant management concerning safety and
health and to discuss legitimate safety and health matters but not to handle
grievances. In the discharge of its function, the Safety Committee shall:
consider existing practices and rules relating to safety and health, formulate
suggested changes in existing practices and rules, recommend adoption of new
practices and rules, review proposed safety and health programs developed by
management and review accident severity and frequency statistics. All accidents
involving fatalities or serious disabling injuries, or such other serious
situations as merit investigation, such as fires, explosions, or like
catastrophes shall be agendaed to the Safety Committee for consideration. Upon
request, the Union Safety Committee will be given access on a confidential basis
to reports or studies that directly relate to safety hazards, health or
dangerous conditions that exist in the plant (e.g., air sampling and noise
monitoring). A Union Safety Committee Member upon notice to the Management
Safety Council shall be given affordable time to present issues pertaining to
safety, at the Management Safety Council meeting.
136. The Union Chairperson or a designee shall be notified immediately when a serious accident has occurred. By the tenth of each month the Company will provide the Union a list of all employees who were sent from work to the physician for treatment during the prior month for work related (or claimed work related) injuries claimed at work during that month.
137. The Union Chairperson or a designee will be afforded time off from their job as may be required to visit departments at all reasonable times for the purpose of transacting the legitimate business of the Committee, after notice to the supervisor of the department to be visited and the permission (which shall not be withheld) from their own supervisor. The Company will pay up to four (4) hours/week toward the time spent in such activity.
138. New rules and regulations applicable to safety and health will be posed and discussed with the Safety Committee with the objective of increasing employee cooperation.
139. Recommendations of the Safety Committee shall be submitted to the appropriate Manager for their consideration and for such action that they may consider consistent with the Company's responsibility to provide for the safety and health of its employees during the hours of their employment and the mutual objective set forth in Par. 130.
140. Grievances involving safety matters shall first be raised orally between the grieving employee and their supervisor as provided in the grievance procedure. If the grievance is not satisfactorily resolved, the employee may immediately (within two (2) working days) file in writing in the second step under such procedure.
ARTICLE XIV
INSURANCE AND PENSIONS
141. Any benefits payable under said provisions will be coordinated so that the total Benefits Payable under all such group plans will not exceed 100% of the charges for such services.
142. The term "employer group or prepayment plan" is defined as any group plan for which any employer makes contributions or for which any employer provides a means of collecting contributions required by employees (including payroll deduction).
143. The Pension Agreement, separately executed, shall remain in effect for the term of this Agreement.
ARTICLE XV
SEVERANCE ALLOWANCE
144. When in the sole judgment of the Company it decides to permanently discontinue the operation of a plant or a substantial section of a plant and finds it necessary to terminate the employment of employees as a result thereof, any employee whose employment is terminated either directly or indirectly as a result thereof and who is not entitled or indirectly as a result thereof and who is not entitled to other employment with the Company under the provisions of Article VI of this Agreement or Par. 146 below will be entitled to a severance allowance in accordance with and subject to the provisions of this Article.
145. Eligibility. To be eligible for a severance allowance an employee must have accumulated one or more years of seniority at the time of termination, as computed in accordance with Article VI of this Agreement.
146. As an exception to Par. 145 above, however, any employee otherwise eligible for a severance allowance who is offered a job within the bargaining unit under the provisions of Article VI of this Agreement will not be entitled to severance allowances whether they accept or reject the job offer. If such a transfer results directly in the permanent termination of some other employee, that employee will then be eligible for a severance allowance, subject to all of the other provisions of this Article.
147. In lieu of severance allowance, the Company may offer an eligible employee a job outside the bargaining unit. The employee will have the option of either accepting the job offered or receiving severance allowance.
148. Scale of Allowance - An eligible employee will receive a severance allowance based on his seniority at the time of termination as follows:
Weeks of Seniority as of Date Severance of Termination Allowance -------------------- --------- 1 year but less than 2 years 2 weeks |
2 years but less than 5 years 4 weeks 5 years but less than 10 years 6 weeks 10 years but less than 20 years 8 weeks 20 years or more 12 weeks |
149. Calculation of Allowance - A week of severance allowance will be calculated in accordance with the provisions for calculating a week of paid vacation as set forth in Article V of the Agreement.
150. Payment of Severance Allowance - Payment of any severance allowance for which an employee may be eligible will be made in a lump sum at the time of termination.
151. Notwithstanding any other provisions of this Article, any employee who is
eligible for a severance allowance under the provisions of this Article, may, at
the time of termination, elect to be placed on layoff status for a period of one
(1) year, rather than to be terminated and receive severance allowance. At the
end of such period, such an employee may elect to remain on layoff status or to
be terminated and receive the severance allowance to which they are entitled. If
such an employee elects to remain on layoff at the expiration of such period,
they will forfeit their right to the severance allowance to which they would
otherwise be eligible.
152. An employee who voluntarily terminated their employment with the Company before they are terminated by the Company will not be entitled to a severance allowance.
153. Nonduplication of Allowance. Severance allowance shall not be duplicated for the same severance, whether the other obligation arises by reason of contract, law, or otherwise. If an individual is or shall become entitled to any discharge, liquidation, severance or dismissal allowance or payment of similar kind by reason of any law of the United States of America or any of the states, districts, or territories thereof subject to its jurisdiction, the total amount of such payments shall be deducted from the severance allowance to which the individual may be entitled under this Article, or any payment made by the Company under this Article may be offset against such payments. Statutory unemployment compensation payments shall be excluded from the nonduplication provisions of this Section, except that the severance allowance will be allocated by the Company to the equivalent number of weeks immediately following termination.
ARTICLE XVI
TERMINATION, EXPIRATION AND SCOPE
154. The terms and conditions of the Agreement shall continue in full force and effect until 12:01 a.m. February 1, 2009, and shall continue in full force and effect indefinitely thereafter, provided, however, that either party may terminate this Agreement at any time on or after February 1, 2009 by giving to the other party at least sixty days prior written notice by certified mail of its election to terminate. In the event the Company shall desire such termination of the Agreement, such notice shall be sent by certified mail to the District Office of the United Steelworkers, 1126 South 70th Street, Suite S106A, West Allis, WI 53214 and a copy shall be sent to the offices of Local Union 3245 at 1620 Shore Drive, Beloit, Wisconsin, 53511. In the event the Union shall desire such termination of the Agreement, notice of such desire shall be sent by the Union by certified mail to the offices of the Company, 449 Gardner Street, South Beloit, IL 61080. Either party may by written notice change the address to which certified mail notice to it shall be given.
ARTICLE XVII
COMPLIANCE WITH LAW
155. It is understood and agreed that if any of the terms and provisions of this Agreement are, or become in violation of any State or Federal laws, they are null and void so long as they may be in violation, and it is further agreed that the parties hereto shall immediately meet for the purpose of resolving any term or provisions so indicated.
UNITED STEELWORKERS WARNER ELECTRIC, LLC. ------------------------------------- ---------------------------------------- Leo W. Gerard Stan Owens President United Steelworkers Operation's Manager ------------------------------------- ---------------------------------------- James D. English Charles Evans Secretary-Treasurer Human Resources Manager ------------------------------------- ---------------------------------------- Thomas Conway Gary Simpler Vice President (Administration) Legal Counsel ------------------------------------- ---------------------------------------- Fred Redmond Tim McGowan Vice President (Human Affairs) Vice President Human Resources ------------------------------------- Jon Geenen ---------------------------------------- Director District 2 Judy Crandall Human Resource Representative ------------------------------------- Bill Breihan Staff Representative ------------------------------------- Steve Reynolds President, Local 3245 ------------------------------------- Robert Caples Committeeperson ------------------------------------- Gary Gillett Committeeperson ------------------------------------- James Elliott Committeeperson ------------------------------------- Jada Hammond Committeeperson ------------------------------------- Phil Sholes Committeeperson |
September 19, 1986
MR. LAWRENCE DUNCAN
STAFF REPRESENTATIVE
United Steelworkers of America
Beloit, Wisconsin 53511
Dear Mr. Duncan:
Our policy is to utilize our own employees to the maximum practical extent in production and maintenance work. At the same time, it is recognized that problems of skill, equipment, time, economy, and know-how may render it necessary or expedient to subcontract. Whenever the Union feels that subcontracting involves work which could be done economically and within the prescribed time limits by bargaining unit employees, the Company will discuss and explain the matter upon request to the Union. It is further agreed that the Company will notify the Union in writing prior to subcontractors coming into the plant to perform such work or such work being sent out, or contracts to perform such work being signed by management. This letter is not merely meant to constitute a notification procedure but it is intended to, where possible, provide sufficient advance notice so as to allow the Union to, upon request, discuss the decision.
Sincerely,
Pension
For employees who retire or otherwise become eligible on or after January 30, 2005 the following formulas apply:
Formula to be used for benefits received effective January 30, 2005: $31.00 multiplied by years of accrued service.
For purposes of pension accrual years of continuous service will be frozen July 3, 2006. Employees who reach 30 years of service and who are at least 57 years of age, will be eligible to receive a lump sum payment based on frozen pension accrued .
APPENDIX "A"
ASSEMBLER A (DIRECT LABOR) 8/6/06 1/28/07 1/27/08 -------------------------- ------ ------- ------- Incumbent Rate 14.20 14.48 14.77 Starting Wage Rate 13.20 13.48 13.77 Wage Progression (3 months post hire) 13.45 13.73 14.02 Wage Progression (6 months post hire) 13.70 13.98 14.27 Wage Progression (9 months post hire) 13.95 14.23 14.52 Wage Progression (12 months post hire) 14.20 14.48 14.77 |
ASSEMBLER B (DIRECT LABOR) 8/6/06 1/28/07 1/27/08 -------------------------- ------ ------- ------- Incumbent Rate 13.51 13.78 14.06 Starting Wage Rate 10.50 10.71 10.92 Wage Progression (3 months post hire) 10.75 10.97 11.19 Wage Progression (6 months post hire) 11.00 11.22 11.44 Wage Progression (9 months post hire) 11.25 11.48 11.71 Wage Progression (12 months post hire) 11.50 11.73 11.96 |
MACHINIST (DIRECT LABOR) 8/6/06 1/28/07 1/27/08 ------------------------ ------ ------- ------- Incumbent Rate 16.84 17.01 17.18 Starting Wage Rate 14.00 14.28 14.57 Wage Progression (3 months post hire) 14.55 14.84 15.14 Wage Progression (6 months post hire) 15.10 15.40 15.71 Wage Progression (9 months post hire) 15.65 15.96 16.28 Wage Progression (12 months post hire) 16.20 16.52 16.85 |
SHOP COORDINATOR (DIRECT LABOR) 8/6/06 1/28/07 1/27/08 ------------------------------- ------ ------- ------- Incumbent Rate 17.30 17.47 17.64 Starting Wage Rate 14.50 14.79 15.09 Wage Progression (3 months post hire) 15.03 15.33 15.64 Wage Progression (6 months post hire) 15.56 15.87 16.19 Wage Progression (9 months post hire) 16.09 16.41 16.74 Wage Progression (12 months post hire) 16.62 16.95 17.29 |
MATERIAL HANDLER (INDIRECT LABOR) 8/6/06 1/28/07 1/27/08 --------------------------------- ------ ------- ------- Incumbent Rate 12.80 13.06 13.32 Starting Wage Rate 10.50 10.71 10.92 Wage Progression (3 months post hire) 10.75 10.97 11.19 Wage Progression (6 months post hire) 11.00 11.22 11.44 Wage Progression (9 months post hire) 11.25 11.48 11.71 Wage Progression (12 months post hire) 11.50 11.73 11.96 |
INSPECTOR (INDIRECT LABOR) 8/6/06 1/28/07 1/27/08 -------------------------- ------ ------- ------- Incumbent Rate 15.54 15.70 15.86 Starting Wage Rate 13.00 13.26 13.53 Wage Progression (3 months post hire) 13.55 13.82 14.10 Wage Progression (6 months post hire) 14.10 14.38 14.67 Wage Progression (9 months post hire) 14.65 14.94 15.24 Wage Progression (12 months post hire) 15.20 15.50 15.81 |
TRUCK DRIVER (INDIRECT LABOR) 8/6/06 1/28/07 1/27/08 ----------------------------- ------ ------- ------- Incumbent Rate 15.19 15.34 15.49 Starting Wage Rate 14.00 14.28 14.57 |
TRUCK DRIVER DIESEL (INDIRECT LABOR) 8/6/06 1/28/07 1/27/08 ------------------------------------ ------ ------- ------- Incumbent Rate 15.72 15.88 16.04 Starting Wage Rate 14.25 14.54 14.83 |
TOOL & DIE MAKER (INDIRECT LABOR) 8/6/06 1/28/07 1/27/08 --------------------------------- ------ ------- ------- Incumbent Rate 18.69 18.69 18.88 Starting Wage Rate 17.62 17.97 18.33 |
SENIOR TOOL & DIE MAKER (INDIRECT LABOR) 8/6/06 1/28/07 1/27/08 ---------------------------------------- ------ ------- ------- Incumbent Rate 19.07 19.07 19.26 Starting Wage Rate 17.62 17.97 18.33 |
MASTER MECHANIC (INDIRECT LABOR) 8/6/06 1/28/07 1/27/08 -------------------------------- ------ ------- ------- Incumbent Rate 18.45 18.45 18.63 Starting Wage Rate 17.39 17.74 18.09 |
SENIOR MASTER MECHANIC (INDIRECT LABOR) 8/6/06 1/28/07 1/27/08 --------------------------------------- ------ ------- ------- Incumbent Rate 18.89 18.89 19.08 Starting Wage Rate 17.39 17.74 18.09 |
ELECTRICIAN (INDIRECT LABOR) 8/6/06 1/28/07 1/27/08 ---------------------------- ------ ------- ------- Incumbent Rate 19.48 19.48 19.67 Starting Wage Rate 18.36 18.73 19.10 |
SENIOR ELECTRICIAN (INDIRECT LABOR) 8/6/06 1/28/07 1/27/08 ----------------------------------- ------ ------- ------- Incumbent Rate 19.88 19.88 20.08 Starting Wage Rate 18.36 18.73 19.10 |
APPENDIX "B"
(RATE RETENTION GROUPS)
1. Material Handler
2. Assembler A, Assembler B
3. Machinist
4. Shop Coordinator
5. Inspector
6. Truck Driver
7. Truck Driver Diesel
8. Senior Tool & Die, Tool & Die
9. Senior Master Mechanic, Master Mechanic
10. Senior Electrician, Electrician
APPENDIX "C"
OVERTIME DISTRIBUTION AGREEMENT
1. Supervisors shall be responsible for the equilization of overtime and for maintaining and the daily posting of overtime distribution records; each group showing the names of the employees in the group and the overtime hours worked and/or declined by each employee, total overtime hours charged, and the employee's shift and overtime group to which assigned. Overtime hours charged but not worked will be identified with a circle around the hours charged.
2. Overtime within each overtime group shall be maintained within the thirty straight time hour spread, regardless of shift.
3. Only overtime that is offered to an employee on or before his shift prior to the shift on which the overtime is to be worked will be charged to an employee who declines the offered overtime. It is agreed that in the event an employee is scheduled to work overtime for any of the reasons spelled out below, they shall be charged. There is no intent to allow anyone to arbitrarily schedule an employee to work overtime just for the sake of charging them to bring their overtime in line without working anyone. For the purpose of charging overtime, it is understood that, the overtime period begins at the time the employee completes a normal work day (8 hours).
4. No employee shall be discriminated against or disciplined for their inability to work overtime, except that an employee shall be required to work overtime if they have agreed to do so, or if they have been notified to work overtime at least forty (40) hours ahead of time and have not been excused.
5. Overtime hours worked or declined by the employee shall be charged on the basis of straight time for each hour.
6. When an employee new to the Company has passed sixty days of their probationary period, they shall be charged with the average overtime hours in the overtime group to which they are assigned. The new employee will not work overtime hours prior to their 60th day unless all employees in their overtime group are assigned to work overtime, or unless all other available employees in their overtime group have been asked to work.
7. When an employee is transferred (other than temporary transfers) they shall be charged with the average of the overtime group to which they are assigned on the first day of their transfer.
8. When an employee in an overtime group is absent for any reason, they shall be charged for the overtime hours that they could have worked had they been available.
9. When the Company attempts, but is unable to contact any employee not on Company premises, the employee shall not be charged with the overtime hours which the Company was attempting to offer them.
10. The Company may schedule employees to continue work during overtime hours which they were performing during straight-time hours even though this may create a temporary imbalance of overtime opportunities within the limitations specified in Paragraph 2 above.
11. When an overtime group is exhausted the Company will use an employee from that same occupational group provided there is not an experienced employee currently in the area.
12. If an overtime group is not exhausted, and an employee from another overtime group performs overtime work in that overtime group (except as is provided in Paragraph 34, Article IV) the Company shall reimburse the low employee in the overtime group for the actual overtime hours they would otherwise have worked, at the appropriate overtime premium rate. It is recognized that time to time an employee scheduled for overtime may fail to report as scheduled, and the Company may assign an employee from another overtime group if necessary, or an employee from the proper overtime group, whichever is practicable, without incurring any violation of these overtime distribution provisions, until such time as with reasonable diligence a proper employee from the proper overtime group can be assigned. For purposes of this Appendix, the availability of an employee in an overtime group shall be considered exhausted if all hours of overtime opportunity are offered to the employees within the overtime group in a twenty-four (24) hour period in accordance with the provisions of Article III and Article IV of this Agreement.
13. If the Company bypasses the lowest available employee in the overtime group (and the overtime hours of such employee are lower than the permissible spread at the time the overtime begins), the Company shall be liable to reimburse such employee at the appropriate overtime premium rate for the actual overtime hours they otherwise would have worked. Employees who receive reimbursement without working shall be charged with the appropriate number of hours on the overtime list.
14. The overtime distribution total shall continue from year to year without a cutoff date being applicable. In other words, if an employee is behind on their overtime opportunities for the previous contract year, they shall have first opportunity for overtime hours in the succeeding year. The overtime totals shall be carried over at the end of each contract year in the same manner as they are carried over from month to month during the contract year.
15. For purposes of overtime distribution only, a vacation taken in weekly increments will be considered to start on Friday after the completion of the employee's shift and finishing at the start of the employee's shift on Monday following the week or the multiple of weeks vacation. In the case of a day or day's vacation immediately before a weekend, the weekend shall be considered as part of the employee's vacation with work commencing on their regular shift on Monday. If
the employee elects to take a day or day's vacation starting Monday, the vacation will be considered as having started on the previous Friday at the end of the employee's shift. In the case of single day's vacation taken on Friday or Monday, an employee may at their option, if asked, work weekend overtime.
16. In scheduling weekend overtime the following procedure shall apply:
(A) The supervisor involved will, in accordance with normal practice, determine how many, and which employees are required for Friday, Saturday, and Sunday overtime.
Should the supervisor determine to ask an employee who would be "on vacation" (which, in accordance with this paragraph 15 of the Overtime Distribution Agreement, begins at the end of their shift on Friday) the employee will be charged for overtime if asked. If the employee's entire overtime group has been scheduled, the employee will be considered "asked."
(B) The Company may, either by asking the employee as an individual or by scheduling their entire overtime group, offer an employee overtime work on the Friday or Saturday or Sunday which begins their vacation. No disciplinary action will be taken if the employee refuses this overtime unless they have accepted the overtime assignment and fail to report.
When the Company schedules or asks an entire overtime group for a week or more at a time all employees in that overtime group will be charged for all hours scheduled or asked unless the employees overtime is cancelled by a supervisor. When an employee is on leave of absence or vacation they will be charged for overtime hours worked if one employee above the employee on leave of absence or vacation and all the employees below are asked to work.
(C) With the exception of the Friday or Saturday or Sunday which begins as employee's vacation, an employee on vacation will not be eligible for overtime assignments during their vacation, but will however be charged for overtime in accordance with Paragraph 8 of the Overtime Distribution Agreement.
17. If an employee has a physical limitation, known to the supervisor, due to a dermatitis condition, back or weight limitation, or legal restriction, etc., so that they are precluded from these tasks during straight time hours, they will not be permitted to work at these tasks on overtime hours. However, they shall be charged for all overtime hours that would have been available to them, provided that another employee actually performs the work. Such limitation shall be noted on the overtime record.
18. The Company shall make every attempt to notify employees of overtime as soon as possible.
APPENDIX "D"
OVERTIME GROUPS
Group #1 - Material Handler Group #2 - Assembler A Group #3 - Assembler B Group #4 - Machinist Group #5 - Shop Coordinator Group #6 - Inspector Group #7 - Truck Driver Group #8 - Truck Driver Diesel Group #9 - Senior Tool & Die, Tool & Die |
Group #10 - Senior Master Mechanic, Master Mechanic Group #11 - Senior Electrician, Electrician
LETTER OF UNDERSTANDING
Any overtime groups agreed to, are subject to change as new cells are developed.
ENROLLMENT DATES
Group Health Insurance
The participant can re-enroll on January 1st of each year. The participants cannot make a change in plan coverage unless there is a qualifying event such as marriage, birth, etc. Changes such as adding a dependent, dropping a dependent may be made at any time during the year.
Option Life
Participants may enroll or increase their coverage once a year during the first two calendar weeks of December. They may stop at any time with 30 days advanced notice.
401(k)
Initial enrollments, changes in the amount of contribution, investment elections, and investment transfers can be done at any time. Contributions may be stopped at any time. Participants may reenroll the first day of the following month after they stop deductions.
401(K) PROGRAM EFFECTIVE JULY 1, 2006, COMPANY MATCHES 50% UP TO 6% (FOR TOTAL OF 3% OF ELIGIBLE WAGES)
Employee Contribution Employer Contribution Total --------------------- ---------------------- ---------------------- 1% of eligible wages 0.5% of eligible wages 1.5% of eligible wages 2% 1.0% 3.0% 3% 1.5% 4.5% 4% 2.0% 6.0% 5% 2.5% 7.5% 6% 3.0% 9.0% |
APPENDIX "E" INSURANCE
SCHEDULE OF BENEFITS
FOR YOU FOR YOUR DEPENDENTS ------- ------------------- Life insurance: Life insurance: Spouse $4,000 Each $35,000 effective 1/30/05 dependent child $2,000 Additional life and AD&D: Additional spouse and dependent life In $1,000 increments combined maximum insurance: Spouse $10,000/dependent coverage $55,000 through payroll $4,000 available through payroll deduction. deduction. Sickness & Accident: Not applicable. 67% of base pay up to a maximum of $380 per week effective 8/1/2006. |
Life insurance and accidental death and dismemberment insurance benefits are both occupational and non-occupational. All other benefits are non-occupational.
No benefits for A.D. & D. shall be payable for any loss resulting from taking poison, asphyxiation, or inhalation of gas, self-destruction, acts attributable to war and other causes
specified in the policy; or, when the date of accidental bodily injury is more than one hundred twenty days from the date the loss is sustained.
Accident and sickness benefits begin on the first day of accident, first day of hospitalization or outpatient surgery, and eighth day of sickness, and continue for a maximum of twenty-six weeks during any one period of disability. Worker's Compensation to be supplemented by Accident and Sickness Benefit including a payment at the per diem Sickness and Accident level (1/5th of the Sickness and Accident Weekly Benefit Amount) for the Worker's compensation waiting period (not including the day of the accident which is covered by Paragraph 133 of the Collective Bargaining Agreement). Such supplement for the waiting period may be by direct payment or insured with the Sickness and Accident carrier and if the waiting period is subsequently paid by any other insurance, by any governmental agency or from any other source, the Company shall be entitled to reimbursement from the employee by payroll deduction, set off from future Worker's compensation payments from the Worker's Compensation insurance carrier or any other reasonable method of recoupment, other than recoup from a private policy carried by the individual employee where he or she is paying the full premium.
The individual certificate will define a continuous disability or confinement.
"Dependents" include only, your spouse and unmarried children from the date of live birth until nineteen years, stepchildren and legally adopted children are eligible dependents; but parents or other relatives are not eligible for dependent coverage even though supported by you. Children after attainment of age nineteen while incapable of self support because of a disabling sickness or injury that commenced prior to age nineteen are covered provided such child was eligible for coverage as a dependent prior to age nineteen. Such children must otherwise meet the definition of dependent children, must legally reside with you, and must be principally supported by you. Children until age twenty seven are eligible dependents if they are full-time students at an accredited school provided they are unmarried and otherwise a dependent.
Eligibility - A regular employee actively at work will be eligible immediately. Future new regular employees will become eligible on the first day of the month after hire.
Employees and dependents who retire between the ages of 57 and 65 shall have their coverage continued (except for regular life insurance, A.D. & D., and weekly sickness and accident benefits) until such time as they are qualified for Medicare or Medicaid or in the case of children until they no longer qualify because of age, disability, marriage, etc.
INSURANCE AGREEMENT
THIS AGREEMENT is made and entered into this 17th day of May 2006 by and between WARNER ELECTRIC, LLC or its successors or assigns (hereinafter referred to as the "Company") and the UNITED STEELWORKERS (hereinafter referred to as the "Union") on behalf of itself and LOCAL UNION NO. 3245.
Definitions
1. Wherever used herein:
(a) "Employee" means an individual in the bargaining unit who has completed their first 60 days (except for health care);
(b) "Program" means the program of insurance benefits established by this Agreement;
Program of Insurance Benefits
2. The Program shall be applicable to Employees while this Agreement is in effect in accordance with the provisions of this Agreement, subject to the following provisions:
(a) Employees not actively at work on May 17, 2006 shall not be eligible to participate under the Program until they return to active work on or May 17, 2006 provided, however, that any Employee who shall return to work and who shall subsequently become eligible for benefits due to a recurrence of a disability or claim which commenced prior to May 17, 2006, will be eligible for benefits at the applicable rates of benefits provided for under the Program, but only for the balance of the period for which he would have been entitled to benefits under the Prior Program.
(b) The amounts of life insurance after retirement provided for under the Program shall be applicable in accordance with the Benefit Continuation Clause for Early Retirement Window Plan.
Medical & Dental Plan
3. (a) Effective August 1, 2006, a comprehensive Preferred Provider Organization (PPO) medical, offering both in and out of network benefits, will become effective for all employees. A summary of the plan benefits is outlined below:
ALTRA BASIC PLAN
SCHEDULE OF BENEFITS
BENEFIT IN-NETWORK OUT-OF-NETWORK ------- ---------- -------------- Annual Deductible $500/$1,000 $1,000/$3,000 Coinsurance 80%/20% 60%/40% Out of Pocket Maximum $2,000/$4,000 $4,000/$8,000 Lifetime Maximum Unlimited Unlimited OFFICE VISIT COPAYMENTS Primary Care Physician $15 per visit N/A Specialist $30 per visit N/A INPATIENT HOSPITAL SERVICES Inpatient Care 20% after deductible 40% after deductible Surgery & Anesthesia 20% after deductible 40% after deductible Physicians Services 20% after deductible 40% after deductible X-ray & Lab Services 20% after deductible 40% after deductible OUTPATIENT SERVICES Outpatient Surgery 20% after deductible 40% after deductible MATERNITY SERVICES Hospital Services 20% after deductible 40% after deductible Prenatal-Postpartum Office Visit Copay $15 or $30 40% after deductible MENTAL HEALTH/SUBSTANCE ABUSE Inpatient 20% after deductible 40% after deductible As many days as medically necessary. Outpatient Office Visit Copay $15 or $30 40% after deductible EMERGENCY ROOM $50 Copay 40% after deductible *(waived if admitted) MEDICAL SERVICES Office Visits Office Visit Copay $15 or $30 40% after deductible Gynecological Visits Office Visit Copay $15 or $30 40% after deductible Specialist Visit Office Visit Copay $15 or $30 40% after deductible Well Child (Immunizations) Office Visit Copay $15 or $30 40% after deductible Annual Physical Office Visit Copay $15 or $30 40% after deductible X-ray & Lab 20% after deductible 40% after deductible Allergy Tests & Treatment Office Visit Copay $15 or $30 40% after deductible PRESCRIPTION DRUG Generic $10 Copay |
Brand $25 Copay Non-Formulary $40 Copay Mail Order 90-day supply, $20, $50, $80 Retail Not Available VISION CARE Eye Exam $60 - per plan year, no network Eyewear $100 allowance per plan year OTHER SERVICES Skilled Nursing Facility 20% after deductible 40% after deductible Home Health Care 20% after deductible 40% after deductible Durable Medical Equipment No Copay, no deductible 40% after deductible Chiropractic Services, $500 Office Visit Copay $15 or $30 40% after deductible Maximum |
Weekly Medical Plan Contribution
8/6/2006 1/28/2007 1/27/2008 1/4/2009 -------- --------- --------- -------- Single $20.35 $28.81 $34.00 $ 40.12 Employee& Spouse $38.06 $53.90 $63.60 $ 75.04 Employee & Child(ren) $36.39 $51.53 $60.81 $ 71.76 Family $53.07 $75.15 $88.67 $104.63 |
On an annual basis, if an additional plan is made available to non-bargaining unit employees, this plan will be made available to bargaining unit employees subject to bargaining with the union.
Contributions will be set at the lesser of 30% of the actual premium or a guaranteed maximum as stated in the medical and dental charts.
Year 2006 deductibles will be prorated to 5/12 of the plan's requirement ($208 per person/$416 per family for in-network care).
Dental Plan
Dental benefits are provided based on the schedule below:
Annual Deductible: $25/$75 Benefit Type: Preventive ($0 Ded.) 100% Basic 80%* Major 50%* Orthodontic Benefit ($0 Ded.) 50%* Maximum Annual Benefit $1,000 per person Orthodontic Lifetime Maximum $1,500 per person |
* DeltaPreferred and DeltaPremier dentists will accept Delta Dental's payment, plus any required employee coinsurance and any applicable deductible as payment in full. These dentists will file your claims for you. If you go to a non-network dentist, payment will be made directly to you unless you assign benefits to the dentist. Delta Dental will pay the lower of usual, reasonable, and customary as determined by the Plan of the state in which services are rendered or the fee the dentist bills for covered services. You will be responsible for paying the difference between the non-participating dentist's charge and Delta Dental's payment.
Weekly Dental Plan Contribution
1/1/2006 1/1/2007 1/1/2008 1/1/2009 -------- -------- -------- -------- Single $1.76 $2.00 $2.00 $2.00 Couple $3.01 $3.39 $3.39 $3.39 Family $5.15 $5.80 $5.80 $5.80 |
Hearing aids and the associated examination will be self-funded at 50/50 to a maximum Company payment of $2,500 every three (3) years. Eligible dependents are covered.
(a) Employees with life insurance and AD & D coverage shall have the right, at their option, to increase both coverages equally through payroll deduction, at their own expense, in $1,000 increments, at $.44/month per $1000, up to a maximum of $55,000 life insurance coverage and $55,000 AD & D coverage. Coverage shall be on a monthly basis. Employees may initiate, increase, or decrease such additional coverages during the first two (2) weeks of December and may terminate at any time upon thirty (30) days written notice.
(b) The dental program shall not be subject to the insurance continuation provisions of Section 11 of this Agreement, nor shall this program be provided for future retirees.
(c) Employees with dependent life insurance coverage shall have the right, at their option, to increase the coverage through payroll deduction, at their own expense at the rates listed below. The additional $10,000 spouse/$4,000 dependent insurance coverage shall be paid on a monthly basis through payroll deduction.
Employees may initiate, increase, or decrease such additional coverages during the first two (2) weeks of December and may terminate at any time upon thirty (30) days written notice.
Cost Age of Per Family Employee Per Month -------- ---------- Less than 30 $ 1.50 Age 30-34 $ 1.60 Age 35-39 $ 1.90 Age 40-44 $ 2.60 Age 45-49 $ 3.80 Age 50-54 $ 5.60 Age 55-59 $ 8.40 Age 60-64 $12.20 Age 65-69 $18.70 |
Cost of Benefits
4. The cost of the benefits under the Program shall be paid by the Company, except as provided below in this Paragraph 4 and 7 hereof:
(a) Any employee on layoff who elects to continue basic life insurance after the last month of layoff for which such life insurance is continued without contribution by him will be required to pay $.44 per month (or the applicable group premium rate at the time of the layoff) per $1,000 of basic life insurance for each month as to which he is eligible in order to continue such insurance.
(b) The amounts required to be paid for benefits provided under law in excess of basic Program benefits shall be paid entirely by the Employees.
Participation by Employees
5. Each employee shall be a participant in the Program and the amount, if any, which he shall be required to contribute to the cost thereof shall be deducted by the Company from his pay. Each Employee shall furnish to the Company any such written authorization or assignment (in a form agreed to by the Company and the Union) as shall be necessary to authorize the deduction from his pay of the amount of any contributions.
Changing selection during plan year is possible only if you have a change in your family situation. This would include:
- The birth or adoption of a child.
- Marriage or divorce.
- Death of your spouse or other dependent.
- Significant change in employee or spousal health coverage attributable to the spouse's employment.
- Employee or spousal employment status change.
Other major changes may be considered, depending on the circumstances.
Requirements of Law
6. It is intended that the provisions for the insurance benefits which shall be included in the Program shall comply with and be in substitution for the provisions for similar benefits which are or shall be made by any applicable law or laws. Where, by agreement, certain basic benefits under the Program are provided under law rather than under the Program, the Company will pay the amount required to be paid therefor, including any employee contribution required by law on account of such benefits. The Company shall, after consultation with the Union, reduce the benefits of the Program to the extent that benefits provided under any law would otherwise duplicate any of the Program benefits.
Effective January 30, 2005, active and retired employees and their dependents, who are 65 years or older and who are entitled to Medicare, will not be reimbursed for the Part B monthly premium, if they are paying such premium under the Medicare Program. In addition, the Company will not reimburse the monthly Part B premium for disability retirees retiring on or after January 30, 2005 if they are paying such premium under the Medicare program.
Additional and Alternate Benefits
7. The Program shall be in substitution for any and all insurance benefits or payments to or on behalf of Employees for death, sickness or accident, hospitalization, medical or surgical service provided by the Company in whole or in part, except as the Company and the Union have agreed or may agree in writing.
Administration of the Program
8. The Program shall be administered by the Company or through arrangements provided by it. Except as may otherwise be provided in this Agreement, the Company will arrange to have the hospitalization and physicians' services benefits under the Program provided through contracts with carriers selected by the Company, which contracts, respectively, shall be consistent with this Agreement and shall provide benefits in the amounts listed in Appendix E. Sickness and accident benefits and life insurance shall be provided by such method and through such carriers, if any, as the Company in its sole discretion shall determine.
All benefits except life insurance, accidental death and dismemberment and weekly income benefits shall be paid directly to the provider of the service for which benefits are payable.
Administration of Sickness and Accident Benefits
9. The payment of sickness and accident benefits is an obligation of the Company, but the Agreement with the Union permits the Company to provide the payment through a policy with an insurance company. The Company performs important administrative functions in connection with the handling of claims, including the issuance of benefit checks. In the typical case, such handling is routine and a claim is paid within two weeks after it is received by the Company. The Company is authorized to make benefit payments on claims without prior approval of the insurance company when Company personnel engaged in claims work determine the claim meets
the standards established by the insurance company for Company approval. If you have a claim which does not meet these standards it is referred to the insurance company for decision and you are notified of such action within two weeks after the claim is received by the Company. In reaching its decision, the insurance company may take reasonable steps to investigate the medical and other factual aspects of the claim.
Life Insurance for Disability Retirees
10. An employee who shall retire on or after January 30, 2005 under the
disability provisions of the Company Pension Plan at or after age 57 and prior
to age 62 will have his life insurance (in the full amount set forth in Appendix
E) continued until age 62 at which time it will be reduced to $5,000.00
An employee who shall retire under the disability provisions of the Company Pension Plan prior to age 57 will receive in equal monthly installments over a five year period the full face value of his life insurance benefit then in effect. If death occurs before the full face value has been paid, his beneficiary will be paid the difference between said full face value and the amount already paid.
At the time an employee in any of the above categories leaves the employment of the Company, Accidental Death & Dismemberment coverage will cease.
BENEFIT CONTINUATION CLAUSE FOR EARLY RETIREMENT WINDOW PLAN
The Company and the Union have agreed to an early retirement window plan which shall be available to designated employees who notify the Company of their election to retire by August 1, 2006 and retire before December 31, 2006.
Employees who retire in accordance with the above-described early retirement window plan ("early retirees"), and employees who have retired between December 1, 2004 and May 5, 2006, shall be eligible for continued coverage under the Company's medical and retiree life insurance plans until they reach age 65.
Early retirees who elect continued coverage shall make the same contributions and receive the same medical benefits as active employees. Early retirees shall be eligible for single, couple or family coverage, subject to the applicable contribution. Contributions to the cost of insurance shall be made by the retiree by sending in a monthly check to the Company by the 1st of each month.
Early retirees between the ages of 57 and 65, who elect single, couple or family coverage under the medical plan, shall have their medical coverage continued until such a time they are qualified for Medicare or Medicaid or in the case of children until they no longer qualify because of age, disability, marriage, etc.
Early retirees shall be subject to the same plan terms and rules as active employees, including but not limited to dates for changing coverage, contributions, exclusions, co-pays, deductibles, benefits, limits on benefits, etc. Such terms and rules may be amended, subject only to the Company's duty to negotiate with the Union over changes in benefits affecting active employees. If any amendments are made to the terms affecting active employees, early retirees
will be subject to the same amendments as active employees. In the event coverage for active employees is terminated, coverage for early retirees shall also be terminated.
For purposes of COBRA coverage, retirement shall be treated as a qualifying event and the maximum period for COBRA coverage shall be measured from the date of retirement.
This clause shall survive expiration of the collective bargaining agreement. This clause shall be binding on the Company and its successors.
RETIREMENT OPTION 1.
SPECIAL RETIREMENT PROGRAM
- Employees age 57+ with 30 years of service as of December 31, 2006
- Must elect to retire by August 1, 2006
- Still eligible for $2,000 ratification payment
- Retiree healthcare benefits remain intact. Retiree healthcare available at applicable (currently 25%, 30% effective 1/1/2007) active employee contribution rate, OR a one-time $13,000 cash payment in lieu of healthcare benefits.
- Lump sum pension payment option is available.
- Retiree healthcare assurance letter provided.
- Warner Electric management will determine last day worked, which will be prior to 12/31/2006 or a later date by mutual agreement.
RETIREMENT OPTION 2.
EARLY RETIREMENT PROGRAM
- Employees age 57+ with 5 years of service as of December 31, 2006
- Must elect to retire by August 1, 2006
- Still eligible for $2,000 ratification payment
- $13,000 cash payment
- Retiree healthcare and retiree life insurance is no longer available
- Plan does not allow a lump sum pension payment for employees with less than 30 years of service.
- Warner Electric management will determine last day worked, which will be prior to 12/31/2006 or a later date by mutual agreement.
Extension of Benefits
11. If an employee shall be absent from the service of the Company for a period not to exceed thirty (30) months, due to non-occupational disability (validated by doctor's certificate) the insurance program shall be kept in effect for such employees during such thirty (30) month's period only. In cases of absence due to occupational disability, the insurance program shall be kept in effect for up to five (5) years.
In cases of layoff of employees with less than two (2) years of seniority, the group insurance program shall cease on the last day worked except that such employee shall have the conversion privileges provided for in the master insurance policy. In cases of layoff of employees with two (2) or more years of seniority, sickness and accident benefit coverage will cease on the last day worked; life insurance, hospitalization benefits, and surgical benefits shall be kept in effect for two (2) months after the end of the month in which the employee last worked; life insurance may be continued thereafter for a period of an additional twelve (12) months by paying the required premiums in advance to the Company in the amount specified in Paragraph 4 (a) above.
In cases where an active employee dies with five (5) but less than ten (10) years of seniority with dependent coverage in effect at the time of death, the dependent coverage (hospital, surgical, medical, dental and drug only) will be continued for the dependents during the month of death and the following six months assuming continued payment of the monthly premium contribution provided for in the group insurance program. This extension shall be the month of death and the twelve following months in the case of an active employee who dies with ten (10) or more years of seniority and with dependent coverage in effect at the time of death.
Extent of Company Obligation
12. The failure of any carrier to provide for benefits under the Program shall not result in any liability to the Company, nor shall such failure be considered a breach by the Company of any of the obligations which it has undertaken by this or any other agreement with the Union. In the event of any such failure, the Company and the Union shall immediately take action to provide substitute coverage in accordance with the provisions of this Agreement. Differences between claimants and the insurance carrier or their agents shall not be subject to the grievance procedure provided in the Basic Agreement. In the event of a disputed claim the Company will assist in communicating with the insurance carrier to assure compliance with the Master Insurance Contract.
Insurance Reports
13. The Union shall be furnished, upon request, an annual report regarding the Program. From time to time during the term of this Agreement, the Union shall be furnished such additional information as shall be reasonably required for the purpose of enabling it to be properly informed concerning the operation of the Program. Any accounting under the Program shall make no distinction between the experience with respect to Employees and other employees who may be covered, except that experience of employees who participate in the Program on a different basis or are entitled to different benefits from those provided for employees represented by the Union shall be included in such accounting only to the extent that the Company and the Union agree to such inclusion. The Company will continue the present arrangements under which it undertakes the keeping of insurance records of individual employees, the completion of individual employees' certificates, the recording of changes in insurance classifications and a major portion of the investigation and payment of claim. The cost to the Company of performing such work will not, for any accounting under the Program, be deemed to be a cost of the Program.
Job Security Agreement
- South Beloit manufacturing operations will remain open for the life of the collective bargaining agreement (through January 31, 2009), subject to paragraph 3 of the Job Security Agreement.
- In the event that any bargaining unit employee of the active payroll as of the date of ratification of this collective bargaining agreement is laid off without expectation of recall during the term of the collective bargaining agreement, he/she will have the right to elect severance pay at two times the rate provided in the collective bargaining agreement. Election of severance pay will terminate the employee's seniority rights.
- This agreement will become null and void in the event the plant is closed due to an Act of God, or in the event the plant fails to perform at least a 5% EBITDA level for two (2) consecutive quarters.
TERM OF AGREEMENT
The Insurance Agreement dated May 17, 2006 shall remain in effect through February 1, 2009. This Agreement shall become effective as of May 17, 2006 and shall remain in effect until February 1, 2009 in accordance with the Basic Agreement.
.
.
.
EXHIBIT 10.9
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
TABLE OF CONTENTS
ARTICLE 1 - AGREEMENT P. 6 1.1 Dates and Names 1.2 Preamble ARTICLE 2 - RECOGNITION P. 6 2.1 Explained ARTICLE 3 - MANAGEMENT PREROGATIVES P. 6 3.1 Explained ARTICLE 4 - NO STRIKE-NO LOCKOUT P. 6 - P. 7 4.1 Explained 4.2 Arbitrator power ARTICLE 5 - UNION SHOP P. 7 5.1 Explained 5.2 Indemnification ARTICLE 6 - CHECK-OFF P. 7 - P. 9 6.1 Authorization 6.2 Initial Deduction 6.3 Wage Period 6.4 Remittance 6.5 Authorization Cards 6.6 Collecting More Than One Month 6.7 Liability 6.8 Check-Off Wording 6.9 Retiree Check-off Opportunity ARTICLE 7 - SENIORITY P. 9 - P. 15 7.1 Job Classifications 7.2 "Cell" Defined 7.3 "Cell Operator -Primary" Defined 7.4 "Cell Operator - Secondary" Defined 7.5 "Cell Operator-Support" Defined 7.6 Seniority of Cell Operators 7.7 Filling of Posted Cell Vacancies 7.8 Rates for Cell Operators 7.9 Overtime Equalization of Cell Operators 7.10 Work Force Reduction & Layoff 7.11 Readjustment of the Work Force 7.12 Reassignment to a Previous Classification 7.13 Prohibition on Bumping into Higher Base Rate Job 7.14 Relinquishing Seniority in Prior Classification When Recalled 7.15 Only Low Seniority Employees Should Be Laid Off 7.16 Recall in Reverse Order of Layoff 7.17 Temporary Assignments 7.18 Rates Paid For Temporary Assignments 7.19 Necessity For Temporary Shift Changes 7.20 Shift Preference Rules 7.21 Cross Training; Seniority List 7.22 Probationary Employees 7.23 Temporary or Vacation Replacements 7.24 When Employee Becomes "Seniority Employee" 7.25 Trainees for Excluded Positions 7.26 Temporary Excluded Positions (Temporary Supervisors) 7.27 Transfers or Promotions to an Excluded Status 7.28 Excluded Personnel Doing Bargaining Unit Work 7.29 Seniority Date 7.30 Loss of Seniority Provisions 7.31 Temporary Layoffs Not to Exceed Four Working Days |
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
ARTICLE 8 - HOURS AND PREMIUM PAY P. 15 - P. 17 8.1 Forty Hour Week and Allowable Exceptions 8.2 Overtime Pay Rules 8.3 Voluntary Overtime 8.4 Weekend Work and Absenteeism 8.5 Overtime Equalization Statement 8.6 Notice to Cancel Already Scheduled Overtime 8.7 Notice to Employees for Saturday or Sunday Overtime 8.8 Union Representation on Overtime 8.9 Overtime Equalization Rules 8.10 Reporting and Call-In Pay ARTICLE 9 - BIDDING P. 17 - P. 18 9.1 General Bidding and Posting Requirements 9.2 Hiring From Outside 9.3 Prohibition on Bidding After Giving Up a Bid 9.4 Probation Period After Bid 9.5 Medical Restricted Employee Returning to Classification After Temporary Assignment 9.6 Posting for Qualified Persons 9.7 Training Schedule 9.8 Effective Dates of Wage Rate Changes ARTICLE 10 - REPRESENTATION P. 18 - P. 19 10.1 Bargaining Committee 10.2 No Individual Bargaining 10.3 Shift Stewards 10.4 Chief Committeeman 10.5 Compensation During Working Hours 10.6 Union Representatives and Seniority List 10.7 Listing of Union Officers 10.8 Leaving to Go To Local 155 Office 10.9 Furnishing of Contracts 10.10 Union Officers Entrance Into Premises 10.11 Union Leave of Absence ARTICLE 11 - GRIEVANCE PROCEDURE P. 19 - P. 22 11.1 Definition of "Grievance" 11.2 Writing a Signed Grievance 11.3 Discussion With Supervisor Required 11.4 First Level 11.5 Second Level 11.6 Third Level 11.7 Fourth Level (Arbitration) 11.8 Time Limits and Extension of Time Limits 11.9 Disciplinary Action 11.10 Arbitration Rules 11.11 Time Limit for Retroactivity 11.12 Notice of Discharges and Disciplinary Layoffs 11.13 Grievance Meetings 11.14 Employees in Grievance Meetings. ARTICLE 12 - SUBCONTRACTING P. 22 12.1 Explained ARTICLE 13 - NEW CLASSIFICATIONS P. 22 - P. 23 13.1 New Jobs 13.2 New Classification and Rate 13.3 Grievance and Arbitrators Power |
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
ARTICLE 14 - GENERAL P. 23 - P. 24 14.1 Tools of the Trade 14.2 Inventory 14.3 Rates of Pay and Benefits Are Fixed 14.4 No Further Bargaining Required 14.5 When Employees Are Paid 14.6 Short Term Loan When On S&A 14.7 Employee Responsibility to Maintain Address and Phone Number 14.8 Option to Be Paid By Automatic Deposit 14.9 Responsibility to Share Knowledge 14.10 Improving Productivity and Related Goals 14.11 Recording of Employment Status 14.12 Change of Address; Company Reliance on Last Address 14.13 Unclaimed Wages 14.14 Union Bulletin Board 14.15 Work Rule Changes ARTICLE 15 - EQUAL EMPLOYMENT OPPORTUNITY P. 24 - P. 27 15.1 Explained ARTICLE 16 - VACATION 16.1 Qualifying Vacation Year 16.2 Seniority Definition for Vacation Year 16.3 Formula for Computing Lump Sum Vacation Pay 16.4 Paying Vacation Pay to a Retiree 16.5 Quarterly Payout Option 16.6 Formula for Determining Unpaid Vacation Time Off 16.7 Maximum Vacation Time Off Provided Full Entitlement is Earned 16.8 Extra Five Day Unpaid Vacation Block 16.9 Scheduling Vacation Time Off and Advance Preference 16.10 Timetable for Announcing Vacation Shutdown 16.11 Timetable for Submitting Vacation Time-Off Requests ARTICLE 17 - HOLIDAYS P. 27 - P. 32 17.1 Holiday Schedule 17.2 Holiday Pay 17.3 Holiday Eligibility Regulations Which Apply Only to Holidays Other Than Christmas Period 17.4 Holiday Eligibility Regulations Which Apply Only to the Christmas Holiday Period 17.5 Christmas Holiday Period - Miscellaneous 17.6 Holiday Eligibility Regulations Which Apply to Both the Christmas Holiday Period and Other Holidays 17.7 Special Christmas Holiday Procedures - Days of Work Scheduled by December 10th. ARTICLE 18 - BEREAVEMENT PAY P. 32 18.1 Explanation of Coverage 18.2 Death Occurring During Vacation 18.3 Straight Time Rate Used 18.4 Stillborn Birth 18.5 Delaying Excused Absence Dates 18.6 Death While Employee on Leave ARTICLE 19 - PAY FOR JURY DUTY P. 32 - P. 33 19.1 Explanation of Coverage 19.2 Subpoenaed Witness Rules 19.3 Rules for Shift Workers ARTICLE 20 - SHORT-TERM MILITARY DUTY PAY & RE-EMPLOYMENT P. 33 20.1 Explanation of Coverage 20.2 Notice to Company and Statement of Military Pay 20.3 Re-Employment Rights ARTICLE 21 - PERSONAL LEAVE OF ABSENCE P. 33 - P. 34 21.1 Explanation |
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
ARTICLE 22 - MEDICAL LEAVE OF ABSENCE P. 34 22.1 Explanation 22.2 Substantiation Required 22.3 Disability Plan ARTICLE 23 - ON THE JOB INJURY P. 34 23.1 Transportation on Day of Injury 23.2 Doctor Determination on Day of Injury 23.3 Compensation During Working Time 23.4 Re-visits 23.5 Discussion of Workers Compensation Claims and Union Representative 23.6 Lost Time When Scheduled on Holiday or Weekend ARTICLE 24 - SAFETY AND HEALTH P. 34 - P. 35 24.1 Requirement to Meet Laws 24.2 Safety Committee Members 24.3 Pay While Meeting on Safety Committee 24.4 OSHA Log 24.5 Reporting an Unsafe Condition 24.6 Grievance Procedure 24.7 Protective Equipment 24.8 Hazardous Communication Program 24.9 Protective Gloves ARTICLE 25 - INSURANCE P. 36 - P. 39 25.1 Medical Insurance Options and Rates 25.2 Schedule of Benefits 25.3 Opt Out Bonus 25.4 Dental Insurance Options and Rates 25.5 Retiree Health Insurance and VEBA, and Retiree Dental Insurance 25.6 Disability - S&A and LTD Plans 25.7 Continuation of Insurance Benefits While Laid Off or On Disability 25.8 Life Insurance and AD&D Schedule of Benefits 25.9 Optional Dependent Life Insurance 25.10 Employee Eligibility for Insurances 25.11 Dependent Eligibility for Insurances 25.12 Status Changes - Requirement to Notify Company 25.13 Beneficiary - Requirement to Keep Up To Date 25.14 Summary Plan Descriptions 25.15 Flexible Spending Accounts ARTICLE 26 - 401(K) PLAN P. 39 - P. 40 26.1 Continuation for Life of Agreement 26.2 Special 401(k) Contribution for Pension Participants 26.3 Ongoing Participation in 401(k) Plan for Pensioners 26.4 New Hire Eligibility and Contributions ARTICLE 27 - PENSION P. 40 27.1 Continuation With Modifications 27.2 Basic Benefit and When Frozen 27.3 Early Retirement Supplement 27.4 Interim Supplement 27.5 Medicare Benefit 27.8 Survivor Pension Benefit Option 27.9 Temporary Benefit Supplement - Eliminated ARTICLE 28 - WAGES P. 40 - P. 41 28.1 Explained Each Year of Contract 28.2 COLA - Eliminated 28.3 Rate Schedule Effective Date and Classifications ARTICLE 29 - TRANSFER OF AGREEMENT P. 41 29.1 Explanation |
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
ARTICLE 30 - SEPARABILITY CLAUSE P. 41 30.1 Explanation ARTICLE 31 - TERMINATION P. 41 - P. 42 31.1 Dates 31.2 Sixty Day Notice Requirement 31.3 Agreement Replaces Previous Agreements 31.4 Signature Page LETTER NO. 1 P. 43 Equal Opportunity Program LETTER NO. 2 P. 44 Working Hours LETTER NO. 3 P. 45 Combination or Elimination of Classifications LETTER NO. 4 P. 46 Holiday Pay and Disciplinary Suspension LETTER NO. 5 P. 47 Notice of Plant Closing and Severance Pay ADDENDUM NO. 1 P. 48 Traditional Health Insurance Weekly Co-Pay Projection ADDENDUM NO. 2 P. 49 HMO Health Insurance Weekly Co-Pay Projection CALENDARS P. 50 - P. 53 2005 2006 2007 2008 |
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
ARTICLE 1 - AGREEMENT
1.1 This Agreement is entered into on this June 6, 2005 between Formsprag LLC, hereinafter referred to as the "Company" and the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, UAW Local No. 155, hereinafter referred to as the "Union." This is a three and one half year Agreement starting December 6, 2004.
1.2 The parties to this Agreement, in consideration of their mutual promises and agreements, herein set forth in consideration of their desire to stabilize employment, eliminate strikes, boycotts, lockouts, and a discontinuance of work, and of their desire of securing closer cooperation between the Company, the Union, and the Employees represented by it, promise and agree that:
ARTICLE 2 - RECOGNITION
2.1 The Union is recognized as the sole and exclusive representative for the purpose of collective bargaining for all production, and maintenance, employees employed at the Company's 23601 Hoover Road, Warren, Michigan plant, including janitors and truck drivers, but excluding engineers, office clerical employees, professional employees, guards and supervisors as defined in the National Labor Relations Act, as amended. Former practices and oral and written understandings which may have been in effect prior to this Agreement shall not constitute part of this Agreement.
ARTICLE 3 - MANAGEMENT PREROGATIVES
3.1 The parties recognize that the management of the Company has the responsibility for conducting the affairs of the Company in the interests of its owners, its employees and its customers. The parties agree that in order to carry out this responsibility, management retains the sole right, subject only to the express provisions of this Agreement, to manage the business and to direct the working forces of the Company. The Company's right to manage its business includes, but is not limited to: the right to hire, promote, demote, transfer, assign and direct associates; to discipline, suspend, and discharge for just cause; to layoff employees due to lack of work or other legitimate reasons; to make and enforce reasonable plant rules of conduct and regulations not inconsistent with the provisions of this Agreement, to enforce company rules equally and fairly; to increase or decrease the working force; to determine the number of products to be manufactured and the methods, processes and materials to be used; to determine the need for and layout of machinery and equipment; to determine quality and establish reasonable work standards; to determine the number of hours per day or week operations shall be carried out; to establish and change work schedules and assignments; to subcontract, discontinue or relocate all or any portion of the operations now or hereafter carried on at the present facility; to schedule hours of work, including overtime, to determine job content and to maintain safety, efficiency and order in the plant.
ARTICLE 4 - NO STRIKE-NO LOCKOUT
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
4.1 The Company agrees that so long as this Agreement is in effect there shall be no lockout. The Union, its officers, agents, members, and employees covered by this Agreement agree that so long as the Agreement is in effect, there shall be no strikes, partial or complete, sit-downs, slowdowns, stoppages or cessation of work, including actions of a sympathy nature, boycotts, or any unlawful acts of any kind that interfere with the Company's operation or the production or sale of its products. The Company shall have the right to discipline (including discharge) any employee who instigates, participates in, or gives leadership to an unauthorized strike in violation of this Agreement.
4.2 The Arbitrator shall have power to review the reasonableness of penalties imposed under this Section.
ARTICLE 5 - UNION SHOP
5.1 Each employee covered by this Agreement shall be or become a member of the
Union as a condition of employment not later than the 30th consecutive calendar
day following the effective date of this Agreement, or not later than the 30th
consecutive calendar day following the beginning of his employment, whichever is
later. Each such employee, as a condition of continued employment, shall remain
a member of the Union in good standing to the extent provided in the Union's
International Constitution and as authorized by the Labor Management Relations
Act of 1947, or as that Act has been or is amended. The Union shall notify the
Company in writing of any employee who fails to become or remain a member of the
Union as required above. If after receipt of such notice by the Company the
employee does not become a member or remain a member of the Union within five
(5) days (whichever is applicable) he shall be terminated.
5.2 The Union shall indemnify and save the Company harmless against any and all claims, demands, suits or other forms of liability that shall arise out of or by reason of action taken in reliance upon the information furnished to the Company by the Union for the purpose of complying with Section 5.1, above.
ARTICLE 6 - CHECK-OFF
6.1 Upon receipt of the authorization of check-off of dues, the Company will deduct from wages earned including jury duty pay, bereavement pay, and paid absence allowance, and turn over to the proper Union official, initiation fees, reinstatement fees and/or current monthly dues of such members of the Union or Agency Shop fees of such employees as individually and voluntarily certify in writing that they authorize such deduction for the term of the contract.
6.2 The initial deduction from the pay of an employee signing a new authorization shall be from the second pay period following the date of his authorization.
6.3 The deduction of Union dues shall be made from wages earned during the first full pay period that an employee works in a calendar month and in a manner agreed upon with the International Union. The Financial Secretary-Treasurer, or other duly authorized Union official of each local unit will notify the Company in writing on Union stationery, of the amount of dues each month by each employee who has authorized a deduction and this amount will remain in effect until changed by a similar written authority. In case of an error, proper adjustment will be made by the Union with the employee.
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
6.4 All dues deducted will be remitted to the Financial Secretary-Treasurer or other such duly authorized Union official of each local unit not later than the twenty-fifth day of the calendar month in which such deductions are made or as may be otherwise agreed. The Company will furnish the aforesaid Union official of the local union monthly a record of the employees from whose wages deductions have been made together with the amounts of such deductions.
6.5 The Company will also furnish the Union a record of those employees who have signed authorization cards but who have been removed from the unit payroll since the last check-off date and for whom no dues have been collected.
6.6 In the event the Union wants the Company to collect more than one month's regular dues from an employee it will furnish the Company with written notification listing each employee and the amount to be collected.
6.7 The Company shall not be liable to the International Union or its locals by reason of the requirements of this article for the remittance or payment of any sum other than that constituting actual deductions made from employee wages.
6.8 The following wording will be used on the check-off authorization.
AUTHORIZATION FOR CHECK-OFF OF DUES
Date __________________________
I hereby assign Local Union No. _______, International Union, United Automobile, Aerospace, and Agricultural Implement Workers of America (UAW), from any wages earned or to be earned by me as your employee while engaged in employment within the Bargaining Unit, such sums as the Financial Officer of said Local Unit No. 155 may certify as due and owing from me as initiation fees, reinstatement fees and membership dues as may be established from time to time by said local union in accordance with the Constitution of the International Union, UAW. I authorize and direct you to deduct such amounts from my pay and to remit same to the Union at such times and in such manner as may be agreed upon between you and the Union at any time while this authorization is in effect.
This assignment, authorization and direction shall be irrevocable for the period of one (1) year from the date of delivery hereof to you or until the termination of the collective agreement between the Company and the Union which is in force at the time of delivery of this authorization, whichever occurs sooner; and I agree and direct that this assignment, authorization and direction shall be automatically renewed and shall be irrevocable for successive periods of one (1) year each or for the period of each succeeding applicable collective agreement between the Company and the Union, whichever shall be shorter, unless written notice is given by me to the Company and the Union not more than twenty (20) days and not less than ten (10) days prior to the expiration of each period of one (1) year, or of each applicable collective agreement between the Company and the Union whichever occurs sooner.
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
This authorization is made pursuant to the provisions of Section 302(c) of the Labor Management Relations Act of 1947 and otherwise.
6.9 It is agreed that an employee who retires will be provided the opportunity to complete a retiree's dues check-off authorization.
ARTICLE 7 - SENIORITY
7.1 Seniority shall be by Classification Seniority within Occupational Groups. The Occupational groups shall be as follows:
GROUP I 101 Cell Operator - Primary (*) 102 Tool Room Machine Operator 103 Turning/Mill/Drill 104 Grind 105 Heat Treat Operator and Maintenance 106 Maintenance 107 Inspection 108 Auto Cutoff & Notch 109 Sprag Grind GROUP II 201 Cell Operator - Secondary (*) 202 Aircraft Clutch Rebuild 203 Grotnes & Punch Press 204 Magnaflux 205 Tumble/Deburr/Bench 206 Assembly/Rebuild GROUP III 301 Cell Operator - Support 302 Ship/Receive/Stock Handle /Truck Driver 303 Tool Crib/Stock Room 304 Clutch Test/Parts Clean 305 Janitor |
7.2 A CELL is defined as technology consisting of one or more operations during the manufacturing process of the same component in an equipment layout sequentially linking one or more like or unlike machines or operations.
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
7.3 CELL OPERATOR-PRIMARY - A Primary Cell Operator shall be qualified to perform a Group 1 classification operation in a cell and any other operation in such cell as assigned.
7.4 CELL OPERATOR-SECONDARY - A Secondary Cell Operator shall be qualified to perform a Group 2 classification operation in a cell and any other equivalent or support operations in such cell as assigned.
7.5 CELL OPERATOR-SUPPORT - A Support Cell Operator shall be qualified to perform Group 3 operations in a cell as assigned.
7.6 SENIORITY OF CELL OPERATORS - ( A) Seniority begins in a Cell Operator classification as of the date the operator enters the cell (Job Bid) (B) Seniority continues concurrently in the last classification.
7.7 FILLING OF POSTED CELL VACANCIES - "Qualified" Cell Operator posting shall be by plant seniority of all those who have qualified at Formsprag in at least one of the classification jobs included in the cell (and who have not waived recall rights to such classification), ranking first all of those individuals with previous qualification in a job from the top job group in the cell, and next ranking the individuals from the next lower job group in the cell (if any), and finally ranking those in the next and lowest job group in the cell (if any). "Trainee" Cell Operator posting shall be by plant seniority following the normal procedures in Local Article 8.
7.8 RATES FOR CELL OPERATORS - Rates for Cell Operators shall be equal to the highest rated job assigned to such operator in the cell.
7.9 OVERTIME EOUALIZATION OF CELL OPERATORS - Cell Operators will be equalized within their own specific cell.
7.10 WORK FORCE REDUCTION/LAYOFF - When there is a reduction of the working force or a readjustment of the work force, the following procedure shall be observed in the following order:
1. Notification to the Union, in writing twenty-four (24) hours in advance.
2. Probationary employees in the affected classification shall be laid off first.
3. If additional layoffs are necessary in the classification, the employee with the least classification seniority shall return to his last previous classification provided he has previously attained seniority in such classification and provided there is an employee with less classification seniority in the previous classification. For purposes of this paragraph only, where an employee has in excess of two (2) years seniority in his previous classification, that seniority will be adjusted to equal his plant seniority and, as a result, he will bump the junior employee in point of hire date in that previous classification.
4. When an employee has no previous classification and is laid off from his present classification, he may take a voluntary layoff or shall be permitted to "bump" the junior employee in point of hiring date in his present Group, except that if the lowest employee is in a higher base rate classification he will bump the next lowest employee (if any) in his
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
present Group, and then the next lowest rated Groups provided he is capable of performing the remaining available work in such classification.
5. Following the above steps, the youngest employee in point of date of hire in the remaining Group will be laid off and considered an inactive employee. Employees will be expected to complete their day's work in a normal manner after receiving layoff notice.
7.11 When a readjustment of the work force is necessary for a period in excess of one (1) week and a layoff does not result, reductions in a classification will be by classification seniority, and the same procedure as provided above will be followed except that instead of layoff, the employee remaining without an assignment will be placed on the available work.
7.12 An employee who is reassigned to a previous classification shall receive the corresponding or appropriate number-of-months rate on Schedule 2005.
7.13 No Employee shall be permitted to exercise their seniority to bump into a higher base rate job.
7.14 A seniority employee who has gone into other classifications due to a readjustment of the work force and/ or layoff will return to his/her previous classifications when recalled. However, as an exception to the above an employee working out of a classification for a period in excess of six months, may, if recalled, remain in his current job and relinquish classification seniority in his previous classification. Additionally, an employee laid off to a lower classification who subsequently bids up to a classification between the original classification and the one from which he was laid off, may relinquish classification seniority at any time when recalled.
7.15 Only the lowest seniority employee, or employees, in a classification should be laid off.
7.16 Seniority Employees shall be recalled in reverse order of the layoff provisions before any new employees are hired.
7.17 TEMPORARY ASSIGNMENT - Employees may be transferred from one classification to another provided they are capable of doing the job and do not infringe on the seniority rights of the employees regularly employed in the classification to which such transfer is made. Employees on layoff in the affected classification need not be recalled unless there is a reasonable likelihood of one (1) week's work. Abuses of this provision shall be subject to the Grievance Procedure. The Company will notify the Union of all temporary assignments as soon as possible. If employees do not volunteer for temporary assignment, the employee in the affected classification with the least seniority, who is qualified to do the work required, shall be temporarily assigned. For all temporary assignments scheduled, a Union representative will be notified of the temporary assignment prior to the change in assignment, except in emergencies when the Union will be notified as soon as possible. If a job is vacant due to sick leave, the Company will post the job after 45 days, unless the Company and Union agree otherwise.
7.18 Employees working in a lower classification, except by reason of seniority displacement, shall continue to receive their own rate. Employees working in a higher rate classification for thirty (30) minutes or more shall continue to receive their regular rate for all time worked during the
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
temporary assignment, or the corresponding numbers-of-months rate on Schedule 2005, whichever is greater. As an exception to the above, employees reduced from a classification and then subsequently reassigned to work in such classification for one (1) hour or more, shall receive the corresponding or appropriate number-of-months rate on Schedule 2005.
7.19 It may be necessary, from time to time, for day people to work nights, or vice versa, in order to maintain an efficient balance of shifts, or temporarily to schedule additional shift operations in certain classifications. If employees do not volunteer to change shifts, the employee in the affected classification with the least seniority, who is qualified to do the work required, shall be temporarily required to change shifts or forfeit his/her seniority.
7.20 SHIFT PREFERENCE - When a vacancy occurs on any shift by reasons of any available opening, except for a position to be filled by a trainee, the employee with the most classification seniority on another shift shall be given preference for transfer to other shifts within his classification.
1. Employees shall be eligible for transfer under this procedure after having completed their probationary period.
2. Employees will be permitted to bump another employee working on another shift in the same classification provided he- has more classification seniority. Individuals may exercise seniority for shift preference at any time with two weeks written notice. Providing that they have not exercised a shift bump in the prior six months, and providing that no shift bumps are allowed during the month of December. All shift bumps will take place on Monday unless the Company agrees otherwise.
3. The above shift bump will not apply to trainees with less than six (6) months in such classification
7.21 MISCELLANEOUS -
1. The Company and Union agree that cross training is desirable, as time permits.
2. The Company shall keep a true seniority list and a rate list of all employees having seniority rights, which shall be open to the inspection of the Bargaining Committee at all reasonable times. A copy of the seniority list shall be given to the Chief Bargaining Committeeman once every six (6) months for posting.
4. The Company agrees to submit to Local 155 on July 1st and January 1st of each year the following data: The name of each employee covered by this Agreement, his occupation and current hourly rate (including cost-of-living but excluding night shift premium) and the payroll period from which the data is taken. Rates of individuals that have been adjusted by other than a general or automatic increase during the previous six (6) months will be identified by an asterisk. .
7.22 PROBATIONARY EMPLOYEES - A new employee will be considered probationary for a period of sixty (60) calendar days from date of last hire.- There will be no responsibility for the
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
rehiring or recalling of a probationary employee who is discharged or laid off during his probationary period. If requested, the Company will discuss the discharge or layoff with the Union.
7.23 A new employee hired as a temporary or vacation replacement will be considered as a probationary employee for the first one hundred twenty (120) days of his employment.
7.24 Immediately following his probationary period, an employee will become a seniority employee and will be entered on the seniority list of the Bargaining Unit and will rank for seniority from the date and hour of his last hire. A probationary employee will not have seniority.
7.25 TRAINEES FOR EXCLUDED POSITIONS - The Company will have the right to exempt from all seniority and wage requirements an employee enrolled for the purpose of training and experience with the expectation that such trainee ultimately will be assigned to permanent employment other than that covered by this Agreement. The total of such trainees may not exceed two (2) in number at any one time, nor may any trainee displace an employee covered by this Agreement. The Bargaining Committee shall be notified before the training begins as to the names of the trainees and when they will begin training.
7.26 TEMPORARY EXCLUDED EMPLOYEES - The Company may select a temporary
supervisor without regard to seniority for a period not to exceed forty-five
(45) calendar days within a calendar year and will notify the Union in writing
of the effective date of such temporary assignment. An extension of such period
may be granted by mutual agreement. Where necessary, the parties may agree to
more than one forty-five (45) calendar-day period in a calendar year. Such
employee will not be excluded from the Bargaining Unit, and at the termination
of temporary duty he will be reinstated to the job he had prior to the temporary
assignment. Stewards, Committeemen, and members of the Executive Board shall be
prohibited from accepting a position of temporary supervisor.
7.27 EXCLUDED EMPLOYEES
1. For an employee promoted to an excluded status, a three (3) month period will be established beginning with the effective date of his promotion. Should he return to the Bargaining Unit on or before the end of the three (3) month period he will do so with accumulated seniority. An excluded employee who does not return to the Bargaining Unit on or before the end of the three (3) month period will forfeit all Bargaining Unit seniority and will have no right to return to the Bargaining Unit except as a new hire.
2. An employee who has previously been promoted to an excluded status and returned to the Bargaining Unit with accumulated seniority, will forfeit all seniority with any subsequent promotion to an excluded status and will have no right to return to the Bargaining Unit except as a new hire.
2. An employee with Bargaining Unit seniority who transfers to an excluded status in a facility other than the facility in which he holds seniority will forfeit all such seniority effective with his transfer.
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
7.28 EXCLUDED PERSONNEL WORKING - Production and maintenance work shall not be performed by supervisors or by any other persons excluded from the bargaining unit, except for the purpose of performing work involving the following situations:
1. The instruction or training of employees.
2. The performance of necessary work when production difficulties are encountered on a job, but such work will not displace a member of the bargaining unit. Further, when such work is done, a member of the bargaining unit will stand by for instructional purposes.
3. The performance of research work or work of an experimental nature, or work involving special mechanical training.
4. The development of new processes.
7.29 SENIORITY DATE - Seniority records on file with the Company on the effective date of the signing of this Agreement will establish the seniority date of each employee. Seniority lists and recall lists shall be available at all times and be kept up to date.
7.30 LOSS OF SENIORITY - An employee will lose his seniority:
1. If he quits.
2. If he is discharged for just cause and the discharge is not reversed through the Grievance Procedure.
3. If he has been laid off and has less than ten (10) years seniority at the time of layoff, he will lose seniority when the layoff period is equal to the seniority he had at time of layoff. For those with at least ten (10) years of service, seniority will expire after ten (10) years.
4. If he has been unable to work due to a medical leave of absence and has less than ten (10) years seniority at the time the leave begins, he will lose seniority when the leave of absence period is equal to the seniority he had at the time the leave began. For those with at least ten (10) years of service, seniority will expire after ten (10) years.
5. If he has been on a workers compensation leave of absence and has less than ten (10) years seniority at the time the leave begins, he will lose seniority when the leave of absence period is equal to the seniority he had at the time the leave began. For those with at least ten (10) years of service, seniority will expire after ten (10) years.
6. Failure to call in for three (3) consecutive work days will be considered as having voluntarily quit, unless such failure to call in is for good and sufficient reasons.
7. If he fails to have his leave of absence renewed by an extension in writing before three (3) calendar days have elapsed after his leave has expired, unless such failure to secure extension of leave was for good and sufficient reason.
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
8. If he has been laid off and is recalled to work but fails to report for work within five (5) working days from the date of signing the certified or registered letter receipt or telegram receipt, unless the Company agrees to extend this period or he will lose his seniority if the registered letter or telegram is returned as undeliverable from the last known Company address.
9. If he accepts employment elsewhere during a leave of absence unless otherwise agreed to between the Company and the Union.
10. On the effective date of his retirement. If an employee retired for reasons stated herein, and lost seniority in accordance with this section, and is rehired, such employee will have the status of a new employee and without seniority, and he shall not acquire or accumulate any seniority thereafter, except for the purpose of applying the provisions governing Holiday Pay and Vacation Pay.
7.31 TEMPORARY LAYOFFS - A temporary layoff due to breakdown, shortage of material or other emergency conditions may be made for a period not to exceed four (4) regular working days, without regard to seniority or shift. During such temporary layoff, an employee may not exercise seniority transfer privileges.
ARTICLE 8 - HOURS AND PREMIUM PAY
8.1 SCHEDULE
1. It is recognized that to operate the plant below a forty-hour week is not desirable and therefore the Company and Union agree that if the Company's work dictates that it is necessary to schedule the work week for any plant, department or classification below forty hours, the Company may do so for not over six weeks in any calendar year (holiday weeks excluded) unless agreement is reached with the Union for an extension of this time.
2. For the purpose of defining the weekly payroll period an employee's work week will begin on calendar Monday at the regular starting time of the shift to which the employee is assigned, except for those employees whose regular work week begins on calendar Sunday night, in which case their regular work week will begin at their regular starting time on calendar Sunday night. To improve payroll processing and accounting processes, the Company will change the pay period from "Monday through Sunday" to "Saturday through Friday. Advance discussion with the Union on the implementation date will occur.
8.2 OVERTIME
1. Straight time is paid for:
a. The first eight (8) hours of work performed on Monday through Friday.
2. Time and one-half is paid for:
a. The first three (3) hours of work performed over eight (8) hours Monday through Friday.
b. Work performed for the first eight (8) hours on Saturday.
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
3. Double time is paid for:
a. Work performed over eleven (11) hours Monday through Friday.
b. Work performed over eight (8) hours on Saturday.
c. Work performed on Sunday.
d. Work performed on any of the paid holidays.
8.3 Although overtime work is not compulsory, the Union will not restrict overtime in any manner, and employees will cooperate when requested by the Management to perform overtime work. Individual refusal to work overtime (but not concerted refusal) will not be subject to disciplinary action.
8.4 An employee who accepts an overtime assignment on a Saturday or Sunday, and who fails to report for the assigned overtime, will be considered an absentee under the plant rules or absentee control procedure -. Overtime and premium rates of pay will not be pyramided.
8.5 Every effort will be made to arrange job assignments so that overtime may be equalized within sixteen (16) hours among employees in a classification, on the shift to which overtime becomes available. Individuals on nonstandard shift hours will be equalized together with their classification on the standard shift which contains the majority of their regular working hours. A uniform record system shall be maintained. The Company will make every effort to equalize between shifts. The employee with the lowest number of overtime hours in a classification on the shift involved shall be asked first to work overtime, provided the employee is able to perform the work assigned. A uniform record system shall be maintained. The Company will make every effort to equalize between shifts.
8.6 When possible, the Company will provide twenty-four (24) hour notification to cancel already scheduled overtime.
8.7 The Union will be notified on Thursday for Saturday scheduled overtime and on Friday for Sunday scheduled overtime. For all overtime scheduled, a Union representative will be notified of the overtime prior to employee solicitation, except in emergencies when the Union will be notified as soon as possible.
8.8 The Company will provide for at least one (1) Union representative on assignments for overtime hours on all shifts. When a Committeeman's regular job is needed on such overtime, he will be called in as the Union representative. If his regular job is not scheduled to work, he will be permitted to work on another job scheduled provided he is capable of performing such work as determined by the Plant Superintendent. In lieu of this procedure, the Union may appoint an alternate representative for the overtime in question.
8.9 Effective with the signing of the Labor Agreement, the following uniform record system will be utilized in all departments:
1. The Company shall maintain an overtime chart, by classification, on each shift covering overtime worked in or out of an employee's classification. The chart shall be open for
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
inspection to the Bargaining Committee, and shall be reviewed quarterly between the Bargaining Committee and the Company
2. The Company will record overtime hours by calendar year.
6. Overtime offered to an employee and declined will be charged as overtime worked.
7. Overtime solicitation missed by an employee due to his absence from work will be charged as overtime worked.
8. Overtime missed by an employee where he has accepted the overtime shall be charged as overtime worked.
9. New seniority employees in a classification will begin to equalize overtime as of the date of permanent transfer to the new classification and shall take the amount then on record for the highest employee in the new classification.
10. Probationary employees will begin to equalize overtime in a classification upon completion of their probationary period, and shall take the amount then on record for the highest employee in the new classification.
8. Overtime for purposes herein shall mean all overtime made available beyond the hours the classification is scheduled.
8.10 REPORTING AND CALL-IN PAY - An employee called to work and not retained or an employee reporting for work on any scheduled day on his regularly scheduled shift without having previously notified not to report, and not retained, will receive his regular hourly rate for four (4) hours, and shall receive shift premium and premium pay on premium days. The Company may require the employee to work at a job other than his regular classification during this four (4) hour period. Alternatively, the employee may elect to leave after the call-in work is completed and the company will pay the greater of two (2) hours or actual time worked. Additionally, minimum emergency warehouse call-in pay for shipping or delivery employees is two (2) hours.
ARTICLE 9 - BIDDING
9.1 Bidding, and assignment to vacant or new jobs shall be based on seniority. Such a vacancy shall be posted for a period of three (3) working days during which time all active employees may indicate their desire to be considered by signing the posting provided they have been in their current classification for a period of six (6) months or more at the time of the posting. Seniority employees with less than six (6) months following their initial plant hire date will be eligible to bid for posted jobs, provided they are on the seniority list and provided they meet other contractual requirements.
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
9.2 This procedure shall not prohibit the Company from hiring from the outside after discussion with the Union when employees capable of performing the necessary jobs are not available.
9.3 If an employee accepts a bid and then elects to return to their former job
during probation in the new classification, they will be prohibited from bidding
on any other job for a period of six months from the date they gave up the bid.
9.4 A probation period of sixty (60) calendar days shall apply from the date the
job bid is awarded.
9.5 Any employee who is transferred to a classification because of his physical condition as evidenced by a medical certificate shall not be precluded from returning to his regular classification as soon as the Company doctor certifies he is able to return to that regular classification.
9.6 The Company reserves the option of posting for a qualified person in the following classifications: Cell Operators, Tool Room Machine Operator, Heat Treat Operator and Maintenance, and Maintenance. All other job bids will be awarded on Plant seniority.
9.7 TRAINING SCHEDULE - For all promotions, those employees not yet at maximum rate on Schedule 2005 will advance to the corresponding number-of-months rate for the new job and continue progressing on the chart from that point in the new classification. However, employees at maximum position or one increase away from maximum position on Schedule 2005 in their new classification on a bid up will receive their old rate for six months at which time they will be moved to maximum in their new classification.
9.8 Permanent changes in wage rates will be made effective only at the beginning of a pay period following the date as determined on Schedule 2005.
ARTICLE 10 - REPRESENTATION
10.1 Employees shall be represented by a Bargaining Committee of no more than
three (3) members. The Bargaining Committee shall be selected from a group of
nominees on the seniority list, excluding employees laid off in excess of one
(1) year, chosen pursuant to Local Union by-laws.
10.2 An agreement reached between the Management and the Bargaining Committee is binding on all workers affected and cannot be changed by an individual.
10.3 If there are employees on the night shift or shifts, they will be represented by an elected Night Steward who must be able to perform the work required. Such Night Steward shall be compensated for necessary time spent adjusting grievances in accordance with the first and second steps of the Grievance Procedure.
10.4 One (1) Committeeman to be designated "Chief Bargaining Committeeman" will be the last laid off when the work force is reduced, provided the Company has work available which he is capable of performing and he is available for such work. If the Chief bargaining Committeeman does not qualify under the above rule, the Union may designate another employee who has been assigned to such work to represent the employees for that period.
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
10.5 Members of the Bargaining Committee shall be compensated during regular working hours for necessary time spent adjusting grievances, contract negotiations, including meetings with the Company. AIl Committeemen will be permitted to leave their work after reporting to their respective supervisor. It is further agreed that such Committeemen shall give the Company an accurate accounting of time lost adjusting grievances in the same manner as the job records are kept.
10.6 The Chief Bargaining Committeeman shall head the seniority list for the plant and shall work upon the day shift, provided he is capable of doing the work available. The two (2) other members of the Bargaining Committee shall head the seniority list for their respective groups, provided they are capable of doing the work available. Committeemen shall be returned to their regular standing on seniority upon termination of service on the Committee. Special seniority privileges provided for committeemen, officers and stewards apply in all cases, except recall, overtime, upgrading, vacation, and job bidding. In the event of second or third shift operations, the shift Steward shall be the last laid off and the first recalled, provided he is capable of performing the available work.
10.7 LISTING OF UNION OFFICERS - Upon the signing of this Agreement and thereafter as changes occur the International Union will notify the Company of the names of the International Representatives it is to negotiate with and the Union will furnish the plant with a list of Union or Unit officers, their Executive Committee, their Bargaining Committee, and their stewards.
10.8 BARGAINING COMMITTEE ROOM - The Bargaining Committee will be permitted to leave the Company premises to go to Local 155 offices on Union business or to meetings and receive payment for such time at straight time rate when an official request from the Local Union President is received.
10.9 FURNISHING OF CONTRACTS - The Company will furnish each employee with a copy of this Agreement.
10.10 International and Local Union Representatives other than employees of the Company shall be permitted to enter the plant if advance notice has been given to the Human Resource Department and by registering under the regular plant admission procedure. Union Representatives who are employees of the Company shall be permitted access to the premises on a shift other than their own if notice is given to the Human Resource Department or if such department is not open, by registering under the regular plant admission procedure.
10.11 UNION LEAVE OF ABSENCE - An employee appointed or elected to a full or part-time position in the International Union, United Automobile, Aerospace, Agricultural Implement Workers of America, or a Local or Unit of a Local covered by this Agreement, or any other office in the UAW will apply for and be given a leave of absence without loss of seniority until the termination of such office.
ARTICLE 11 - GRIEVANCE PROCEDURE
11.1 As used in this Agreement, the term "grievance" shall mean any misunderstanding, difference, or dispute between the Company and the Union, or one or more of the employees
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
represented by the Union arising out of this Agreement, or any supplemental agreements thereto, or concerning or relating to the interpretation and application thereof and filed subsequent to the effective date of this Agreement.
11.2 This Grievance Procedure is divided into four levels. The Bargaining Committee may write and sign a grievance in behalf of an employee or group of employees. If the issue raised is not appropriate for resolution at the first or second level, the grievance may be referred by the Bargaining Committee directly to the 3rd level.
11.3 If, after the employee and his immediate supervisor have discussed the complaint, the matter is not resolved to the satisfaction of the employee, it may be considered a grievance and then the employee will be allowed to review his/her complaint with his/her Committeeperson without delay.
11.4 FIRST LEVEL - The grievance shall be discussed between the employee, the employee's immediate supervisor and a Union representative. If the grievance is not resolved, it shall be reduced to writing within two (2) working days, signed by the grievant, and submitted to the immediate supervisor for transmission to the Production Manager.
11.5 SECOND LEVEL - The Production Manager will, within two (2) working days of its receipt, unless otherwise agreed to, arrange a conference on the matter between himself, the immediate supervisor, the Chief Bargaining Committeeman and one other member of the Bargaining Committee for day shift grievances. A conference on night shift grievances will be arranged in the same manner between the Production Manager, the immediate supervisor, Chief Bargaining Committeeman, and the night shift Steward. The Production Manager will give a written answer to the grievance and return it to the Chief Bargaining Committeeman within twenty-four (24) hours after the conference unless otherwise agreed.
11.6 THIRD LEVEL - If a satisfactory adjustment is not reached at the 2nd level conference, the matter will, within five (5) working days after receipt of the written answer, be taken up at a meeting between the full bargaining committee and the management representative(s). The Union and the Company may have outside representatives present at this meeting.
11.7 FOURTH LEVEL- ARBITRATION - If a grievance remains unsettled after the Third Level answer by the designated representative of the Company, it may at any time within fourteen (14) days be referred to arbitration by the Union. .
11.8 If at any level of the Grievance Procedure the grievance is not referred to the next level, within the time limits set forth, it will be considered settled upon the terms of the last answer. By mutual consent, time limits at any level of the Grievance Procedure may be extended.
11.9 Any disciplinary action against an employee not previously removed from the employee's record shall become invalid after a one year period from the date the discipline was issued.
11.10 ARBITRATION RULES
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
1. The party seeking arbitration shall within the time limits specified above request a panel of Arbitrators from the American Arbitration Association. Such panel will include nine (9) Arbitrators who will all be members of the National Academy of Arbitrators and who have been active Arbitrators in the private sector for at least ten (10) consecutive years from the date the panel is requested. The Union and Company will each have one (1) preemptory challenge of a submitted panel.
2. The Union and Company will first attempt to mutually agree upon a selection from the panel. Should no agreement be reached, the Union and Company shall, in turn, strike an arbitrator's name until only one name remains. A single coin toss shall determine whether the Union or Company will make the first strike.
3. The non-prevailing party shall pay the cost of the Arbitrator's services and expenses. In the event of a split decision, the Arbitrator shall make as part of his/her decision, a ruling as to how the cost of his/her services shall be apportioned. All other expenses, including but not limited to wages of the participants, witness fees, attorney's fees or cost of exhibits will be borne by the party who incurred the expense.
4. It shall be the duty of the Arbitrator within thirty (30) days after the oral hearing is concluded to issue his/her decision in writing and to furnish a copy thereof to each of the parties. His/her decision shall be final and binding upon the parties.
5. The Union and the Company will make available for the Arbitrator's inspection and examination such records and data which he may deem necessary to inspect or examine in order to decide the issue. In deciding a case, it shall be the function of the Arbitrator to interpret the Agreement and all Supplemental Agreements thereto and to decide whether or not there has been a violation thereof. He shall have no right to change, add to, subtract from, or modify any of the terms of this Agreement or any Supplemental Agreements thereto or to establish or change any wage rates except for newly created classifications.
11.11 TIME LIMIT FOR RETROACTIVITY - The Company will not be required to pay any claims for monies which accrue more than ninety (90) days before the date of delivering the written grievance to the first supervisor provided in the Grievance Procedure. In all cases where back wages are awarded, deduction will be made of all outside wages and/or monetary benefits including Unemployment compensation.
11.12 NOTICE OF DISCHARGES AND DISCIPLINARY LAYOFFS - Written notice of all
discharges and disciplinary layoffs will be given to the Bargaining Committee
before such action is to become effective. However, written notice of violation
of the Attendance Program will be given to the Bargaining Committee twenty-four
(24) hours before such action is to become effective. In the absence of a
written grievance within seven (7) calendar days on any of these notices, the
action of the Company will be considered final.
11.13 GRIEVANCE MEETINGS - The Human Resource Manager and/or designated, authorized representatives of the Company will meet regularly with the Bargaining Committee of the Unit each week if one or more grievances or problems remain unsettled, and both parties shall make every
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
effort to effect just and speedy settlement of every complaint or grievance. When an emergency arises on a matter that cannot be handled at the regular weekly grievance meeting, the emergency shall be taken up at a special meeting agreed to by the Bargaining Committee and the Company. Meetings under this section shall be held during the regular working hours.
11.14 EMPLOYEES IN GRIEVANCE MEETINGS
1. The Committee, upon due notice to the management, may be accompanied to meetings with the management by the Department Committeeman or Steward, upon the request of the Local Union Committee. If the Company concurs in the attendance of such an employee it shall pay him, but if the Union requests his presence without Company concurrence the Union shall pay him.
2. It is understood that only interested parties will appear at the grievance meetings since any other arrangement would merely retard the ability to settle the grievance.
3. When the Union desires to have present a witness or witnesses other than the Department Committeeman or Steward, they shall notify the Human Resource Manager, in writing, in advance of the grievance meetings, of the names of the proposed witnesses. If the Human Resource Manager makes no objection to the proposed witnesses they may be present and be paid by the Company for the time spent at the meeting during their scheduled working hours. If the Human Resource Manager takes objection to the presence of any of the witnesses, he shall notify the Union of his objection, but upon such notice of objection, the Union may present the witnesses but such witnesses shall be paid for by the Union. Such employees will be paid the rate in accordance with the local plant custom.
ARTICLE 12 - SUBCONTRACTING
12.1 The Company will continue the present practices on sub contracting. In the event of a layoff the Company will meet with the Union and discuss outside contracting with the objective of returning to a full employment level. In the event an employee is assigned to work out of classification continuously for a period of two weeks, the Company and Union will meet to discuss the situation as to the effect that outside contracting may have had, or will have on such situations, and attempt to remedy the circumstances.
ARTICLE 13 - NEW CLASSIFICATIONS
13.1 When a new job is created, the Company will set up a new classification and rate covering the job in question and notify the Bargaining Committee of the classification and rate it has established.
13.2 The new classification and rate will be considered temporary for a period of thirty (30) calendar days following the date of notification to the Bargaining Committee. During this period, but not thereafter, the Bargaining Committee may request the Company to negotiate a different rate for the classification. The negotiated rate, if higher than the temporary rate, shall be applied retroactively to the date of the establishment of the temporary classification and rate unless
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
otherwise mutually agreed. If no request has been made by the Union to negotiate the rate within the thirty (30)day period, or if within sixty (60) days from the date of notification to the Bargaining Committee no grievance is filed concerning the temporary classification and rate, the temporary classification and rate shall become permanent.
13.3 If a grievance is filed on the temporary classification and rate the grievance shall be handled according to the Grievance Procedure outlined in this contract. If the grievance is referred to the Arbitrator, he will be empowered to determine the proper classification and/or rate for the new job, using as a basis of comparison other jobs in the plant where the dispute exists, taking into consideration the effort and/or skill required of the employee on the new job. This paragraph may not be interpreted that a dispute on a production standard is to be referred to arbitration without specific agreement by the parties in writing.
ARTICLE 14 - GENERAL
14.1 Employees must possess the tools of the trade.
14.2 During inventory shutdowns, employees who are not assigned to their normal jobs, will be given first opportunity to take inventory by seniority (length of service). If sufficient employees do not volunteer, then employees with least amount of plant seniority will be required to work.
14.3 The rates of pay are fixed for the life of this Agreement and the Parties will not be required to bargain under the claim of intra-plant or inter-plant inequities, or upon any other basis whatsoever, for increases in rates of pay or other benefits, fringes, or otherwise. The classifications and rates are set forth in Schedule 2005.
14.4 The Company and the Union each agrees that the other shall not be obligated to bargain collectively with respect to any subject or matter specifically referred to or covered in this Agreement, or with respect to any subject or matter not specifically referred to or covered by this Agreement.
14.5 Employees will be paid during their regular working hours as per present practice.
14.6 Upon presentation of a properly completed sickness and accident (S&A) claim form to the Human Resources Department, the Company will provide a short term loan (upon request) until the S&A payments begin.
14.7 It is the responsibility of the employee to maintain their current address and telephone number on file with the company.
14.8 Employees have the option of being paid by automatic deposit into the checking or savings account of their choice, or receiving a conventional paycheck.
14.9 The Company and Union agree that all employees have a responsibility to share knowledge as a part of their job.
14.10 The Company and Union will discuss in detail during the life of the Agreement regarding ways to improve productivity, with the goal of reducing set-up times, eliminating scrap, and increasing general plant efficiency.
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
14.11 RECORDING OF EMPLOYMENT STATUS - A record will be kept of any action where a change is made in the employment status of an employee and in each such case the Company will furnish a copy to the Bargaining Committee and to the employee.
14.12 CHANGE OF ADDRESS - An employee will notify the Human Resource Department of any change in address and telephone number in person, by certified or registered mail, telegram, or mailgram, or by an authority countersigned by the affected employee, and will receive verification of such notification on a Company form. The extent of the Company's liability is to rely upon the last address reported to the Company. The Bargaining Committee will be given a copy of each change of address. When a recall is necessary the Company shall notify the employee by certified or registered mail. Telephone, telegram, or mailgram may be used but in such cases a certified or registered letter will be used to confirm
14.13 UNCLAIMED WAGES - Upon request by the financial officer of the Local Union, the Company will furnish at least once a year the names, last known address and the amount of unclaimed wages due to such individuals.
14.14 BULLETIN BOARDS - The Company will furnish bulletin boards for the use of the Union who may post notices which have been approved by the Bargaining Committee. Such notices shall be signed by the Chairman or Secretary of the Bargaining Committee and shall have a date for posting and a date for removal.
14.15 WORK RULES - The- Bargaining Committee will receive one week's advance notice of new rules or changes in existing rules. Any protest over the new rule will be handled through the grievance procedure.
ARTICLE 15 - EQUAL EMPLOYMENT OPPORTUNITY
15.1 The Company has pledged and the Union has agreed to cooperate in any and all efforts to ensure equal employment opportunity. It is understood that the word he or she as used throughout this Agreement will designate an employee.
ARTICLE 16 - VACATION
16.1 The qualifying vacation year shall be from July 1st to June 30th. Only employees on the seniority list on the last day in June are entitled to vacation pay.
16.2 For the purposes of this article only, an employee whose seniority falls on the first day of the month immediately following the completion of a full year of service in the bargaining unit, shall receive credit for vacation purposes for such full year of service.
16.3 Vacation will be computed on the basis of seniority on the last day of June as follows:
1. Six months and under one year: 1 1/2% of gross earnings during the qualifying vacation year.
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
2. One year and under three years: 5% of gross earnings during the qualifying vacation year.
3. Three years and under five years: 6% of gross earnings during the qualifying vacation year.
4. Five years and under fifteen years: 7% of gross earnings during the qualifying vacation year.
5. Fifteen years and over: 8% of gross earnings during the qualifying vacation year.
6. In addition to the above, eligible employees will receive an additional 2/5% of gross earnings for each year of service over twenty years up to a maximum of an additional 2% of gross earnings for twenty-five years of service or more. These employees will receive vacation pay as follows:
7. Twenty-one Years and Under Twenty-two: 8-2/5% of gross earnings during the qualifying vacation year.
8. Twenty-two Years and Under Twenty-three: 8-4/5% of gross earnings during the qualifying vacation year.
9. Twenty-three Years and Under Twenty-four: 9-1/5% of gross earnings during the qualifying vacation year.
10. Twenty-four Years and Under Twenty-five: 9-3/5% of gross earnings during the qualifying vacation year.
11. Twenty-five Years and Over: 10% of gross earnings during the qualifying vacation year.
12. This additional vacation pay over 8% of gross earnings is for pay purposes only and is not to be equated to additional vacation time off.
16.4 Vacation pay will be paid to an employee who retires pursuant to the Pension Agreement made between the parties for the vacation year in which such employee retires. Any accumulated vacation pay will be paid as soon as practical after the effective date of retirement. Vacation pay will be paid to the estate of a deceased employee.
16.5 Employees may elect to receive their vacation pay in one check to be received by July 15, or in four quarterly payments to be received by July 15, October 15, January 15, and April 15. Employees interested in the quarterly payment option must request it by June 15 and may not change their election after that date. Those who do not request the quarterly option by June 15 will be paid out in full by July 15. No interest will be paid on monies held back for those employees requesting the quarterly payment option.
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
16.6 For the purpose of determining available time off, the following procedures will apply:
1. If an employee has worked for the Company more than six (6) months prior to July 1st of the vacation year, and less than five (5) years total, he will be granted 6-2/3 hours vacation time off for each month worked for the Company since July 1st of the previous year.
2. Employees who have more than five (5) years seniority with the Company prior to July 1st of the vacation year, will be granted 8-2/3 hours vacation time off for each month worked for the Company since July 1st of the previous year.
3. Employees who have more than ten (10) years seniority with the Company prior to July 1st of the vacation year, will be granted 10 hours vacation time off for each month worked for the Company since July 1st of the previous year.
4. Employees who have more than fifteen (15) years seniority with the Company prior to July 1st of the vacation year, will be granted 12-2/3 hours vacation time off for each month worked for the Company since July 1st of the previous year.
5. Employees who have more than twenty (20) years seniority with the Company prior to July 1st of the vacation year, will be granted 15 hours vacation time off for each month worked for the Company since July 1st of the previous year.
6. A month worked is any calendar month during which the employee works at least one half (1/2) the work days of such month. Work is defined as time spent on the job and shall include weeks during which employees are absent receiving weekly disability benefits pursuant to Supplement B of the Master Agreement up to a maximum of 52 weeks.
16.7 MAXIMUM VACATION TIME OFF PROVIDED FULL ENTITLEMENT IS EARNED:
SENIORITY VACATION TIME OFF As of June 30th For Year Starting July 1st --------------- -------------------------- 6-Months 10 days 5-Years 13 days 10-Years 15 days 15-Years 19 days 20-Years 23 days* |
* indicates rounding up since vacations are taken only in full day increments.
16.8 EXTRA FIVE DAY UNPAID VACATION BLOCK - Employees with at least fifteen (15) years of seniority prior to the start of the vacation year will be allowed to take five (5) extra unpaid vacation days during the year, provided that (a) they must be used as a full week block of five consecutive days, and (B) they cannot be requested until all paid vacation has been used.
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
16.9 The Company reserves the right to schedule vacation time off, provided there shall be no discrimination and seniority will be a factor. Employees submitting vacation request for the next vacation year prior to May 15 will be given preference on the basis of classification seniority. For vacation requests made after May 15, the originally scheduled vacation takes precedence over seniority. Vacation time off requests must be in eight (8) hour increments. The intent of the above is that as many as possible schedule vacation time off before May 15 and those that do shall have preference by seniority; those that schedule later than May 15 shall not be allowed to use seniority as a means of bumping those who schedule before May 15.
16.10 Vacation shutdowns will be announced prior to May 1 of any year scheduled.
16.11 All vacation time off requests must be submitted by the end of the regular shift time the scheduled work day prior to the start of the desired vacation, except that five days of employee vacation time off will be designated as "short notice vacation time off days." These short notice time off vacation days may be requested no later than the starting time of the scheduled shift on the day of the vacation, provided that no short notice vacation time off days may be requested on any of the last five regularly scheduled working days of any calendar month, or the day prior to any paid holiday, or any of the days scheduled for annual plant inventory. Employees calling in for short notice vacation time off days prior to the shift start must either speak directly with a supervisor, or leave a clear message including their name, department, and exactly what day(s) are requested on the supervisor's voice mail.
ARTICLE 17 - PAID HOLIDAYS
PAID HOLIDAYS
17.1 An employee with seniority will be paid for the following holidays:
1. First Year Of Contract (14 Holidays) ---------------------------------------- (1) Monday, July 4, 2005 Independence Day (2) Monday, September 5, 2005 Labor Day (3) Thursday, November 24, 2005 Thanksgiving Day (4) Friday, November 25, 2005 Day After Thanksgiving (5) Friday, December 23, 2005 In lieu of Christmas Eve (6) Monday, December 26, 2005 In lieu of Christmas Day (7) Tuesday, December 27, 2005 Shutdown Day #1@ (8) Wednesday, December 28, 2005 Shutdown Day #2@ (9) Thursday, December 29, 2005 Shutdown Day #3@ (10) Friday, December 30, 2005 In lieu of New Years Eve (11) Monday, January 2, 2006 In lieu of New Years Day (12) Monday, January 16, 2006 (or Floating Holiday) Martin Luther King Day or FH* (13) Friday, April 14, 2006 Good Friday (14) Monday, May 29, 2006 Memorial Day |
* FH must be requested in writing 2 days in advance.
2. Second Year of Contract (14 Holidays) ---------------------------------------- (1) Tuesday, July 4, 2006 Independence Day (2) Monday, September 4 2006 Labor Day |
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
(3) Thursday, November 23, 2006 Thanksgiving Day (4) Friday, November 24, 2006 Day After Thanksgiving (5) Friday, December 22, 2006 In lieu of Christmas Eve (6) Monday, December 25 2006 Christmas Day (7) Tuesday, December 26, 2006 Shutdown Day #1@ (8) Wednesday, December 27, 2006 Shutdown Day #2@ (9) Thursday, December 28, 2006 Shutdown Day #3@ (10) Friday, December 29, 2006 In lieu of New Years Eve (11) Monday, January 1, 2007 New Years Day (12) Monday, January 15, 2007 (or Floating Holiday) Martin Luther King Day or FH* (13) Friday, April 6, 2007 Good Friday (14) Monday, May 28, 2007 Memorial Day |
* FH must be requested in writing 2 days in advance.
3. Third Year of Contract (14 Holidays) --------------------------------------- (1) Wednesday, July 4, 2007 Independence Day (2) Monday, September 3, 2007 Labor Day (3) Thursday, November 22, 2007 Thanksgiving Day (4) Friday, November 23, 2007 Day After Thanksgiving (5) Monday, December 24, 2007 Christmas Eve (6) Tuesday, December 25, 2007 Christmas Day (7) Wednesday, December 26, 2007 Shutdown Day #1@ (8 Thursday, December 27, 2007 Shutdown Day #2@ (9) Friday, December 28, 2007 Shutdown Day #3@ (10) Monday, December 31, 2007 New Years Eve (11) Tuesday, January 1, 2008 In lieu of New Years Day (12) Monday, January 21 2008 (or Floating Holiday) Martin Luther King Day or FH* (13) Friday, March 21, 2008 Good Friday (14) Monday, May 26, 2008 Memorial Day |
* FH must be requested in writing 2 days in advance.
@ Note: Shutdown Days 1, 2, and 3 are subject to rules of special scheduling.
17.2 Employees who qualify under the provisions set forth in this Article will be paid eight (8) hours straight-time pay exclusive of night shift and overtime premiums for each such holiday. In the case of an incentive worker, the employee's average rate exclusive of night shift and overtime premium for the week in which the holiday falls will be used. For holidays which comprise the Christmas Holiday Period, the incentive worker's average rate exclusive of night shift and overtime premium for the last full week immediately preceding the shutdown period will be used.
17.3 HOLIDAY ELIGIBILITY REGULATIONS WHICH APPLY ONLY TO PAID HOLIDAYS OTHER THAN THE CHRISTMAS HOLIDAY PERIOD
1. An employee must work at least twenty-three and one-half (23 1/2) hours during a work week in which a holiday falls (fifteen and one half (15 1/2) hours in a week in which two (2) holidays are celebrated during the regular five (5) day work week.
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
2. Regular working hours during a holiday week excluding the paid holiday itself, in which the plant is shut down will be credited toward fulfilling the twenty-three and one-half (23 1/2) hour requisite in determining eligibility for holiday pay, or: seniority employees on layoff or approved leave of absence when the holiday occurs who return to work following the holiday but during the week in which the holiday falls shall receive pay for such holiday.
3. Notwithstanding the provisions above, seniority employees who have been laid off but who worked in the work week in which the holiday falls, or the work week prior to the week in which the holiday falls, shall receive pay for such holiday.
17.4 HOLIDAY ELIGIBILITY REGULATIONS WHICH APPLY ONLY TO THE CHRISTMAS HOLIDAY PERIOD
1. An employee on approved Personal Leave of Absence or an employee on an Illness Leave of Absence, who is cleared by his doctor to return to work during the Christmas holiday period, shall be eligible for paid holidays for which he was available for work, providing he works his first scheduled work day following the holiday period.
2. Seniority employees on layoff during the Christmas Holiday Period, but who worked in the work week in which the Christmas Holiday Period begins, or in the first, second, third or fourth work week prior to the week in which the Holiday Period begins, will receive holiday pay for each of the holidays in the Holiday Period, provided they work on their last scheduled work day.
3. An employee on layoff during the Christmas holiday period who is scheduled to return to work during the week in which the holiday period ends shall be eligible for paid holidays which fall in such week providing he works his first scheduled work day in such week.
4. The twenty-three and one half (23 1/2) hours of work requirement does not apply to the Christmas holiday periods.
5. Employees must work the last scheduled work day in the week immediately preceding the shutdown period and the first scheduled work day in the week immediately following the shutdown period. An employee will be expected to work his entire scheduled shift on these two days. Time not at work due to emergency or due to causes beyond the control of the employee may merit consideration at the discretion of the Company.
6. A seniority employee absent without approval of his supervisor on either the last scheduled working day prior to or the next scheduled working day after a Christmas holiday period, shall be ineligible for pay for two (2) of the holidays in the Christmas holiday period, but shall, if otherwise eligible, receive pay for the remaining holidays in the Christmas holiday period. The two (2) days of ineligibility are designated to be the two (2) days closest to the day in which the employee was absent.
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
7. If an employee is scheduled for and accepts an assignment to work on a Saturday or Sunday immediately prior to a day of holiday such assignment shall be considered to be his last scheduled work day.
8. The parties to this Agreement recommend the exchange of paid holidays, on a voluntary local basis, in those cases where some work has to be performed during the Christmas holiday period.
9. The requirement that an employee work the first scheduled work day in the week immediately following the holiday period shall not apply to an employee who retires with a January 1 effective date.
17.5 CHRISTMAS HOLIDAY PERIOD
1. In order for employees to have maximum time off during the Christmas holiday period, employees will be called in to work only in emergencies on the following days which are not paid holidays under this Agreement:
Saturday, December 31, 2005
Sunday, January 1, 2006
Saturday, December 30, 2006
Sunday, December 31, 2006
Saturday, December 29, 2007
Sunday, December 30, 2007
2. An employee shall not be disqualified for holiday pay if he does not accept work on such days. This statement does not apply to employees on necessary continuous seven day operations.
3. It is the purpose of the Holiday Pay provisions of this Agreement to enable eligible employees to enjoy the specified holidays with full straight-time pay. If, with respect to a week included in the Christmas holiday period an employee supplements his Holiday Pay by claiming and receiving an unemployment compensation benefit, or claims and receives waiting period credit, to which he would not have been entitled if his Holiday Pay had been treated as remuneration for the week, the employee shall be obligated to pay to the Corporation the lesser of the following amounts: (A) an amount equal to his Holiday Pay for the week in question, or (B) an amount equal to either the unemployment compensation paid to him for such week or the unemployment compensation which would have been paid to him for such week if it had not been a waiting period. The Corporation will deduct from earnings subsequently due and payable the amount which the employee is obligated to pay as provided above.
17.6 HOLIDAY ELIGIBILITY REGULATIONS WHICH APPLY TO BOTH THE CHRISTMAS HOLIDAY PERIOD AND TO OTHER PAID HOLIDAYS
1. An employee must have seniority as of the date of the holiday.
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
2. Only emergency crews will be worked on a holiday unless otherwise agreed prior to a holiday. An employee working on a holiday will be paid holiday pay under this section and in addition will be paid double time for hours worked on the Holiday. Notwithstanding the provisions above, an employee scheduled to work and accepting a work assignment on any of the listed holidays but failing to report for and to perform work will not receive pay for the holiday.
3. When an employee is eligible for holiday pay and also for a Weekly Disability Benefit for the same day, the Disability Benefit less any applicable Workers' Compensation Benefit will be paid and the excess of holiday pay over the Disability Benefit or Workers' Compensation Benefit, whichever is greater, will be paid as soon as practicable in the form of make-up holiday pay.
4. In the event a holiday falls within an employee's approved vacation period, he shall be paid for that holiday in addition to his vacation pay.
5. Approved time off for jury duty service, short-term military service and funeral leave will be considered as hours worked for holiday pay eligibility purposes.
11. Notwithstanding the provisions above, seniority employees who have gone on an approved leave of absence during the work week prior to, or during the work week in which the holiday falls, shall receive pay for such holiday.
17.7 SPECIAL CHRISTMAS HOLIDAY PROCEDURES - The following will apply to up to three holidays that fall between Christmas and New Years Eve, provided the Company posts a tentative work crew roster by December 10th:
1. Employees will be voluntarily solicited by classification to perform necessary work during the holiday period.
2. Employees working during this period shall be given the option to receive either double time pay or straight time pay with an equal amount of floating holidays to be taken with two (2) days notice at any time up to December 24th of the following year. If these floating holidays are not utilized they will be paid in lieu of time off in the first full pay period of the following calendar year.
3. Employees working during this period will be required to work in other classifications if the need arises.
4. Restrictions of overtime sharing within classifications will be waived for this holiday period.
5. If an emergency situation arises that requires additional manpower, the Company will attempt to contact the employee within the needed classifications on the basis of seniority. If no additional help can be obtained through this procedure, the Company reserves the right to use salaried employees to do the required work.
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
6. A tentative work crew roster will be completed by December 10 of each year preceding the holiday period and the Union will be informed.
ARTICLE 18 - BEREAVEMENT PAY
18.1 When death occurs in his immediate family (current spouse, parent,
stepparent, parent or stepparent of current spouse, child, stepchild, brother,
stepbrother, sister, stepsister, grandparents, grandparents of current spouse,
grandchild, step grandchild) an active employee with seniority, on request, will
be excused for up to three (3) regularly scheduled days of work during the three
(3) days (excluding Saturdays, Sundays and paid holidays) immediately following
the death. After making written application within 30 days following the death,
the employee shall receive 24 hours pay. Days of layoff, leave of absence, and
short-term military duty are days for which the employee is not entitled to
Bereavement Pay.
18.2 When a death occurs prior to or during a vacation which is scheduled, up to one week of vacation shall be cancelled and rescheduled, should the employee so desire.
18.3 Payment shall be made at the employee's regular straight-time hourly rate at the time of the death. Time thus paid will not be counted as hours worked for purposes of overtime.
18.4 Bereavement Pay will be paid in instances involving stillborn birth after seven months.
18.5 When the date of the funeral or memorial service is outside the initial three-day period following the death, the employee may have his excused absence from work delayed until the period of three normally scheduled working days, which includes the date of the funeral.
18.6 In the event an employee is granted a leave of absence because of the illness of a member of his immediate family and such family member dies within the first seven (7) calendar days of the leave, the requirement that the employee otherwise would have been scheduled to work will be waived.
ARTICLE 19 - PAY FOR JURY DUTY
19.1 Any employee with seniority who is called to and reports to qualify or serve on Jury Duty (including coroner's juries) or who is subpoenaed to appear as a witness, shall be paid the difference between his regular wages for the number of hours, up to eight (8) that he otherwise would have been scheduled to work -and the money he receives for each day partially or wholly spent in performing the duties of a juror or a witness, if the employee otherwise would have been scheduled to work for the Company. In order to receive payment under this section, an employee must give the Human Resources Department prior notice that he has been summoned or subpoenaed and must furnish satisfactory evidence of the summons or subpoena and the fact that he reported and as a result lost time on the days for which he claims such payment.
19.2 An employee who is subpoenaed to serve as a witness in a Federal or State court of law in the state in which he is working or residing will not be eligible for pay under this article If he:
a) is called as a witness against the Company or its interests; or
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
b) is called as a witness on his own behalf in an action in which he is a party; or
c) voluntarily seeks to testify as a witness; or
d) is a witness in a case arising from or related to his outside employment or outside business activities.
19.3 An employee assigned to the third shift will not be required to work on the shift immediately preceding the time such employee is to report or if the hours scheduled or the distance to be traveled substantially results in such employee losing the scheduled workday prior to or following the day of duty, such employee will be paid his regular wages for such day. An employee assigned to the first shift, and an employee assigned to the second shift will not be required to work on the day such employee is to report.
ARTICLE 20 - SHORT-TERM MILITARY DUTY PAY AND RE-EMPLOYMENT RIGHTS
20.1 An employee with one or more years of seniority who is called to and performs short-term active duty of thirty (30) days or less, including annual active duty for training, as a member of the United States Armed Forces Reserve or National Guard shall be paid by the Company for each day partially or wholly spent in performing such duty, if the employee otherwise would have been scheduled to work for the Company and does not work, an amount equal to the difference, if any, between the employee's regular straight-time hourly rate on the last day worked and his daily military earnings (including all allowances except for rations, subsistence and travel). The Company's obligation to pay an employee for performance of military duty under this Section is limited to a maximum of ten (10) scheduled working days in any calendar year, except that short term active duty for call-outs by state or federal authorities in case of public emergency shall be limited to a maximum of thirty (30) scheduled working days in any calendar year.
20.2 In order to receive payment under this Section an employee must give the Company prior notice where possible of such military duty and upon his return to work must furnish the Company with a statement of his military pay while on such duty.
20.3 RE-EMPLOYMENT RIGHTS AND BENEFITS FOR EMPLOYEES IN MILITARY SERVICE Any employee who enters into the Armed Forces of the United States under existing Federal Regulations shall be granted a leave of absence and will be accorded reinstatement rights as provided by the applicable laws then in force. While in military service, the Company agrees to continue, at the option of the employee, the same Hospital-Surgical-Medical-Drug coverage for dependents of the employee as the Company furnishes to other employees in the Bargaining Unit from which he left. For this coverage the employee will pay the Company the actual Company rate. The maximum time limit for continuance of this insurance is three (3) years.
ARTICLE 21 - PERSONAL LEAVE OF ABSENCE
21.1 An employee shall be granted a personal leave of absence provided such leave is for good and sufficient cause as determined by the Company and is approved by the Company, and
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
such employee will accumulate seniority during such leave. Such leave will be for a period not to exceed six (6) months with the privilege of requesting an extension.
ARTICLE 22 - MEDICAL LEAVE OF ABSENCE
22.1 An employee with seniority who is unable to work because of injury or illness shall be granted a sick leave of absence with accumulated seniority for the duration of the disability but not to exceed six (6) months without renewal.
22.2 A medical leave of absence for injury or illness must be substantiated, with satisfactory evidence of the employee's condition, as soon as possible but no later than time required in Section 7.30. The Company will, however, consider extenuating circumstances which prevent the timely submission of such evidence, on an individual basis.
22.3 Medical leaves of absence may be granted in accordance with the disability plan.
ARTICLE 23 - ON THE JOB INJURY
23.1 An - employee who is injured on the job for whom first aid is inadequate but a doctor's care is required will, on the initial day of medical treatment, be provided transportation to and from the doctor's office or hospital.
23.2 If the employee, in the opinion of the doctor, is able to return to work for the balance of his shift he shall do so; if the doctor or the Company excuses him for the balance of the shift he may go home.
23.3 An employee who must leave the plant for medical attention as described above, shall be compensated at his regular rate of pay, up to a maximum of the balance of the shift.
23.4 Employees who are able to return to work but need subsequent medical attention shall be paid for time actually lost as provided above if such care occurs during their regularly scheduled working hours. The question of the necessity for such re-visits shall be determined by the attending physician. The employee will make every effort to schedule such visits outside of normal working hours.
23.5 A Union Representative will be notified and may be present when a Workers' Compensation claim is discussed with an employee during regular working hours on the Company premises.
23.6 If such lost time occurs on a Saturday, Sunday or a holiday for which he is scheduled to work, the employee shall be paid on the basis of premium pay applicable for that day.
ARTICLE 24 - SAFETY AND HEALTH
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
24.1 The Company will conduct its plant and office in such a manner that they will meet the requirements of workplace inspection laws and other laws for protection of the health and safety of employees.
24.2 A Safety Committee shall be set up. This committee shall consist of the following Company and Bargaining Unit persons: (1) Bargaining Unit: At least one member of the Plant Committee, and at least one person from the Maintenance Department. (2) Management: The Plant Manager will Chair the Committee, and the Human Resources Manager and at least one Engineer will participate. The Committee will meet monthly.
24.3 The Safety Committee shall be paid at their regular hourly rate for such time as may be necessary to investigate and meet on safety issues. Company and Union Safety Committee representatives may accompany Government Health and Safety inspectors - on plant inspection tours.
24.4 Upon request of the Safety Committee, the Company will make available copies of reports concerning Health and Safety matters. The Company will provide copies of the OSHA "Log of Occupational Injuries and Illnesses," as it is now constituted, to the designated Union Safety Representative.
24.5 An employee who believes he is working on an unsafe machine or operation shall report such condition to his supervisor immediately. When required by OSHA, the Company will provide physical examinations and other appropriate tests for employees who are exposed to potentially toxic agents or materials, at no cost to the employees.
24.6 Any disagreement or dispute relating to safety and/or health which cannot be resolved by the Safety Committee may be treated as a grievance and processed through the regular grievance procedure. When written notice is given that a grievance based upon an alleged violation of this article, has not been satisfactorily settled in the First Level, it shall be placed immediately in the last level of the local agreement's Grievance Procedure, involving the local management, local committee and the International Union Representative.
24.7 The Company shall provide the necessary or required personal protective equipment, devices and clothing at no cost to employees in accordance with present local practice.
24.8 A Hazardous Communication Program (HCP) has been developed that adopts the OSHA Standards regarding hazardous materials in the workplace, and the employees' right to know the contents and safe handling procedures of such materials. (OSHA Standard 1910.1200 Hazard Communication.) The Safety Committee will review the HCP Program and make recommendations for necessary updates and improvement on an annual basis.
24.9 The Company will provide protective gloves at various safety stations for use when assisting injured employees, in accordance with OSHA standard.
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
ARTICLE 25 - INSURANCE
25.1 The Medical Insurance Options are shown below. The Company will continue to offer the traditional plan and the HMO plan with no changes in benefit levels. The Company reserves the right to change carriers and/or administrators. Employees will pay the weekly contributions shown below or the indicated percentage of the monthly premium, whichever is less (see Addendum 1 and Addendum 2).
1. HEALTH ALLIANCE PLAN (HAP) - with the following maximum weekly employee contributions:
YR1 (6-6-05 TO 6-4-06) YR2 (6-5-06 TO 6-3-07) YR3 (6-4-07 TO 6-1-08) ---------------------- ---------------------- ---------------------- Single HAP: $15.42 $22.17 $25.49 Couple HAP: $35.47 $50.98 $58.63 Family HAP: $40.10 $57.64 $66.29 |
2. ANTHEM BCBS HEALTH PLAN - with the following maximum weekly employee contributions:
YR1 (6-6-05 TO 6-4-06) YR2 (6-5-06 TO 6-3-07) YR3 (6-4-07 TO 6-1-08) ---------------------- ---------------------- ---------------------- Single Anthem: $17.73 $25.49 $29.31 Couple Anthem: $35.47 $50.98 $58.63 Family Anthem: $51.43 $73.92 $85.01 |
25.2 The schedule of benefits for each plan will be fixed for the life of the agreement, and will be made available to employees at annual open enrollment. The above plans are subject to availability from the carrier.
25.3 OPT OUT BONUS - Employees may elect to decline health care coverage, with proof of alternate coverage, and will receive fifty dollars ($50.00) per month from the Company.
25.4 The Dental Insurance options are shown below. The Company will continue to offer the current schedule of benefits under Delta Dental. The Company reserves the right to change carriers or administrators. Employees will pay the weekly contributions shown below:
YR1 (6-6-05 TO 6-4-06) YR2 (6-5-06 TO 6-3-07) YR3 (6-4-07 TO 6-1-08) ---------------------- ---------------------- ---------------------- Single Dental: $1.67 $1.92 $2.21 Couple Dental: $2.83 $3.25 $3.74 Family Dental: $4.83 $5.56 $6.39 |
Benefits include annual maximum of $1,000 per patient; Deductible $25 single or $75 family per year; Orthodontic lifetime maximum $1,200; preventive and diagnostic services not subject to deductible at 100% of reasonable and customary fee; Basic Restorative Services 80/20 co-pay; Crowns 50/50 co-pay; Prosthodontics 50/50 co-pay; Child Orthodontia 50/50 co-pay.
25.5 RETIREE INSURANCE
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
1. VEBA - The current VEBA plan and contribution level will be maintained for the life of the Agreement.
3. HEALTH AND LIFE INSURANCE - Eligible employees with pension credited service dates on or before January 1, 1991 will be eligible for retiree health and life insurance; others none. Surviving spouse pensions will include health insurance on the survivor and/or eligible children provided they were insured under the retiree group insurance plan at the time of the retiree's death. Surviving spouse insurance terminates should the eligible survivor re-marry.
4. DENTAL INSURANCE - Eligible employees with pension credited service dates on or before January 1, 1991 will be eligible for retiree dental coverage for the employee only (no dependent coverage) for a period of two years following the date of retirement.
5. CONTRIBUTION - No weekly premium contribution for eligible retirees.
6. CARRIER - retirees may participate in any plan offered to active employees, subject to availability from the carrier.
25.6 DISABILITY
1. SICKNESS AND ACCIDENT (S&A) PLAN - The Company will provide a disability plan that provides a benefit of 66-2/3% of an employee's base pay to a maximum of $450 weekly, for a maximum benefit of twenty-six (26) weeks. The weekly maximum will increase during the life of the contract as shown below:
December 6, 2004 $450 June 6, 2005 $475 June 5, 2006 $485 June 4, 2007 $500 |
2. LONG TERM DISABILITY PLAN - The Company will also provide a long term disability plan that provides a weekly benefit of fifty percent (50%) of an employee's weekly base pay to a maximum of $450 weekly, for a maximum benefit period of twenty-four (24) months. The weekly maximum will increase during the life of the contract as shown below:
December 6, 2004 $450 June 6, 2005 $475 June 5, 2006 $485 June 4, 2007 $500 |
25.7 CONTINUATION OF INSURANCE BENEFITS WHILE LAID OFF OR ON DISABILITY
1. WHILE ON LAYOFF - Life, AD&D, health, and dental insurance will continue while on layoff for the length of the layoff, or for six (6) months maximum.
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
2. WHILE DISABLED - Life, AD&D, health and dental insurance will continue for the length of the disability or for thirty (30) months maximum.
25.8 LIFE INSURANCE - The company will provide to eligible employees, forty thousand dollars ($40,000) of group term life insurance and forty thousand dollars ($40,000) of group accidental death and dismemberment insurance on the employee only. The life insurance and AD&D will increase during the life of the contract as shown below:
December 6, 2004 $40,000 June 6, 2005 $45,000 June 4, 2007 $50,000 |
25.9 OPTIONAL DEPENDENT LIFE INSURANCE - Eligible employees may purchase optional dependent life insurance for their spouse and eligible children who are at least fourteen days old, at rates determined by the carrier, in one of the following two options: (1) Ten thousand dollars ($10,000) group term life on spouse, and four thousand dollars ($4,000) group term life on each eligible dependent child, or (2) Five thousand dollars ($5,000) group term life on spouse, and two thousand dollars ($2,000) on each eligible dependent child. Premiums will be paid through payroll deduction for active employees, and employees on layoff or sick leave may continue optional dependent life insurance coverage by paying the required premiums, for as long as their benefit eligibility status continues according to the carrier.
25.10 EMPLOYEE ELIGIBILITY - New hires will become eligible for health, dental, disability, life, optional dependent life, and ad&d, provided they are a full time active employee, and provided they qualify according to plan rules, and provided they make any required employee contribution or premium payments, on the first calendar day of the month following completion of sixty (60) calendar days of employment. Should the employee be disabled or otherwise ineligible on this date all group insurance effective dates will be postponed until the employee is in active status and has returned to work. All full time hourly bargaining unit Employees are eligible for group insurance. Temporary and part time employees who do not acquire seniority are not eligible.
25.11 DEPENDENT ELIGIBILITY - Dependents are eligible for health, dental, and optional dependent life insurance, provided they qualify according to plan rules, and the employee makes any required dependent contribution or premium payments. The employee's spouse and unmarried dependent children (including adopted children and step-children in the household) until the end of the calendar year in which such children attain twenty-five (25) years of age, provided that any child over nineteen (19) years of age must legally reside with or be a member of the household of the employee (or may reside elsewhere provided a court order requires the employee to provide medical care for the child) and must be dependent upon the Employee within the meaning of the Internal Revenue Code of the United States, and must be a full time student. Dependents hospitalized on the dependent health insurance effective date will not be covered in the Group until they are released from the hospital and no longer under a physician's care, and able to carry on the regular and customary activities of a healthy person of the same age and sex.
25.12 STATUS CHANGES - Employees are required to notify human resources of any eligibility status changes (i.e. divorce, marriage, birth of child, etc) immediately. Failure to do so within thirty
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
(30) calendar days may jeopardize eligibility for group insurance benefits, and could invalidate claims paid in error.
25.13 BENEFICIARY - Employees are required to keep an up-to-date beneficiary election on file in human resources, and to notify immediately of any change.
25.14 SUMMARY PLAN DESCRIPTIONS - Summary plan descriptions will be provided from time to time by the Company or by the carrier, as required by law.
25.15 FLEXIBLE SPENDING ACCOUNTS - The Company will make available to employees, provided it is allowable under law, a flexible spending account for (1) qualified health expenses and (2) qualified dependent care expenses. Both of these accounts are optional, and require employee pre-tax contributions which are forfeited following the calendar year if expenses submitted for reimbursement are less than the amount contributed. Details of the plans will be provided annually to employees for their consideration at open enrollment time.
ARTICLE 26 - 401(K) PLAN
26.1 The Formsprag 401(k) plan will be continued for the life of the Agreement and a Summary Plan Description will be distributed to employees.
26.2 SPECIAL 401(k) Contribution For Pension Participants - One thousand dollars ($1,000) will be deposited into the 401K account of each pension participant on November 1, 2007 to coincide with the freezing of the basic pension benefit in Article 27. This special Contribution is immediately 100% vested.
26.3 ONGOING PARTICIPATION IN 401(k) PLAN FOR PENSIONERS - Beginning November 1, 2007 each pension participant that had their basic benefit frozen as shown in Article 27 will also be given a two percent (2%) Company Contribution in their 401(k) plan each anniversary date. The first contribution will include the time period from November 1, 2007 until the first anniversary date following November 1, 2007; thereafter, the contributions will be annually on the anniversary date. All employees with three or more years of service are immediately 100% vested in these Contributions.
26.4 NEW HIRES and 401(k): All employees hired on or after December 3, 2001 will participate in the Company's 401(k) plan in lieu of participating in the pension plan. These employees will receive lump sum contributions on their anniversary date to their 401(k) accounts as follows:
1. ANNIVERSARY OF COMPLETING FIRST YEAR OF EMPLOYMENT - One percent (1%) of employee's gross earnings.
2. ANNIVERSARY OF COMPLETING SECOND YEAR OF EMPLOYMENT - One and one-half percent (1.5%) of employee's gross earnings.
3. ANNIVERSARY OF COMPLETING THIRD YEAR OF EMPLOYMENT - Two percent (2.0%) of employee's gross earnings.
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
4. EACH ANNIVERSARY OF COMPLETING A YEAR THEREAFTER - Two percent (2.0%) of employee's gross earnings.
5. VESTING - The above Company contributions will vest at the end of the employee's third year of continuous employment. At this time they will be 100% vested.
ARTICLE 27 - PENSION
27.1 The Pension Plan will be continued, with the following modifications, for the life of the Agreement and Summary Plan Descriptions will be distributed to employees.
27.2 BASIC BENEFIT - $32.50. Freeze additional accumulation of pension benefit service on October 31, 2007. Additional service still counts toward meeting supplement service milestones.
27.3 EARLY RETIREMENT SUPPLEMENT - maintained for all employees whose pension credited service date is January 1, 1991 or earlier. Eliminated for all other employees.
27.4 INTERIM SUPPLEMENT - maintained for all employees whose pension credited service date is January 1, 1991 or earlier. Eliminated for all other employees.
27.5 MEDICARE BENEFIT - maintained for all eligible employees on the seniority list as of the December 3, 2001.
27.6 SURVIVOR PENSION BENEFIT OPTION - maintained for all eligible employees on the seniority list as of December 3, 2001.
27.7 SPECIAL EARLY PENSION BENEFIT OPTION - maintained for all eligible employees on the seniority list as of December 3, 2001.
27.8 TEMPORARY BENEFIT SUPPLEMENT (Part of Special Early) - Eliminated.
ARTICLE 28 - WAGES
28.1 WAGES
1. FIRST YEAR OF CONTRACT - There will be a seven hundred fifty ($750) lump sum ratification bonus to be paid to all seniority employees by June 17, 2005. Employees hired before ratification date but yet on the seniority list will only receive the bonus if they complete their probationary period with the Company.
2. SECOND YEAR OF CONTRACT - There will be a lump sum wage payment equal to two percent (2%) of gross earnings for the prior fifty-two (52) week period ending June 4, 2006, to be paid to all eligible employees on the seniority list by June 26, 2006.
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
3. THIRD YEAR OF CONTRACT - There will be a lump sum wage payment equal to two percent (2%) of gross earnings for the prior fifty-two (52) week period ending June 3, 2007, to be paid to all eligible employees on the seniority list by June 25, 2007.
28.2 COLA
1. PAYOUT OF COLA - All accumulated COLA through June 5, 2005 will be paid out to eligible employees by June 17, 2005.
2. Further COLA is eliminated from the Contract.
28.3 RATE SCHEDULE AND CLASSIFICATIONS - The rates and classifications at Formsprag are shown on Schedule 2005. Effective June 6, 2005 the schedule will be recomputed showing four years from minimum to maximum. New rates to be effective for all work performed on or after June 6, 2005.
Article 29 - TRANSFER OF AGREEMENT
29.1 This Agreement shall be binding upon the Company and/or the Union successors, assigns or transferees.
Article 30 - SEPARABILITY CLAUSE
30.1 In the event that any of the provisions of this Agreement shall be or become invalid or unenforceable by reasons of any Federal or State Law or Executive Order now existing or hereafter enacted, such invalidity or unenforceability shall not affect the remainder of the provisions of this Agreement. In addition, the parties may agree upon a replacement from the affected provision(s). Such replacement provision(s) shall become effective immediately upon agreement of the parties, without the need for further ratification by the Union membership, and shall remain in effect for the duration of this Agreement.
Article 31 - TERMINATION
31.1 The foregoing constitutes an agreement between the Company and the Union. It is to become effective June 6, 2005, the date of the Monday following ratification and to continue in effect until 12:01 a.m., June 2, 2008. If either party desires to modify, amend, or terminate the Agreement, it shall give at least sixty (60) days written notice to the other party before 12:01 a.m., June 2, 2008.
31.2 If neither party serves notice of modification, amendment, or termination,
the Agreement shall continue beyond 12:01 a.m., June 2, 2008, subject to sixty
(60) days written notice of modification, amendment, or termination.
31.3 This Agreement replaces all Company agreements, supplements, and amendments.
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
30.4 In witness whereof, the parties have on the 6th day of June, 2005, caused this Agreement to be signed by their duly authorized representatives.
FOR THE UNION: FOR THE COMPANY: ------------------------------------- ---------------------------------------- Bob Hecker David Ebling VP - UAW Local 155 General Manager ------------------------------------- ---------------------------------------- Dennis Krol Tim McGowan Plant Chairman VP - Human Resources ------------------------------------- ---------------------------------------- Clay Farley Ed Novotny Committeeman VP - Operations ------------------------------------- ---------------------------------------- Ralph Thomas Gary Simpler Committeeman Shawe & Rosenthal, LLP ---------------------------------------- Kirby Smith Mgr - Human Resources ---------------------------------------- Donna Packer Mgr - Human Resources ---------------------------------------- David Meeker Finance Mgr. |
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
LETTER NO. 1
June 6, 2005
To: Mr. Bob Hecker
and Formsprag Bargaining Committee
Re: Equal Opportunity Program
Dear Mr. Hecker:
All employees are encouraged to contribute and grow to the limit of their desire and ability by the use of the Company training and education programs, and tuition assistance programs which are to be administered without regard to race, religion, color, sex, age, national origin, disabled veterans, veterans of the Vietnam era, or certified physical or mental disability.
Recruitment of new employees is to be conducted in a manner to assure full equal employment opportunities, and all decisions on employment are to be based on this principle of equal employment opportunity.
As new developments take place regarding equal employment matters, the information will be communicated to all local management and union bargaining committees and our employees as rapidly as possible.
We agree to review and discuss ways and means of encouraging employees and grievance representatives to use the grievance and arbitration procedure as the exclusive contractual method to resolve claims of denial of equal application rights.
Sincerely,
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
LETTER NO. 2
June 6, 2005
To: Mr. Bob Hecker and
Formsprag Bargaining Committee
Re: Working Hours
Dear Mr. Hecker:
The Company was asked to provide the Union, in writing, with its negotiations positions regarding starting and quitting times, break times, wash-up times, and lunch period.
The Company intends to continue the schedule shown for the life of the Agreement.
Should business conditions or Government regulations change, however, which make rearrangement of the times necessary in the Company's opinion, the Union will be advised of the change in advance of the effective date.
The amount of time permitted is as follows:
Breaks 10 minutes - A.M. 10 minutes - P.M. Total 20 minutes Wash-up (before lunch) 5 minutes - A.M. (before shift end) 5 minutes - P.M. Total 10 minutes |
The present work schedule is as follows:
Day Shift Afternoon Shift Midnight Shift --------- --------------- -------------- Starting Time 6:30 a.m. 3:00 p.m. 10:30 p.m. Morning Break 9:20 - 9:30 a.m. 5:20 - 5:30 p.m. 1:20 - 1:30 a.m. Unpaid Lunch 11:00 - 11:30 a.m. 7:30 - 8:00 p.m. 3:00 - 3:30 a.m. Afternoon Break 1:20 - 1:30 p.m. 10:00 - 10:10 p.m. 5:20 - 5:30 a.m. Quitting Time 3:00 p.m. 11:30 p.m. 7:00 a.m. |
Sincerely,
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
LETTER NO. 3
June 6, 2005
To: Mr. Bob Hecker and
Formsprag Plant Bargaining Committee
Subject: Combination or Elimination of Classifications
Dear Mr. Hecker:
It appears that efforts toward combining classifications and tasks provide benefits to both the employees and the Company. Therefore, we consider it mutually advantageous to continue these efforts and discussions during the course of the new contract period.
Specifically when classifications become vacant, we have agreed to meet with you and discuss their combination or elimination.
This agreement to discuss does not change any rights that the Company now has under the current Labor Agreement to combine or eliminate classifications.
This will confirm our mutual understanding that if classifications are combined in the future, the relative seniority positions in the new classification will reflect the actual classification seniority held by the effected employees prior to the combination.
We further agree to review with you any combinations of classifications which occurred in the preceding Labor Agreement and make appropriate adjustments to assure that classification seniority is determined in the manner described above.
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
LETTER NO. 4
June 6, 2005
To: Mr. Bob Hecker
and Formsprag Bargaining Committee
Re: Holiday Pay and Disciplinary Suspension
Dear Mr. Hecker:
This will confirm that for the life of this Agreement, the Company will continue its policy of not affecting an employee's holiday pay entitlement as a result of a disciplinary suspension.
Sincerely,
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
LETTER NO. 5
June 6, 2005
To: Mr. Bob Hecker and
Formsprag Bargaining Committee
Subject: Notice of Plant Closing and Severance Pay
Dear Mr. Hecker:
Should it become necessary to discontinue the Formsprag Clutch operation, the Company will give the Union a minimum of six (6) months advance notice.
In addition, the Company will provide severance pay to eligible employees affected by such a closing as follows:
1. Employees who are on the active payroll at the time notice of plant closure is given to the Union, or at any time between such notice and the date of plant closure, will receive severance benefits equal to three months (13 weeks) pay at the employee's base rate.
2. Employees hired by the Company on or after December 3, 2001 are not eligible for severance benefits.
3. In order to receive severance benefits, eligible employees must remain employed by the Company until such time as they are released by the Company due to the cessation of operations.
Sincerely,
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
ADDENDUM NO. 1
Employee co-pay will be as shown or the indicated percentage, whichever is lower.
ANTHEM BC/BS RATES
Assumes 15.0% annual healthcare rate increase
YR1 -EFF. 6-6-05 YR2- EFF, 6-5-06 YR3 - EFF. 6-4-07 ---------------- ---------------- ----------------- SINGLE TOTAL MO. PREMIUM $ 384.20 $ 441.83 $ 508.10 YOUR CO-PAY MONTHLY $ 76.84 $ 110.46 $ 127.03 YOUR CO-PAY WEEKLY $ 17.73 $ 25.49 $ 29.31 YOUR % CO-PAY 20.0% 25.0% 25.0% COUPLE TOTAL MO. PREMIUM $ 768.42 $ 883.68 $1,016.24 YOUR CO-PAY MONTHLY $ 153.68 $ 220.92 $ 254.06 YOUR CO-PAY WEEKLY $ 35.47 $ 50.98 $ 58.63 YOUR % CO-PAY 20.0% 25.0% 25.0% FAMILY TOTAL MO. PREMIUM $1,114.23 $1,281.36 $1,473.57 YOUR CO-PAY MONTHLY $ 222.85 $ 320.34 $ 368.39 YOUR CO-PAY WEEKLY $ 51.43 $ 73.92 $ 85.01 YOUR % CO-PAY 20.0% 25.0% 25.0% |
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
ADDENDUM NO. 2
Employee co-pay will be as shown or the indicated percentage, whichever is lower.
HEALTH ALLIANCE PLAN
Assumes 15.0% annual healthcare rate increase
Yr1 -eff. 6-6-05 Yr2- eff, 6-5-06 Yr3 - eff. 6-4-07 ---------------- ---------------- ----------------- SINGLE TOTAL MO. PREMIUM $334.10 $384.22 $ 441.85 YOUR CO-PAY MONTHLY $ 66.82 $ 96.05 $ 110.46 YOUR CO-PAY WEEKLY $ 15.42 $ 22.17 $ 25.49 YOUR % CO-PAY 20.0% 25.0% 25.0% COUPLE TOTAL MO. PREMIUM $768.43 $883.69 $1,016.25 YOUR CO-PAY MONTHLY $153.69 $220.92 $ 254.06 YOUR CO-PAY WEEKLY $ 35.47 $ 50.98 $ 58.63 YOUR % CO-PAY 20.0% 25.0% 25.0% FAMILY TOTAL MO. PREMIUM $868.85 $999.18 $1,149.05 YOUR CO-PAY MONTHLY $173.77 $249.79 $ 287.26 YOUR CO-PAY WEEKLY $ 40.10 $ 57.64 $ 66.29 YOUR % CO-PAY 20.0% 25.0% 25.0% |
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
JANUARY 2005 FEBRUARY 2005 MARCH 2005 -------------------- ---------------------- -------------------- Su Mo Tu We Th Fr Sa Su Mo Tu We Th Fr Sa Su Mo Tu We Th Fr Sa 1 1 2 3 4 5 1 2 3 4 5 2 3 4 5 6 7 8 6 7 8 9 10 11 12 6 7 8 9 10 11 12 9 10 11 12 13 14 15 13 14 15 16 17 18 19 13 14 15 16 17 18 19 16 17 18 19 20 21 22 20 21 22 23 24 25 26 20 21 22 23 24 25 26 23 24 25 26 27 28 29 27 28 27 28 29 30 31 30 31 3:graphic. 10:graphic. 2:graphic. 8:graphic. 3:graphic. 10:graphic. 17:graphic. 25:graphic. 15:graphic. 24:graphic. 17:graphic. 25:graphic. |
APRIL 2005 MAY 2005 JUNE 2005 -------------------- ---------------------- -------------------- Su Mo Tu We Th Fr Sa Su Mo Tu We Th Fr Sa Su Mo Tu We Th Fr Sa 1 2 1 2 3 4 5 6 7 1 2 3 4 3 4 5 6 7 8 9 8 9 10 11 12 13 14 5 6 7 8 9 10 11 10 11 12 13 14 15 16 15 16 17 18 19 20 21 12 13 14 15 16 17 18 17 18 19 20 21 22 23 22 23 24 25 26 27 28 19 20 21 22 23 24 25 24 25 26 27 28 29 30 29 30 31 26 27 28 29 30 2:graphic. 8:graphic. 1:graphic. 8:graphic. 6:graphic. 15:graphic. 16:graphic. 24:graphic. 16:graphic. 23:graphic. 22:graphic. 28:graphic. 30:graphic. |
JULY 2005 AUGUST 2005 SEPTEMBER 2005 -------------------- ---------------------- -------------------- Su Mo Tu We Th Fr Sa Su Mo Tu We Th Fr Sa Su Mo Tu We Th Fr Sa 1 2 1 2 3 4 5 6 1 2 3 3 4 5 6 7 8 9 7 8 9 10 11 12 13 4 5 6 7 8 9 10 10 11 12 13 14 15 16 14 15 16 17 18 19 20 11 12 13 14 15 16 17 17 18 19 20 21 22 23 21 22 23 24 25 26 27 18 19 20 21 22 23 24 24 25 26 27 28 29 30 28 29 30 31 25 26 27 28 29 30 31 6:graphic. 14:graphic. 5:graphic. 13:graphic. 3:graphic. 11:graphic. 21:graphic. 28:graphic. 19:graphic. 26:graphic. 18:graphic. 25:graphic. |
OCTOBER 2005 NOVEMBER 2005 DECEMBER 2005 -------------------- ---------------------- -------------------- Su Mo Tu We Th Fr Sa Su Mo Tu We Th Fr Sa Su Mo Tu We Th Fr Sa 1 1 2 3 4 5 1 2 3 2 3 4 5 6 7 8 6 7 8 9 10 11 12 4 5 6 7 8 9 10 9 10 11 12 13 14 15 13 14 15 16 17 18 19 11 12 13 14 15 16 17 16 17 18 19 20 21 22 20 21 22 23 24 25 26 18 19 20 21 22 23 24 23 24 25 26 27 28 29 27 28 29 30 25 26 27 28 29 30 31 30 31 3:graphic. 10:graphic. 2:graphic. 9:graphic. 1:graphic. 8:graphic. 17:graphic. 25:graphic. 16:graphic. 23:graphic. 15:graphic. 23:graphic. 31:graphic. |
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
JANUARY 2006 FEBRUARY 2006 MARCH 2006 -------------------- ---------------------- -------------------- Su Mo Tu We Th Fr Sa Su Mo Tu We Th Fr Sa Su Mo Tu We Th Fr Sa 1 2 3 4 5 6 7 1 2 3 4 1 2 3 4 8 9 10 11 12 13 14 5 6 7 8 9 10 11 5 6 7 8 9 10 11 15 16 17 18 19 20 21 12 13 14 15 16 17 18 12 13 14 15 16 17 18 22 23 24 25 26 27 28 19 20 21 22 23 24 25 19 20 21 22 23 24 25 29 30 31 26 27 28 26 27 28 29 30 31 6:graphic. 14:graphic. 5:graphic. 13:graphic. 6:graphic. 14:graphic. 22:graphic. 29:graphic. 21:graphic. 28:graphic. 22:graphic. 29:graphic. |
APRIL 2006 MAY 2006 JUNE 2006 -------------------- ---------------------- -------------------- Su Mo Tu We Th Fr Sa Su Mo Tu We Th Fr Sa Su Mo Tu We Th Fr Sa 1 1 2 3 4 5 6 1 2 3 2 3 4 5 6 7 8 7 8 9 10 11 12 13 4 5 6 7 8 9 10 9 10 11 12 13 14 15 14 15 16 17 18 19 20 11 12 13 14 15 16 17 16 17 18 19 20 21 22 21 22 23 24 25 26 27 18 19 20 21 22 23 24 23 24 25 26 27 28 29 28 29 30 31 25 26 27 28 29 30 30 5:graphic. 13:graphic. 5:graphic. 13:graphic. 3:graphic. 11:graphic. 21:graphic. 27:graphic. 20:graphic. 27:graphic. 18:graphic. 25:graphic. |
JULY 2006 AUGUST 2006 SEPTEMBER 2006 -------------------- ---------------------- -------------------- Su Mo Tu We Th Fr Sa Su Mo Tu We Th Fr Sa Su Mo Tu We Th Fr Sa 1 1 2 3 4 5 1 2 2 3 4 5 6 7 8 6 7 8 9 10 11 12 3 4 5 6 7 8 9 9 10 11 12 13 14 15 13 14 15 16 17 18 19 10 11 12 13 14 15 16 16 17 18 19 20 21 22 20 21 22 23 24 25 26 17 18 19 20 21 22 23 23 24 25 26 27 28 29 27 28 29 30 31 24 25 26 27 28 29 30 30 31 3:graphic. 11:graphic. 2:graphic. 9:graphic. 7:graphic. 14:graphic. 17:graphic. 25:graphic. 16:graphic. 23:graphic. 22:graphic. 30:graphic. 31:graphic. |
OCTOBER 2006 NOVEMBER 2006 DECEMBER 2006 -------------------- ---------------------- -------------------- Su Mo Tu We Th Fr Sa Su Mo Tu We Th Fr Sa Su Mo Tu We Th Fr Sa 1 2 3 4 5 6 7 1 2 3 4 1 2 8 9 10 11 12 13 14 5 6 7 8 9 10 11 3 4 5 6 7 8 9 15 16 17 18 19 20 21 12 13 14 15 16 17 18 10 11 12 13 14 15 16 22 23 24 25 26 27 28 19 20 21 22 23 24 25 17 18 19 20 21 22 23 29 30 31 26 27 28 29 30 24 25 26 27 28 29 30 31 7:graphic. 14:graphic. 5:graphic. 12:graphic. 5:graphic. 12:graphic. 22:graphic. 29:graphic. 20:graphic. 28:graphic. 20:graphic. 27:graphic. |
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
JANUARY 2007 FEBRUARY 2007 MARCH 2007 -------------------- ---------------------- -------------------- Su Mo Tu We Th Fr Sa Su Mo Tu We Th Fr Sa Su Mo Tu We Th Fr Sa 1 2 3 4 5 6 1 2 3 1 2 3 7 8 9 10 11 12 13 4 5 6 7 8 9 10 4 5 6 7 8 9 10 14 15 16 17 18 19 20 11 12 13 14 15 16 17 11 12 13 14 15 16 17 21 22 23 24 25 26 27 18 19 20 21 22 23 24 18 19 20 21 22 23 24 28 29 30 31 25 26 27 28 25 26 27 28 29 30 31 3:graphic. 11:graphic. 2:graphic. 10:graphic. 3:graphic. 12:graphic. 19:graphic. 25:graphic. 17:graphic. 24:graphic. 19:graphic. 25:graphic. |
APRIL 2007 MAY 2007 JUNE 2007 -------------------- ---------------------- -------------------- Su Mo Tu We Th Fr Sa Su Mo Tu We Th Fr Sa Su Mo Tu We Th Fr Sa 1 2 3 4 5 6 7 1 2 3 4 5 1 2 8 9 10 11 12 13 14 6 7 8 9 10 11 12 3 4 5 6 7 8 9 15 16 17 18 19 20 21 13 14 15 16 17 18 19 10 11 12 13 14 15 16 22 23 24 25 26 27 28 20 21 22 23 24 25 26 17 18 19 20 21 22 23 29 30 27 28 29 30 31 24 25 26 27 28 29 30 2:graphic. 10:graphic. 2:graphic. 10:graphic. 1:graphic. 8:graphic. 17:graphic. 24:graphic. 16:graphic. 23:graphic. 15:graphic. 22:graphic. 30:graphic. |
JULY 2007 AUGUST 2007 SEPTEMBER 2007 -------------------- ---------------------- -------------------- Su Mo Tu We Th Fr Sa Su Mo Tu We Th Fr Sa Su Mo Tu We Th Fr Sa 1 2 3 4 5 6 7 1 2 3 4 1 8 9 10 11 12 13 14 5 6 7 8 9 10 11 2 3 4 5 6 7 8 15 16 17 18 19 20 21 12 13 14 15 16 17 18 9 10 11 12 13 14 15 22 23 24 25 26 27 28 19 20 21 22 23 24 25 16 17 18 19 20 21 22 29 30 31 26 27 28 29 30 31 23 24 25 26 27 28 29 30 7:graphic. 14:graphic. 5:graphic. 12:graphic. 4:graphic. 11:graphic. 22:graphic. 30:graphic. 20:graphic. 28:graphic. 19:graphic. 26:graphic. |
OCTOBER 2007 NOVEMBER 2007 DECEMBER 2007 -------------------- ---------------------- -------------------- Su Mo Tu We Th Fr Sa Su Mo Tu We Th Fr Sa Su Mo Tu We Th Fr Sa 1 2 3 4 5 6 1 2 3 1 7 8 9 10 11 12 13 4 5 6 7 8 9 10 2 3 4 5 6 7 8 14 15 16 17 18 19 20 11 12 13 14 15 16 17 9 10 11 12 13 14 15 21 22 23 24 25 26 27 18 19 20 21 22 23 24 16 17 18 19 20 21 22 28 29 30 31 25 26 27 28 29 30 23 24 25 26 27 28 29 30 31 3:graphic. 11:graphic. 1:graphic. 9:graphic. 1:graphic. 9:graphic. 19:graphic. 26:graphic. 17:graphic. 24:graphic. 17:graphic. 24:graphic. 31:graphic. |
FORMSPRAG LLC AND UAW LOCAL 155-LABOR AGREEMENT EXPIRES 12:01 A.M. JUNE 2, 2008
JANUARY 2008 FEBRUARY 2008 MARCH 2008 -------------------- ---------------------- -------------------- Su Mo Tu We Th Fr Sa Su Mo Tu We Th Fr Sa Su Mo Tu We Th Fr Sa 1 2 3 4 5 1 2 1 6 7 8 9 10 11 12 3 4 5 6 7 8 9 2 3 4 5 6 7 8 13 14 15 16 17 18 19 10 11 12 13 14 15 16 9 10 11 12 13 14 15 20 21 22 23 24 25 26 17 18 19 20 21 22 23 16 17 18 19 20 21 22 27 28 29 30 31 24 25 26 27 28 29 23 24 25 26 27 28 29 30 31 8:graphic. 15:graphic. 7:graphic. 14:graphic. 7:graphic. 14:graphic. 22:graphic. 30:graphic. 21:graphic. 29:graphic. 21:graphic. 29:graphic. |
APRIL 2008 MAY 2008 JUNE 2008 -------------------- ---------------------- -------------------- Su Mo Tu We Th Fr Sa Su Mo Tu We Th Fr Sa Su Mo Tu We Th Fr Sa 1 2 3 4 5 1 2 3 1 2 3 4 5 6 7 6 7 8 9 10 11 12 4 5 6 7 8 9 10 8 9 10 11 12 13 14 13 14 15 16 17 18 19 11 12 13 14 15 16 17 15 16 17 18 19 20 21 20 21 22 23 24 25 26 18 19 20 21 22 23 24 22 23 24 25 26 27 28 27 28 29 30 25 26 27 28 29 30 31 29 30 6:graphic. 12:graphic. 5:graphic. 12:graphic. 3:graphic. 10:graphic. 20:graphic. 28:graphic. 20:graphic. 28:graphic. 18:graphic. 26:graphic. |
JULY 2008 AUGUST 2008 SEPTEMBER 2008 -------------------- ---------------------- -------------------- Su Mo Tu We Th Fr Sa Su Mo Tu We Th Fr Sa Su Mo Tu We Th Fr Sa 1 2 3 4 5 1 2 1 2 3 4 5 6 6 7 8 9 10 11 12 3 4 5 6 7 8 9 7 8 9 10 11 12 13 13 14 15 16 17 18 19 10 11 12 13 14 15 16 14 15 16 17 18 19 20 20 21 22 23 24 25 26 17 18 19 20 21 22 23 21 22 23 24 25 26 27 27 28 29 30 31 24 25 26 27 28 29 30 28 29 30 31 3:graphic. 10:graphic. 1:graphic. 8:graphic. 7:graphic. 15:graphic. 18:graphic. 25:graphic. 16:graphic. 24:graphic. 22:graphic. 29:graphic. 30:graphic. |
OCTOBER 2008 NOVEMBER 2008 DECEMBER 2008 -------------------- ---------------------- -------------------- Su Mo Tu We Th Fr Sa Su Mo Tu We Th Fr Sa Su Mo Tu We Th Fr Sa 1 2 3 4 1 1 2 3 4 5 6 5 6 7 8 9 10 11 2 3 4 5 6 7 8 7 8 9 10 11 12 13 12 13 14 15 16 17 18 9 10 11 12 13 14 15 14 15 16 17 18 19 20 19 20 21 22 23 24 25 16 17 18 19 20 21 22 21 22 23 24 25 26 27 26 27 28 29 30 31 23 24 25 26 27 28 29 28 29 30 31 30 7:graphic. 14:graphic. 6:graphic. 13:graphic. 5:graphic. 12:graphic. 21:graphic. 28:graphic. 19:graphic. 27:graphic. 19:graphic. 27:graphic. |
EXHIBIT 10.14
AMENDMENT TO THE
ALTRA HOLDINGS, INC.
2004 EQUITY INCENTIVE PLAN
THIS AMENDMENT (this "Amendment") is entered into effective as of August 30, 2006, to amend that certain 2004 Equity Incentive Plan (the "Plan") of Altra Holdings, Inc., a Delaware Corporation (the "Company").
RECITALS
A. WHEREAS, the Board of Directors of the Company (the "Board") desires to amend the Plan to increase the aggregate number of shares of the Company's common stock available for issuance as restricted stock awards under the Plan by 500,000 shares; and
B. WHEREAS, the Board desires to modify the definition of a Change of Control under the plan to clarify that the beneficial ownership threshold shall not apply to ownership of the Company's shares by Genstar Capital, L.P. and its affiliates;
AMENDMENT
1. Definitions. Capitalized terms not otherwise defined in this Amendment have the meaning given them in the Plan.
2. Amendment of the Plan. Effective upon the date hereof, the Plan is amended as follows:
2.1. Amendment of Section 5(a). Section 5(a) of the Plan is amended to read in its entirety as follows:
"(a) Maximum Shares. The aggregate number of shares of common stock of the Company par value $0.001 ("Shares") that may be issued under this Plan shall be Four Million Five Hundred Thousand (4,500,000) Shares, which may be authorized and unissued or treasury Shares, subject to Section 5(c) hereof and Section 13 hereof ("Maximum Shares"). The maximum number of shares that may be "incentive stock options", within the meaning of Section 422 of the Code, is 3,500,000 shares (the "ISO Maximum"). The maximum number of shares that may be any type of stock option under the plan shall be 4,000,000 shares."
2.2. Amendment of Section 13(d)(i). Section 13(d)(i) of the Plan is amended to read in its entirety as follows:
"(i) Any person(s) acting together which would constitute a "group" for purposes of Section 13(d) of the Exchange Act (other than the Company or any subsidiary) shall "beneficially own" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, at least 25% of the total voting power of all classes of capital stock of the Company entitled
to vote generally in the election of the Board, other than any such ownership by Genstar Capital, L.P. or its affiliates;"
3. No Other Amendments. Except as modified by Section 2 above, the Plan shall continue in full force and effect.
4. Governing Law. This Amendment and any claims related to the subject matter hereof shall be governed by and construed in accordance with the laws of the State of Delaware (regardless of the law that might otherwise govern under applicable Delaware principles of conflict of laws).
EXHIBIT 10.16
SUBSCRIPTION AGREEMENT
This Subscription Agreement (this "AGREEMENT") is made and entered into as of November 30, 2004, by and among each of the persons set forth on Schedule I hereto (collectively, the "PREFERRED PURCHASERS," and each, a "PREFERRED PURCHASER"), each of the persons set forth on Schedule II hereto (collectively, the "COMMON PURCHASERS," and each, a "COMMON PURCHASER"; collectively together with the Preferred Purchasers, the "PURCHASERS," and each, a "PURCHASER") and Altra Holdings, Inc., a Delaware corporation formerly known as CPT Acquisition Corp. (the "COMPANY").
RECITALS
WHEREAS, on or about the date hereof, Altra Industrial Motion, Inc., a Delaware corporation and a wholly owned subsidiary of the Company ("ALTRA"), is purchasing, directly and indirectly (the "ACQUISITION"), all of the issued and outstanding limited liability company interests of Power Transmission Holding LLC, a Delaware limited liability company, pursuant to an LLC Purchase Agreement dated as of October 25, 2004 (the "PURCHASE AGREEMENT"), by and among the Company, Warner Electric Holding, a Delaware corporation, and Colfax Corporation, a Delaware corporation;
WHEREAS, subject to the terms and conditions of this Agreement, each Preferred Purchaser is willing to purchase, and the Company is willing to issue and sell to such Preferred Purchaser, the number of shares of Series A Preferred Stock, par value $0.001 per share, of the Company (the "PREFERRED STOCK") set forth opposite the name of such Preferred Purchaser on Schedule I hereto, having the rights, preferences, powers and privileges set forth in the form of Amended and Restated Certificate of Incorporation attached hereto as Exhibit A (the "AMENDED AND RESTATED CERTIFICATE OF INCORPORATION");
WHEREAS, subject to the terms and conditions of this Agreement, each Common Purchaser is willing to purchase, and the Company is willing to issue and sell to such Common Purchaser, the number of shares of Common Stock, par value $0.001 per share, of the Company (the "COMMON STOCK") set forth opposite the name of such Common Purchaser on Schedule II hereto, having the rights, preferences, powers and privileges set forth in the form of Amended and Restated Certificate of Incorporation;
WHEREAS, such shares of Common Stock shall be issued and sold in exchange for restricted common stock of The Kilian Company, a Delaware corporation ("KILIAN"), and shall be subject to vesting restrictions corresponding to the vesting restrictions applicable to the restricted common stock of Kilian being exchanged therefor;
WHEREAS, the Company and the Purchasers intend that the transactions contemplated by this Agreement shall be governed by Section 351 of the Internal Revenue Code of 1986, as amended (the "CODE"); and
WHEREAS, it is anticipated that on or about the date hereof, (i) the
Acquisition, as contemplated in the Purchase Agreement, will be consummated and
(iii) the Company and the Purchasers will enter into a Stockholders Agreement
substantially in the form attached hereto as
Exhibit B (the "STOCKHOLDERS AGREEMENT") and a Registration Rights Agreement substantially in the form attached hereto as Exhibit C (the "REGISTRATION RIGHTS AGREEMENT");
AGREEMENT
NOW THEREFORE, in consideration of the foregoing, and the representations, warranties, covenants and conditions set forth below, the parties hereto hereby agree as follows:
1. Purchase of Securities.
(a) Purchase of Securities. Subject to the terms and conditions of this Agreement, (i) each Preferred Purchaser hereby agrees, severally and not jointly, to purchase from the Company, and the Company hereby agrees to issue and sell to each Preferred Purchaser, the number of shares of the Preferred Stock set forth opposite the name of such Preferred Purchaser on Schedule I hereto at the purchase price therefor set forth on Schedule I and (ii) each Common Purchaser hereby agrees, severally and not jointly, to purchase from the Company, and the Company hereby agrees to issue and sell to each Common Purchaser, the number of shares of Common Stock set forth opposite the name of such Common Purchaser on Schedule II hereto at the purchase price therefor set forth on Schedule II. The shares of Preferred Stock issued and sold to the Preferred Purchasers hereunder are referred to in this Agreement as the "PREFERRED SHARES" and the shares of Common Stock issued and sold to the Common Purchasers hereunder are referred to in this Agreement as the "COMMON SHARES" (the Common Shares, together with the Preferred Shares, are collectively referred to herein as the "SECURITIES"). The purchase price for the Securities is referred to as the "PURCHASE PRICE." The shares of common stock of the Company issuable upon conversion of the Preferred Shares are referred to as the "CONVERSION SHARES."
(b) Delivery of Funds and Certificates. The closing of the purchase and sale of the Securities (the "CLOSING") shall take place at a time and place to be designated by the Company on at least 24 hours notice. At the Closing, the Company will deliver to each Purchaser a duly executed stock certificate, registered in such Purchaser's name and representing the Securities to be issued and sold to such Purchaser, against payment of the applicable Purchase Price therefor (i) to the extent set forth on Schedule I, by wire transfer of immediately available funds in the amount of the Purchase Price representing payment in full for such Preferred Shares to an account or accounts designated by the Company, (ii) to the extent set forth on Schedule I, by tendering the number of shares of preferred stock of Kilian (the "KILIAN PREFERRED STOCK") set forth opposite the name of such Purchaser on Schedule I, which shares of Kilian Preferred Stock have been deemed by the board of directors of the Company (the "BOARD") to have a fair market value on the date hereof equal to the respective amounts set forth in Schedule I or (iii) to the extent set forth on Schedule II, by tendering the number of shares of common stock of Kilian (the "KILIAN COMMON STOCK" and, together with the Kilian Preferred Stock, the "KILIAN Stock"), set forth opposite the name of such Purchaser on Schedule II, which shares of Kilian Common Stock have been deemed by the Board to have a fair market value on the date hereof equal to the respective amounts set forth in Schedule II. Any such Common Shares issued under clause (iii) shall be subject to vesting restrictions corresponding in vesting amounts and periods (but having identical vesting commencement dates) as those vesting restrictions that are applicable immediately prior to the Closing to the Kilian Common Stock
exchanged therefor, as determined in the reasonable good faith judgment of the
Board (the "VESTING RESTRICTIONS").
2. Representations and Warranties of the Company. The Company represents and warrants to each Purchaser that:
(a) Organization and Standing. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has the requisite corporate power and authority to carry on its business as now conducted and as proposed to be conducted. The Company is duly qualified to transact business in each jurisdiction in which the character of its business makes such qualification necessary, except where the failure to be so qualified would not have a material adverse effect on the business operations or financial condition of the Company.
(b) Authorization. The Company has the requisite corporate power and
authority to execute and deliver this Agreement, the Stockholders Agreement and
the Registration Rights Agreement and to perform its obligations hereunder and
thereunder. All corporate action on the part of the Company necessary for (i)
the authorization, execution, delivery and performance by the Company of this
Agreement, the Stockholders Agreement and the Registration Rights Agreement and
(ii) for the authorization, issuance and delivery by the Company of the
Securities (including the Conversion Shares) being sold under this Agreement,
has been taken.
(c) Binding Obligation. This Agreement has been, and on or before the Closing the Stockholders Agreement and the Registration Rights Agreement will be, duly authorized, executed and delivered by the Company and this Agreement is, and on and after the Closing the Stockholders Agreement and the Registration Rights Agreement will be, the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with the terms hereof, subject to: (i) the effect of bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, fraudulent transfer, preferential transfer or distribution laws and other similar laws now or hereafter in effect relating to or affecting the rights of creditors generally; and (ii) the effect of (A) general principles of equity, including without limitation concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability of specific performance or injunctive relief, regardless of whether considered in a proceeding in equity or at law, and (B) the discretion of any court in which an action is brought.
(d) Non-Contravention. The execution and delivery by the Company of
this Agreement, the Stockholders Agreement and the Registration Rights
Agreement, the performance by the Company of its obligations under this
Agreement, the Stockholders Agreement and the Registration Rights Agreement and
the consummation by the Company of the transactions contemplated hereby and
thereby will not conflict with or result in any violation of or default under
(i) any provisions of the Amended and Restated Certificate of Incorporation or
Bylaws of the Company, each as amended and currently in effect, (ii) any
provision of any agreement or other instrument to which the Company is a party
or by which the Company or any of its properties are bound, or (iii) all
applicable material statutes, laws, regulations and executive orders of the
United States (including, without limitation, any administrative or
regulatory body thereof) and all states, countries and municipalities having jurisdiction over the Company's business, properties or assets.
(e) Capitalization. The authorized capital of the Company will, immediately prior to the Closing, consist of:
(1) Preferred Stock. Forty Million (40,000,000) shares of preferred stock, consisting of Forty Million (40,000,000) shares designated Series A Preferred Stock, none of which are issued and outstanding and up to 36,000,000 of which may be sold at the Closing. The rights, preferences, powers and privileges of the Preferred Stock are as stated in the Amended and Restated Certificate of Incorporation.
(2) Common Stock. Fifty Million (50,000,000) shares of Common Stock, none of which are issued and outstanding.
(3) Equity Plan. The Company has reserved Four Million (4,000,000) shares of its Common Stock for issuance pursuant to the Company's 2004 Equity Incentive Plan (the "EQUITY PLAN").
(f) Validity of Securities. The Securities, when issued, sold and delivered in accordance with the terms of this Agreement, shall be duly and validly issued, fully paid and nonassessable, and free and clear of all liens and encumbrances (except, in the case of Common Shares, the Vesting Restrictions). The Conversion Shares have been duly and validly reserved for issuance and, upon issuance in accordance with the terms of the Amended and Restated Certificate of Incorporation, will be duly and validly issued, fully paid and nonassessable.
(g) Securities Act. The sale of the Securities in accordance with the terms of this Agreement (assuming the accuracy of the representations and warranties of the Purchasers set forth in Section 3 hereof) is, and the issuance of the Conversion Shares upon conversion of the Securities will be, exempt from the registration requirements of the Securities Act of 1933, as amended (the "1933 ACT").
(h) Liabilities. The Company is not in default under any order, writ, injunction or decree of any federal, state or local court, department or agency directed against the Company. The Company is not in breach of any of the terms, conditions or provisions of, or in default under, any indenture, mortgage, deed of trust, credit agreement, note or other evidence of indebtedness, or any lease or other agreement, or any license, permit, franchise or certificate, to which it is a party or by which it is bound or to which any of its properties are subject, which breach or default would materially adversely affect the business or financial condition of the Company or impair its ability to carry out any of its obligations under this Agreement, the Stockholders Agreement or the Registration Rights Agreement.
(i) Litigation. There is no legal action, suit, arbitration or governmental proceeding pending or, to the Company's knowledge, threatened against the Company.
(j) Rights to Acquire Capital Stock or other Voting Securities. Except
for (i) the conversion privileges of the Preferred Stock, (ii) the Four Million
(4,000,000) shares of Common Stock issued or issuable pursuant to the Plan,
(iii) the Vesting Restrictions applicable
to the Common Shares, and (iv) the preemptive rights, rights of first refusal and co-sale rights set forth in the Stockholders Agreement, there are not authorized or outstanding any options, warrants, phantom stock, stock appreciation or similar rights (including, without limitation, conversion or preemptive rights) or agreements or arrangements for the issuance by the Company or the purchase or acquisition from or by the Company of any shares of its capital stock or other voting securities or any securities convertible into or exchangeable or exercisable for any shares of the Company's capital stock or other voting securities. Except for the Stockholders Agreement, the Company is not a party to any voting trust or voting agreement with respect to the voting, redemption, sale, transfer or other disposition of the capital stock of the Company.
(k) No Breach. The Company has not received actual notice of any breach of any representation or warranty of the Seller (as that term is defined in the Purchase Agreement) contained in the Purchase Agreement.
(l) Operations. Since the date of its incorporation the Company has not engaged in any operations other than in connection with or as contemplated by this Agreement and as set forth in final offering circular, dated November 22, 2004, as amended and supplemented, delivered to investors in connection with the issuance by Altra of its 9% Senior Secured Notes due 2011 (the "OFFERING CIRCULAR").
3. Representations and Warranties of the Purchasers. Each Purchaser individually (but not on behalf of any other Purchaser) represents and warrants that:
(a) Authority and Binding Obligation. Such Purchaser has the requisite legal capacity, power and authority to execute and deliver this Agreement, the Stockholders Agreement and the Registration Rights Agreement and to perform its obligations hereunder and thereunder. This Agreement has been, and on or before the Closing the Stockholders Agreement and the Registration Rights Agreement will be, duly authorized, executed and delivered by such Purchaser and this Agreement is, and on and after the Closing the Stockholders Agreement and the Registration Rights Agreement will be, the legal, valid and binding obligation of such Purchaser, enforceable against such Purchaser in accordance with the terms hereof and thereof, subject to (i) the effect of bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, fraudulent transfer, preferential transfer or distribution laws and other similar laws now or hereafter in effect relating to or affecting the rights of creditors generally; and (ii) the effect of (A) general principles of equity, including without limitation concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability of specific performance or injunctive relief, regardless of whether considered in a proceeding in equity or at law and (B) the discretion of any court in which an action is brought.
(b) Registration. Such Purchaser has been advised that the Securities and the Conversion Shares have not been registered under the 1933 Act or any state securities laws and, therefore, cannot be resold unless they are registered under the Securities Act and applicable state securities laws or unless an exemption from such registration requirements are available. Such Purchaser is purchasing the Securities (including the Conversion Shares) to be acquired by such Purchaser hereunder for such Purchaser's own account and not with a view to, or for resale in connection with, the distribution thereof in violation of the Securities Act. Such Purchaser is
aware that the Company is under no obligation to effect any such registration with respect to the Securities or the Conversion Shares (except solely to the extent, if any, provided in the Registration Rights Agreement) or to file for or comply with any exemption from registration. Such Purchaser is purchasing the Securities (including the Conversion Shares) to be acquired by such Purchaser hereunder for its own account and not with a view to, or for resale in connection with, the distribution thereof in violation of the Securities Act.
(c) Experience. Such Purchaser has such knowledge and experience in financial and business matters that such Purchaser is capable of evaluating the merits and risks of such investment, is able to incur a complete loss of such investment and is able to bear the economic risk of such investment for an indefinite period of time. Such Purchaser has had the opportunity to ask questions of the Company with respect to the Company, the Securities, the Conversion Shares, the Acquisition and related transactions and to receive such information from the Company regarding such matters as it deems necessary in making its decision to purchase the Securities (including the Conversion Shares). Such Purchaser is an "accredited investor" as that term is defined in Rule 501 of Regulation D promulgated under the Securities Act.
(d) Stock Consideration. To the extent such Purchaser is purchasing Securities in consideration for the exchange of Kilian Stock, such Purchaser owns such Kilian Stock of record and beneficially, free and clear of any and all lien and encumbrances (other than restrictions on transferability under securities laws). At the Closing, such Purchaser will convey and deliver all right, title and interest in and to such Kilian Stock, free and clear of all liens and encumbrances (other than restrictions on transferability under securities laws). Such Kilian Stock constitutes all shares of Kilian Stock owned directly or indirectly by such Purchaser.
(e) Compliance with Laws. To our knowledge, no governmental orders, permissions, consents, approvals, authorizations are required to be obtained and no registrations or other filings are required to be made in connection with the execution of this Agreement by the Purchasers and the delivery of the Securities.
(f) No Disposition of Securities. No Purchaser is obligated to sell any Securities purchased hereunder pursuant to a binding agreement entered into prior to the Closing and no Purchaser has any plan or intention to sell or otherwise dispose of any Securities purchased hereunder in any transaction that could be integrated with the purchase and sale of Securities contemplated by this Agreement.
4. Legends. All certificates representing Securities shall bear legends in the form required under the Stockholders Agreement (and, in the case of Common Shares, such other legends with respect to the Vesting Restrictions as the Company may reasonably require) until such time as they may be removed as provided therein.
5. Conditions to Issuance of Securities. The Company's obligation to issue and sell the Securities to any Purchaser shall be subject to the satisfaction of the following conditions:
(a) All representations and warranties of such Purchaser contained in this Agreement shall be true and correct as of the Closing, and consummation of the purchases contemplated hereby shall constitute a reaffirmation by each Purchaser that all representations
and warranties of such Purchaser contained in this Agreement are true and correct as of the Closing.
(b) On or before the Closing, substantially contemporaneously with the issuance and sale of the Securities hereunder, each Purchaser shall have duly executed and delivered to the Company a counterpart of the Stockholders Agreement, the Registration Rights Agreement and such other documents as the Company may reasonably request in connection with the transactions contemplated hereby (and the execution of this Agreement constitutes the agreement of the Purchaser to so execute such documents).
6. Conditions to Purchasers' Obligation to Purchase. Each Purchaser's obligation to purchase the Securities from the Company shall be subject to the satisfaction of the following conditions:
(a) Concurrently with or prior to such Purchaser's purchase, Altra shall have issued and sold at least $165,000,000 of senior notes; and
(b) all representations and warranties of the Company contained in this Agreement shall be true and correct as of the Closing, and consummation of the purchases contemplated hereby shall constitute a reaffirmation by the Company that all representations and warranties of the Company contained in this Agreement are true and correct as of the Closing.
7. Conditions to CDPQ's Obligation to Purchase. The obligation of Caisse de depot et placement du Quebec, a Quebec corporation ("CDPQ"), to purchase the Preferred Shares from the Company shall be subject to the satisfaction of the following conditions:
(a) Concurrently with or prior to such purchase, the Company shall have entered into a senior credit agreement on terms reasonably satisfactory to CDPQ;
(b) Concurrently with such purchase, the Company shall have consummated the Acquisition; and
(c) Concurrently with such purchase, the Company shall sell Securities (including the Preferred Shares to be sold to CDPQ) for cash and Kilian Stock having an aggregate value of at least $34,000,000.
8. Related Party Transactions.
(a) Advisory Services Agreement. Each Purchaser acknowledges and consents that in connection with the transactions contemplated in the Purchase Agreement, Altra will enter into an advisory services agreement with Genstar Capital, L.P. ("GENSTAR") in the form attached hereto as Exhibit D which shall include, among other things, (1) the payment to Genstar of a closing fee, (2) the payment to Genstar of an annual consulting fee, (3) the payment to Genstar of advisory fees for transactions contemplated thereby and (4) the reimbursement of all of Genstar's expenses incurred in connection with the Purchase Agreement and the transactions contemplated thereby.
(b) Indemnification. Each Purchaser acknowledges that in connection with the investment by Genstar Capital Partners III, L.P. and Stargen III, L.P. (together, the "GENSTAR FUNDS") and CDPQ in the Company, the Company shall indemnify and hold harmless (i) Genstar and each Genstar Fund and all officers, directors, employees, agents, advisors and limited and general partners of Genstar or any Genstar Fund and (ii) CDPQ and all officers, directors, employees, agents, advisors and limited and general partners of such entity, in each case, from and against any liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, attorneys' fees, expenses and disbursements of any kind which may be imposed upon, incurred by or asserted against any such person or entity in any manner relating to or arising out of (A) the purchase and/or ownership by the Genstar Funds and CDPQ, respectively, of the Company's capital stock, (B) the Purchase Agreement, the Acquisition and the other transactions contemplated thereby or (C) any litigation to which any of such parties is made a party in its capacity as a stockholder or beneficial owner (or an affiliate of a stockholder or beneficial owner) of the Company's capital stock (including, without limitation, the Securities and the Conversion Shares).
9. Use of Proceeds. The Company shall use the proceeds from issuance and sale of the Securities as described in the Offering Circular.
10. Section 351 Treatment. The Company, each Purchaser and their affiliates shall treat and report the transactions contemplated by this Agreement as transactions that are governed by Section 351 of the Code and shall not take any position contrary thereto on any tax return or in any proceeding relating to taxes.
11. Vesting Restrictions. Each Purchaser who acquires Common Shares in exchange for Kilian Stock hereby acknowledges that such Common Shares will be subject to the Vesting Restrictions.
12. Withholding Exemptions. Each Purchaser who is a United States person for U.S. federal income tax purposes shall submit a properly executed IRS Form W-9. Each Purchaser who is not a United States person for U.S. federal income tax purposes shall submit a properly executed IRS Form W-8 (e.g. W-8BEN, W-8EXP) establishing a complete exemption from U.S. withholding taxes on all payments made with respect to the Preferred Shares and the Conversion Shares.
13. Miscellaneous.
(a) Notices. All notices and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given if delivered personally or sent by certified mail, return receipt requested, postage prepaid, to the parties to this Agreement at the following address or to such other address as a party to this Agreement shall specify by notice to the other parties hereto:
if to a Purchaser, to the address listed next to such Purchaser's name on the attached Schedule I.
if to the Company:
Altra Holdings, Inc.
c/o Genstar Capital Partners III, L.P.
Four Embarcadero Center, Suite 1900
San Francisco, CA 94111-4191
Attention: Jean-Pierre L. Conte Telecopy No.: (415) 834-2383
with a copy to:
Weil, Gotshal & Manges LLP
201 Redwood Shores Parkway
Redwood Shores, CA 94065
Attention: Curtis L. Mo, Esq.
Craig W. Adas, Esq.
Fax No.: (650) 802-3100;
All such notices and communications shall be deemed to have been received on the date of delivery or on the third business day after the mailing thereof.
(b) Binding Effect; No Assignment. This Agreement shall be binding upon and inure to the benefit of the parties to this Agreement and their respective successors and assigns; provided that neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by any Purchaser without the prior written consent of the Company (which may be granted or withheld in the sole discretion of the Company) and, as a condition to any permitted assignment by any Purchaser of its rights and obligations to purchase Securities hereunder (whether a complete assignment or a partial assignment), the Company will require that the transferee sign a counterpart of this Agreement pursuant to which such transferee confirms its obligation to purchase the Securities to be purchased by it, and makes the representations, warranties and covenants of the Purchaser as set forth herein; and provided further that no such transfer or assignment will excuse the assignor from its obligation to purchase and pay for the applicable Securities in the event that the transferee does not fulfill such obligation at or prior to the Closing. In the event of any partial or entire assignment of a Purchaser's rights to purchase Securities hereunder, the parties will cause Schedule I to be amended or supplemented to reflect the amount of Securities to be purchased by each Purchaser (after giving effect to such assignment) and the purchase price to be paid therefor. Notwithstanding the foregoing, this Agreement shall be assignable by any Purchaser to an affiliate of such Purchaser, provided, however, that in such case the transferee must agree in writing to be bound by the terms of this Agreement to the same extent as if the transferee were a Purchaser hereunder.
(c) Benefits. Nothing in this Agreement, express or implied, is intended or shall be construed to give any person other than the parties to this Agreement or their respective successors or assigns any legal or equitable right, remedy or claim under or in respect of any agreement or any provision contained herein.
(d) Survival. All covenants, agreements, representations and warranties made herein shall survive the execution and delivery hereof and transfer of any Securities.
(e) Waiver. Either party hereto may by written notice to the other (a) extend the time for the performance of any of the obligations or other actions of the other under this Agreement, (b) waive compliance with any of the conditions or covenants of the other contained in this Agreement, and (c) waive or modify performance of any of the obligations of the other under this Agreement. Except as provided in the preceding sentence, no action taken pursuant to this Agreement, including, without limitation, any investigation by or on behalf of any party, shall be deemed to constitute a waiver by the party taking such action of compliance with any representations, warranties, covenants or agreements contained herein. The waiver by any party hereto of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any preceding or succeeding breach and no failure by either party to exercise any right or privilege hereunder shall be deemed a waiver of such party's rights or privileges hereunder or shall be deemed a waiver of such party's rights to exercise the same at any subsequent time or times hereunder.
(f) Amendment. This Agreement may be amended, modified or supplemented only by a written instrument executed by the Company, Genstar and CDPQ.
(g) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of New York, without giving effect to any choice or conflict of law provision or rule that would cause the application of the domestic substantive laws of any other jurisdiction.
(h) Headings. The section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.
(i) Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.
(j) Expenses. In connection with the Closing, the Company shall pay the reasonable fees and out-of-pocket expenses of CDPQ with respect to the transactions contemplated hereby.
(k) Fees. Each party, severally and not jointly, hereby represents and warrants that such party neither is nor will be obligated for any finder's or broker's fees or commissions in connection with the purchase and sale of the Securities hereunder (except in the case of Genstar, as provided in the Management Agreement).
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Company and each Purchaser have executed this Agreement as of the day and year first above written.
ALTRA HOLDINGS, INC.
By: /s/ Michael Hurt ------------------------------------ Name: Michael Hurt Title: --------------------------------- |
[Signature Page to Subscription Agreement]
GENSTAR CAPITAL PARTNERS III, L.P.
By: Genstar Capital III, L.P.
Its: General Partner
By: Genstar III GP LLC
Its: General Partner
By: /s/ J.P. Conte ------------------------------------ Name: J.P. Conte Title: --------------------------------- |
Address:
Genstar Capital Partners III, L.P.
Four Embarcadero Center, Suite 1900
San Francisco, CA 94111-4191
Attention: Jean-Pierre L. Conte
Telecopy No.: (415) 834-2383
with a copy to:
Weil, Gotshal & Manges LLP
201 Redwood Shores Parkway
Redwood Shores, CA 94065
Attention: Curtis L. Mo, Esq.
Craig W. Adas, Esq.
Fax No.: (650) 802-3100
[Signature Page to Subscription Agreement]
STARGEN III, L.P.
By: Genstar Capital III, L.P.
Its: General Partner
By: Genstar III GP LLC
Its: General Partner
By: /s/ J.P. Conte ------------------------------------ Name: J.P. Conte Title: --------------------------------- |
Address:
c/o Genstar Capital Partners III, L.P.
Four Embarcadero Center, Suite 1900
San Francisco, CA 94111-4191
Attention: Jean-Pierre L. Conte
Telecopy No.: (415) 834-2383
with a copy to:
Weil, Gotshal & Manges LLP
201 Redwood Shores Parkway
Redwood Shores, CA 94065
Attention: Curtis L. Mo, Esq.
Craig W. Adas, Esq.
Fax No.: (650) 802-3100
[Signature Page to Subscription Agreement]
CAISSE DE DEPOT ET PLACEMENT DU QUEBEC
By: /s/ Luc Houle ------------------------------------ Name: Luc Houle Title: --------------------------------- By: /s/ Louise Lalonde ------------------------------------ Name: Louise Lalonde Title: --------------------------------- |
Address:
Caisse de depot et placement du Quebec
1000, place Jean-Paul-Riopelle
Montreal (Quebec) H2Z 2B3
Attention: Luc Houle, Senior Vice
President
Fax No.: (514) 847-2493
with a copy to:
Kirkland & Ellis LLP
Citigroup Center
153 East 53rd Street
New York, NY 10022-4675
Attention: Kimberly P. Taylor
Fax No.: (212) 446-6460
[Signature Page to Subscription Agreement]
/s/ Michael Hurt ---------------------------------------- Michael L. Hurt Address: 58 Cornertown Road Chambersburg, PA. 17201 Telephone: (717) 267-3904 /s/ William Duff ---------------------------------------- William J. Duff Address: 4535 Limestone Dr. Manlius NY 13104 Facsimile: (315) 432-1312 (non-secure facsimile line) /s/ Thomas Tatarczuch ---------------------------------------- Thomas F. Tatarczuch Address: 711 Orchard Court Chambersburg, PA 17201 Telephone: (717) 267-3052 /s/ Donald Wierbinski ---------------------------------------- Donald S. Wierbinski Address: 2393 Sands Rd. Camillus NY 13031 Facsimile: (315) 432-1312 (non-secure facsimile line) |
[Signature Page to Subscription Agreement]
SCHEDULE I
PREFERRED PURCHASERS
Aggregate Kilian Total Number of Preferred Stock Preferred Shares Aggregate Cash Contributed Purchaser Acquired Contributed ($100 per Share) --------- ---------------- -------------- ---------------- Genstar Capital Partners III, L.P. 26,345,584 $18,660,984 76,846 Stargen III, L.P. 949,416 $ 673,416 2,760 Caisse de depot et placement du Quebec 7,000,000 $ 7,000,000 -- Michael L. Hurt 500,000 -- 5,000 William J. Duff 150,000 -- 1,500 Thomas F. Tatarczuch 100,000 -- 1,000 Donald S. Wierbinski 55,000 -- 550 ---------- ----------- ------ TOTALS: 35,100,000 $26,334,400 87,656 |
SCHEDULE II
COMMON PURCHASERS
Aggregate Kilian Total Number of Common Stock Common Shares Aggregate Cash Contributed Purchaser Acquired Contributed ($6.21 per Share) --------- --------------- -------------- ----------------- Michael L. Hurt 292,671 -- 2,922 William J. Duff 243,893 -- 2,435 Thomas F. Tatarczuch 170,775 -- 1,705 Donald S. Wierbinski 170,775 -- 1,705 TOTALS: 878,114 8,767 |
[Signature Page to Subscription Agreement]
.
.
.
EXHIBIT 21.1
SUBSIDIARIES OF ALTRA HOLDINGS, INC.
NAME OF SUBSIDIARY JURISDICTION OF ORGANIZATION ------------------ ---------------------------- Altra Industrial Motion, Inc. Delaware - American Enterprises MPT Corp. Delaware - Nuttall Gear L L C Delaware - American Enterprises MPT Holdings, L.P. Delaware - Ameridrives International, L.P. Delaware - Boston Gear LLC Delaware - The Kilian Company Delaware - Kilian Manufacturing Corporation Delaware - 3091780 Nova Scotia Company Nova Scotia, Canada - Kilian Canada, ULC Nova Scotia, Canada - Warner Electric LLC Delaware - Formsprag LLC Delaware - Warner Electric Technology LLC Delaware - Warner Electric International Holding, Inc. Delaware - Warner Electric (Holdings) SAS France - Warner Electric Europe SAS France - Warner Electric Group GmbH Germany - Warner Electric Verwaltungs GmbH Germany - Stieber GmbH Germany - Warner Electric (Netherlands) Holding, B.V. Netherlands - Warner Electric Australia Pty. Ltd. Australia - Warner Shui Hing Limited Hong Kong - Warner Electric (Singapore) Ltd. Singapore - Warner Electric (Taiwan) Ltd. Taiwan - Warner Electric (Thailand) Ltd. Thailand - Warner Electric UK Group Ltd. United Kingdom - Warner Electric UK Holding Ltd. United Kingdom - Wichita Company Ltd. United Kingdom - Hay Hall Holdings Limited United Kingdom - The Hay Hall Group Limited United Kingdom - Matrix International, Ltd. United Kingdom - Matrix International GmbH Germany - Inertia Dynamics, LLC Delaware - Bibby Group Ltd. United Kingdom - Bibby Transmissions Ltd. United Kingdom - Bibby Turboflex SA South Africa - Scandicom AB Sweden - Turboflex Ltd. United Kingdom - Torsiflex Ltd. United Kingdom - Rathi Turboflex Pty Ltd India - Huco Power Transmission, Ltd. United Kingdom |
- Huco Engineering Industries Ltd. United Kingdom - Dynatork Air Motors Ltd. United Kingdom - Dynatork, Ltd. United Kingdom - Twiflex Ltd. United Kingdom - Safetek Ltd. United Kingdom |
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the reference to our firm under the caption "Experts" and to the use of our report dated September 25, 2006, in the Registration Statement (Form S-1 No. 333- ___________) and related Prospectus of Altra Holdings, Inc. for the registration of shares of its common stock.
/s/ Ernst & Young LLP Boston, Massachusetts September 25, 2006 |
Exhibit 23.2
CONSENT OF INDEPENDENT CHARTERED ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting a part of this Registration Statement (Form S -- 1 No. 333- ) of our report dated 8 June 2006 related to Hay Hall Holdings Limited, which are contained in that Prospectus.
We also consent to the reference to us under the caption "Experts" in the Prospectus.
/s/ BDO Stoy Hayward LLP BDO Stoy Hayward LLP Birmingham, United Kingdom September 27, 2006 |