CADE INDUSTRIES INC, 10-K405, 1996-03-29

CADE INDUSTRIES INC
10-K405, 1996-03-29
AIRCRAFT ENGINES & ENGINE PARTS

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<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-K

/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]

For the fiscal year ended December 31, 1995

/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period from to
--------- ---------

Commission file number: 0-12808

Cade Industries, Inc.
(Exact name of registrant as specified in its charter)

Wisconsin 39-1371038
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

5640 Enterprise Drive, Lansing, Michigan 48911
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: 517-394-1333

Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $.001 par value
(Title of class)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
----- -----

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. /X/

As of February 26, 1996, 21,886,350 shares of Common Stock were
outstanding, and the aggregate market value of the Common Stock (based upon the
$.625 closing bid on that date in the over-the-counter market) held by
nonaffiliates (excludes shares reported as beneficially owned by directors and
executive officers which exclusion does not constitute an admission as to
affiliate status) was approximately $9,389,579.00.

DOCUMENTS INCORPORATED BY REFERENCE

<TABLE>
<CAPTION>
Part of Form 10-K Into Which Portions of
Document Document are Incorporated
-------- -------------------------
<S> <C>
Annual Report to Shareholders for the fiscal year ended
December 31, 1995 Part II
Proxy Statement for 1996 Annual Meeting of Shareholders Part III
</TABLE>
<PAGE> 2
PART I

ITEM 1. BUSINESS.

General

Cade Industries, Inc. (the "Company" or "Cade") conducts its operations
through three wholly-owned subsidiaries, Auto-Air Composites, Inc.
("Auto-Air"), Cade Composites, Inc. ("CCI") and Pollux Acquisition Corporation
("Pollux").

Cade was incorporated in 1981 and initially was engaged in precision
machining of cast parts for the aircraft industry through its former Precision
Machining Division located in Marinette, Wisconsin, which was sold in June
1989. The Company acquired Auto-Air in 1984 and the business that now is
conducted by CCI in 1988. On November 30, 1994, the Company acquired Pollux
Corporation which, through its wholly-owned subsidiary, H.A.C. Corporation
("HAC"), manufactures and overhauls bonded structures and composite parts for
military and commercial aircraft. The Company has included the acquisition in
its consolidated financial statements since December 1994.

Products

Cade is engaged worldwide in the design, manufacture and repair and
overhaul of high technology composite components for the aerospace, air
transport and specialty industries. Composites are multilayer materials
composed of various types of precisely oriented fibers such as epoxy glass,
polyamide glass and epoxy kevlar, which are molded and cured at high
temperatures under pressure or vacuum. The high strength and low weight of
composite materials makes them especially well suited for aerospace and other
applications where weight is a critical factor. Cade's primary products
include molded and bonded composite jet engine components consisting of engine
inlets, acoustical liners, fairings and engine cases ("Gas Turbine Products");
metal fabricated and bonded composite airframe components consisting of various
control surface products, access and landing gear doors and wing tips as well
as auxiliary power unit enclosures ("Airframe Products"); the repair and
overhaul of commercial and military gas turbine engine and airframe components
("Repair and Overhaul Services"); and test nacelles used in the ground testing
and overhaul of major commercial jet engines and related ground support
equipment ("Test Equipment"). These products are sold worldwide through the
Company's internal sales force and independent sales representatives to major
engine equipment manufacturers, airlines and overhaul facilities. For 1995,
1994 and 1993, sales of Gas Turbine Products, Airframe Products, Repair and
Overhaul Services and Test Equipment as a percentage of total sales were as
follows:

-2-
<PAGE> 3
<TABLE>
<CAPTION>
Percentage of Total Net Sales
------------------------------
Year Ended December 31,
------------------------------

1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Gas Turbine Products 25.7% 35.8% 41.4%
Airframe Products 24.8% 11.1% 12.6%
Repair and Overhaul Services 24.2% 7.2% 2.3%
Test Equipment 20.7% 35.3% 32.5%
---- ---- ----
Total 95.4% 89.4% 88.8%
==== ==== ====
</TABLE>

Through Auto-Air and HAC, Cade operates repair stations under Federal
Aviation Administration ("FAA") licenses. The repair stations are authorized
to repair and overhaul certain gas turbine engine cases and other components,
sheet metal and composite flight control surfaces, skin panels, bonded
honeycomb panels, cargo doors and engine cowls. In addition to FAA
certification, Auto-Air and HAC have also been certified by the European Joint
Airworthiness Authority ("JAA") to repair specific aircraft parts on certain
types of aircraft subject to JAA jurisdiction. Although some nations require
approval from their own aviation authorities before Auto-Air and HAC are
authorized to repair parts on aircraft subject to their jurisdiction, FAA and
JAA certification enable Auto-Air and HAC to repair parts on aircraft subject
to the jurisdiction of most foreign countries.

Raw Materials

The principal raw materials used in Cade's manufacturing processes
consist of epoxy glass, polyamide glass, epoxy kevlar, graphite BMI and
aluminum honeycomb. Although none of these materials currently is in short
supply, the Company has experienced increased order lead times in certain cases
during the past year, which management attributes to the desire of suppliers to
minimize inventory. These raw materials are purchased from multiple suppliers
located in the United States. International sources also are available.
Certain customers require that purchases be made from one or more approved
suppliers or that the Company certify the material specifications in its
in-house laboratories. Cade has never experienced a shortage of raw materials
as a result of such supplier or material specifications restrictions.

Patents and Trademarks

Cade currently holds no material patents or registered trademarks,
tradenames or similar intellectual property, although the Company has applied
for certain patents in the area of high temperature composites applications and
expects to seek patent protection in the future as appropriate to preserve
proprietary developments. The Company believes that the nature of its business
presently does not require the development of patentable products or registered
tradenames or trademarks to maintain market position.

-3-
<PAGE> 4
Marketing and Competition

The Company's products are marketed primarily through its internal
sales force and independent sales representatives. The majority of Cade's
sales are made through individual purchase orders which are cancellable by
customers, subject to cancellation charges to cover certain manufacturing costs
and related expenses. In addition, approximately 12.6% of Cade's total net
sales during fiscal 1995 were attributable to government contracts which are
subject to termination or renegotiation at the option of the U.S. Government.
Historically, terminations and renegotiations of government contracts have not
materially impacted the Company's earnings.

During the fiscal years ended December 31, 1995 and 1994, sales to the
Pratt & Whitney unit of United Technologies Corporation ("Pratt & Whitney")
accounted for approximately 19.7% and 29.4% of total net sales, respectively,
sales to McDonnell Douglas Corporation accounted for approximately 5.3% and
11.0% of total net sales, respectively, and sales to the Aircraft Engine
Business Group of the General Electric Company accounted for approximately 7.5%
and 6.5% of total net sales, respectively. For the fiscal years ended December
31, 1995, 1994 and 1993, the Company's export sales as a percentage of total
net sales were 23.1%, 28.2% and 18.1%, respectively.

Cade competes in its manufacturing operations primarily on the basis of
its design capability, precise quality standards, prompt delivery and price.
Management believes that the Company has certain competitors which possess
adequate expertise in the use of composites to meet customers' quality
standards and, as to such competitors, Cade competes primarily on the basis of
price. Some of the Company's manufacturing competitors, including
customer-affiliated manufacturing units, are larger and have substantially
greater resources than Cade. As a result of the downturn in the aircraft and
aerospace markets, competition has increasingly intensified during the past
three years, resulting in reduced profit margins and increased internalization
of production by large manufacturers.

Cade believes it is one of only two manufacturers of test nacelle and
related ground support equipment for large commercial jet engines. In
addition, Cade believes it is one of only a limited number of suppliers for
certain composite jet engine and air frame components whose manufacturing
processes have been approved by the relevant engine manufacturer or other prime
contractor. Such approval certifies that the Company has been audited by the
prime contractor and meets or exceeds such contractor's process, quality
control and material specifications.

Cade competes in its repair and overhaul operations primarily on the
basis of its expertise and ability to provide short turn times within the
industry's stringent quality specifications and customers' pricing
requirements. The Company's competitors for repair and overhaul services
include substantially all commercial airlines and many large and small
independent suppliers, many of which are larger and have substantially greater
resources than Cade. The market for repair and overhaul services is dominated
by The NORDAM Group, an independent supplier of such services, which Cade
believes has annual revenues in excess of $400 million.

-4-
<PAGE> 5
Backlog

Employees

Cade has approximately 313 employees, of which 14 are employed in
design and design-related services; 207 are employed in manufacturing, repair
and quality control; and 92 are employed in administration (management, sales
and clerical). Approximately 25% of these employees are represented by a
union.

ITEM 2. PROPERTIES.

The Company's owned and leased facilities are designed and constructed
for industrial purposes and are located in industrial districts. Each facility
is well maintained, suitable for the Company's purposes, effectively utilized
and capable of supporting substantially higher levels of production. The table
below sets forth certain information about the Company's principal facilities.
<TABLE>
<CAPTION>
Square Owned Principal
Address Feet or Leased Description Activity
- ------- ---- --------- ----------- --------
<S> <C> <C> <C> <C>
5640 Enterprise Drive 54,000 Owned 1 and 2 story Composite
Lansing, MI brick building manufacturing
in industrial park

537 Camden Drive 53,000 Owned 1 and 2 story Manufacturing;
Grand Prairie, Texas metal building repair and overhaul
in industrial area

4075 Ruffin Road 44,000 Leased 1 story reinforced Manufacturing
San Diego, CA (1) concrete building in
industrial area

5720 Enterprise Drive 27,500 Owned 1 story brick Composite
Lansing, MI building in manufacturing
industrial park
- -------------------------
</TABLE>
(1) Lease expires January 31, 1999.

-5-
<PAGE> 6
ITEM 3. LEGAL PROCEEDINGS.

The Company is not involved in any material pending legal proceedings
other than ordinary routine litigation incidental to its business.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

No matters were submitted to a vote of security holders during the
fourth quarter of the fiscal year ended December 31, 1995.

EXECUTIVE OFFICERS OF THE REGISTRANT

Executive officers of Cade are elected by the Board of Directors to
serve until their successors are elected and qualified. The following table
sets forth certain information about Cade's executive officers:

NAME (AGE) BUSINESS EXPERIENCE

Terrell L. Ruhlman (69) Chairman of the Board and Chief Executive Officer
of the Company since April 1990; Member of the
Company's Audit and Strategic Planning Committees;
Chairman of the Executive Committee of the Company
from May 1989 to April 1990; consultant to and
director of Sonitrol Corporation (manufacturer of
electronic security systems) from 1983 to 1992;
director of EI Environmental Engineering Concepts
Ltd. (manufacturer of industrial misting systems).

Richard A. Lund (44) President and Chief Operating Officer of the
Company since May 1990; Director of the Company
since January 1991; Member of the Company's
Strategic Planning Committee; Chief Executive
Officer of Auto-Air; President of Auto-Air from
1988 through 1994.

Edward B. Stephens (48) Vice President, Treasurer, Assistant Secretary and
Chief Financial Officer of the Company since July
1989; Member of the Company's Strategic Planning
Committee.

Richard J. Gribbins (51) Vice President of HAC Operations of Cade since
August 1994; President of Bay Precision, Inc.
(manufacturer of electro-mechanical assemblies)
from March 1990 to August 1994; business consultant
from October 1987 to August 1994.

-6-
<PAGE> 7
PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.

Information in response to this item is incorporated herein by reference
to the information under the caption "Selected Financial Highlights - Market
Prices" in the Registrant's 1995 Annual Report to Shareholders.

ITEM 6. SELECTED FINANCIAL DATA.

Information in response to this item is incorporated herein by reference
to the information under the caption "Selected Financial Highlights" in the
Registrant's 1995 Annual Report to Shareholders.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION.

Information in response to this item is incorporated herein by reference
to the information under the caption "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in the Registrant's 1995 Annual
Report to Shareholders.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Information in response to this item is incorporated herein by reference
to "Independent Auditors' Report," "Consolidated Balance Sheets," "Consolidated
Statements of Operations," "Consolidated Statements of Changes in Shareholders'
Equity," "Consolidated Statements of Cash Flows" and "Notes to Consolidated
Financial Statements" in the Registrant's 1995 Annual Report to Shareholders.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

Not applicable. (The Company need not provide the disclosure called for
by this Item 9 because it has been previously reported, as that term is defined
in Rule 12b-2 under the Securities Exchange Act of 1934, as amended.)

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

Information in response to this item is incorporated herein by reference
to (i) the information under the caption "Election of Directors" in the
Registrant's Proxy Statement for its 1996 Annual Meeting of Shareholders ("Cade
1996 Proxy Statement") and (ii) the information under the caption "Executive
Officers of the Registrant" in Part I hereof.

-7-
<PAGE> 8
ITEM 11. EXECUTIVE COMPENSATION.

Information in response to this item is incorporated herein by reference
to the information under the caption "Executive Compensation" in the Cade 1996
Proxy Statement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

Information in response to this item is incorporated herein by reference
to the information under the caption "Principal Security Holders and Security
Holdings of Management" in the Cade 1996 Proxy Statement.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Information in response to this item is incorporated herein by reference
to the information under the caption "Election of Directors - Compensation of
Directors" in the Cade 1996 Proxy Statement.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM
8-K.

(a) Documents filed:

1. Financial statements.

The financial statements required to be filed by Item 8
hereof have been incorporated by reference to the
Registrant's 1995 Annual Report to Shareholders and
consist of the following:

Consolidated Balance Sheets as of December 31,
1995 and 1994.

Consolidated Statements of Operations for the
years ended December 31, 1995, 1994 and 1993.

Consolidated Statements of Changes in
Shareholders' Equity for the three year period
ended December 31, 1995.

Consolidated Statements of Cash Flows for the years
ended December 31, 1995, 1994 and 1993.

Notes to Consolidated Financial Statements.

Report of Independent Auditors.

-8-
<PAGE> 9
2. Financial statement schedules.

The following financial statement schedules are
included in Item 14(d) hereof:

Schedule II - Valuation and Qualifying Accounts

Report of Predecessor Accountant filed pursuant to Note
1 of Rule 14a-3(b)(1).

All other schedules for which provision is made in the
applicable accounting regulations of the Securities and Exchange Commission are
not required under the related instructions or are inapplicable, and therefore
have been omitted.

3. Management Contract and Compensatory Plans and
Arrangements.

All management contracts and compensatory plans and
arrangements are identified by an asterisk after the
exhibit number on the attached Exhibit Index.

(b) Reports on Form 8-K:

No Current Reports on Form 8-K were filed during the last
quarter of 1995.

See the Exhibit Index immediately following the signature page
of this report, which Index is incorporated herein by this
reference.

In addition, pursuant to Item 601(b)(4)(iii)(A) of Regulation
S-K, the Registrant hereby agrees to furnish to the Commission
upon request any instrument with respect to long-term debt
pursuant to which the total amount of long-term debt authorized
thereunder does not exceed 10% of the Registrant's consolidated
total assets.

(d) Financial Statement Schedules:

-9-
<PAGE> 10
CADE INDUSTRIES, INC.
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D COL. E
- -----------------------------------------------------------------------------------------------------------------------------
ADDITIONS
------------------------------------

(1) (2)
Balance at Charged to Costs Charged to Balance
Beginning of and Expenses Other Accounts- Deductions- at End
DESCRIPTION Period Describe Describe of Period
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1995:
Reserves and allowances
deducted from asset accounts:
Valuation allowances:

Inventory $ 447,949 $ 12,552 $ 430,000 (1) $ 890,501
Deferred income taxes 536,000 104,000 (1) 640,000
Other 135,619 24,466 $ 5,319 (2) 154,766
Amortization allowances:
Goodwill 444,898 91,321 536,219
Other 253,588 46,618 300,206
---------- --------- ----------- ----------- -----------
$1,818,054 $ 174,957 $ 534,000 $ 5,319 $ 2,521,692
========== ========= =========== =========== ===========

Year ended December 31, 1994:
Reserves and allowances
deducted from asset accounts:
Valuation allowances:
Inventory $ 447,949 (1) $ 447,949
Deferred income taxes 536,000 (1) 536,000
Other $ 10,619 125,000 (1) 135,619
Amortization allowances:
Goodwill 400,015 $ 44,883 444,898
Other 193,550 60,038 253,588
---------- --------- ----------- -----------
$ 604,184 $ 104,921 $ 1,108,949 $ 1,818,054
========== ========= =========== ===========

Year ended December 31, 1993:
Reserves and allowances
deducted from asset accounts:
Valuation allowances $ 68,500 $ 57,881(3) $ 10,619
Amortization allowances:
Non-competition 1,139,691 1,139,691(4) -0-
Goodwill 359,677 $ 40,338 400,015
Other 142,173 51,377 193,550
---------- --------- ----------- -----------
$1,710,041 $ 91,715 $ 1,197,572 $ 604,184
========== ========= =========== ===========
</TABLE>

(1) Valuation allowances recorded via purchase accounting for acquisition of
Pollux Corporation.
(2) Uncollectible accounts written-off, net of recoveries.
(3) Adjustment to realizable amount.
(4) Write-off of fully amortized assets.
<PAGE> 11
ERNST & YOUNG LLP - Suite 1700 - Phone: 313 596 7100
500 Woodward Avenue
Detroit, Michigan 48226-3426

REPORT OF INDEPENDENT AUDITORS

Shareholders and Board of Directors
Cade Industries, Inc. and Subsidiaries

We have audited the accompanying consolidated balance sheet of Cade Industries,
Inc. and Subsidiaries as of December 31, 1994, and the related consolidated
statements of operations, changes in shareholders' equity, and cash flows for
each of the two years in the period ended December 31, 1994. Our audit also
included the financial statement schedule listed in the Index at Item 14(a).
These financial statements and the schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements and the schedule based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Cade Industries,
Inc. and Subsidiaries at December 31, 1994, and the consolidated results of
their operations and their cash flows for each of the two years in the period
ended December 31, 1994. Also, in our opinion, the related financial statement
schedule, when considered in relation to the basic financial statements taken
as a whole, presents fairly in all material respects the information set forth
therein for each of the two years in the period ended December 31, 1994.

As discussed in Note 1 to the financial statements, effective January 1, 1993
the Company changed its method of accounting for income taxes in accordance
with Statement of Financial Accounting Standards No. 109.

/s/ Ernst & Young LLP

February 13, 1995

Ernst & Young is a member of Ernst & Young International, Ltd.

-11-
<PAGE> 12
SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

CADE INDUSTRIES, INC.

By /s/ Terrell L. Ruhlman Dated: March 28, 1996
----------------------------------
Terrell L. Ruhlman, Chairman of
the Board, Chief Executive Officer
and Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated:

<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Molly F. Cade Director March 28, 1996
- ------------------------
Molly F. Cade

/s/ Conrad G. Goodkind Director March 28, 1996
- ------------------------
Conrad G. Goodkind

/s/ William T. Gross Director March 28, 1996
- ------------------------
William T. Gross

/s/ Richard A. Lund President, Chief March 28, 1996
- ------------------------
Richard A. Lund Operating Officer
and Director

/s/ Terrell L. Ruhlman Chairman of the Board March 28, 1996
- ------------------------
Terrell L. Ruhlman and Chief Executive Officer
(principal executive officer)

/s/ John W. Sandford Director March 28, 1996
- ------------------------
John W. Sandford

/s/ Steven M. Tadler Director March 28, 1996
- ------------------------
Steven M. Tadler

/s/ Edward B. Stephens Vice President, Treasurer March 28, 1996
- ------------------------
Edward B. Stephens and Chief Financial Officer
(principal accounting officer)
</TABLE>

-12-
<PAGE> 13
CADE INDUSTRIES, INC.

Exhibit Index to Report on Form 10-K
for the fiscal year ended December 31, 1995

<TABLE>
<CAPTION>
Exhibit Incorporated herein Filed
No. Description by reference to: Herewith
- ------- ----------- ------------------- --------
<S> <C> <C> <C>
2.1 Agreement and Plan of Merger by and Exhibit 2.1 to the Registrant's
among Cade Industries, Inc., Pollux Form S-4 Registration Statement
Acquisition Corporation, Pollux dated October 28, 1994,
Corporation and H.A.C. Corporation Registration No. 33-83130
dated as of May 24, 1994 ("Agreement ("1994 S-4")
and Plan of Merger")

2.2 Amendment No. 1 to Agreement and Exhibit 2.2 to Registrant's 1994
Plan of Merger S-4

3.1 Articles of Incorporation, as amended Exhibit 4.1 to the Registrant's Form S-8
Registration Statement dated November 10,
1990, Registration No. 33-37911
("1990 S-8")

3.2 By-Laws, as amended Exhibit 3.2 to Registrant's 1992 10-K

4.1 Articles IV, V and VIII of the Exhibit 4.1 to Registrant's 1990 S-8
Registrant's Articles of
Incorporation, as amended

4.2 Amended and Restated Revolving Credit Exhibit 4.2 to Registrant's 1994 10-K
and Term Loan Agreement dated as of
January 30, 1995, and First Amendment
thereto dated March 3, 1995

4.3 Amendment No. 2 to Amended and Restated X
Revolving Credit and Term Loan Agreement
dated as of June 1, 1995 by and between
the Registrant and Comerica Bank

4.4 Third Amendment to Amended and Restated Exhibit 4.1 to Registrant's
Revolving Credit and Term Loan Agreement Form 10-Q for the quarter ended
dated as of September 29, 1995 by and September 30, 1995
between the Registrant and Comerica Bank

4.5 Loan Agreement dated as of Exhibit 4.2 to Registrant's
September 1, 1990 between Form 10-Q for the quarter ended
the Economic Development September 30, 1990
Corporation of the City of
Lansing and Auto-Air Composites,
Inc.

4.6 Reimbursement Agreement Exhibit 4.2 to Registrant's
dated as of September 1, 1990 Form 10-Q for the quarter ended
between Auto-Air Composites, Inc. September 30, 1990
and Comerica Bank, as successor to
Manufacturers National
Bank of Detroit
</TABLE>

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<PAGE> 14
<TABLE>
<CAPTION>
Exhibit Incorporated herein Filed
No. Description by reference to: Herewith
- ------- ----------- ------------------- --------
<S> <C> <C> <C>
4.7 Amended and Restated Security Exhibit 4.5 to Registrant's 1994 10-K
Agreement dated as of January 30,
1995, between Comerica Bank and
the Registrant

4.8 Amended and Restated Guaranty Exhibit 4.6 to Registrant's 1994 10-K
dated as of January 30, 1995,
between Comerica Bank and
Auto-Air Composites, Inc.

4.9 Amended and Restated Security Exhibit 4.7 to Registrant's 1994 10-K
Agreement dated as of January 30,
1995, between Comerica Bank and
Auto-Air Composites, Inc.

4.10 Amended and Restated Guaranty Exhibit 4.8 to Registrant's 1994 10-K
dated as of January 30, 1995,
between Comerica Bank and
Cade Composites, Inc.

4.11 Amended and Restated Security Exhibit 4.9 to Registrant's 1994 10-K
Agreement dated as of January 30,
1995, between Comerica Bank and
Cade Composites, Inc.

4.12 Guaranty dated as of Exhibit 4.10 to Registrant's 1994 10-K
January 30, 1995, between
Comerica Bank and Cade Commercial
Composites, Inc.

4.13 Guaranty dated as of Exhibit 4.11 to Registrant's 1994 10-K
December 1, 1994, between Comerica
Bank and Pollux Acquisition
Corporation

4.14 Guaranty dated as of Exhibit 4.12 to Registrant's 1994 10-K
December 1, 1994, between Comerica
Bank and H.A.C. Corporation

4.15 Form of 6% Subordinated Notes issued Exhibit 2.1 to Registrant's 1994
in the initial aggregate principal S-4
amount of $2,861,040

10.1 I.A.M. National Pension Benefit Exhibit 19.4 to Registrant's
Fund, benefit plan B standard Form 10-Q for the quarter ended
participation agreement June 30, 1986

10.2 Sublease dated March 29, 1991 and First Exhibit 10.15 to Registrant's 1991 10-K
Amendment to Sublease dated April 24,
1991 between Cade Composites, Inc. and
Scientific-Atlanta, Inc. for premises located
at 4075 Ruffin Road, San Diego, CA
</TABLE>

-14-
<PAGE> 15
<TABLE>
<CAPTION>
Exhibit Incorporated herein Filed Seq.
No. Description by reference to: Herewith Page No.
- ------- ----------- ------------------- -------- --------
<S> <C> <C> <C> <C>
10.3* Employment Agreement between Exhibit 10.8 to Registrant's 1989 10-K
Edward B. Stephens and the
Registrant dated June 29, 1989

10.4* Employee Agreement dated January Exhibit 10.14 to Registrant's Form 10-Q
29, 1991 with Edward B. Stephens for the quarter ended March 31, 1991

10.5* Employment Agreement between Exhibit 10.6 to Registrant's 1994 10-K
Richard Gribbins and the Registrant
dated July 18, 1994

10.6* Nonstatutory Stock Option Agreement Exhibit 10.7 to Registrant's 1994 10-K
for the Benefit of Terrell L. Ruhlman

10.7* Amendment to Employment Agreement X
between Richard Gibbins and the
Registrant dated May 11, 1995

10.8* Employment Agreement between Richard X
A. Lund and the Registrant dated
May 2, 1995

10.9* Nonstatutory Stock Option Agreement X
dated December 30, 1994 for the
Benefit of Richard Gibbins

10.10 Collective Bargaining Agreement effective X
March 15, 1995 between Auto-Air
Composites, Inc. and Lodge No. 2184,
International Association of Machinists

10.11* Cade Industries, Inc. 1990 Exhibit 10.10 to Registrant's 1989 10-K
Nonqualified Stock Option Plan
("1990 Stock Option Plan")

10.12* Amendment No. 1 to Exhibit 10.18 to Registrant's 1991 10-K
1990 Stock Option Plan

10.13* Cade Industries, Inc. 1994 Stock Option Exhibit 10.13 to Registrant's 1994 10-K
Plan ("Director Stock Option Plan")

10.14* Form of Option Agreement under Exhibit 10.14 to Registrant's 1994 10-K
Director Stock Option Plan

13.1 Portions of 1995 Annual Report X
to Shareholders

21.1 Subsidiaries of the Registrant X

23.1 Consent of Ernst & Young LLP to X
incorporation by reference

23.2 Consent of Deloitte & Touche LLP to X
</TABLE>

-15-
<PAGE> 16
<TABLE>
<CAPTION>
Exhibit Incorporated herein Filed
No. Description by reference to: Herewith
- ------- ----------- ------------------- --------
<S> <C> <C> <C>
incorporation by reference

27 Financial Data Schedule X
</TABLE>

* Management contract or compensatory plan or arrangement required to be
filed pursuant to Item 14(c) of Form 10-K.

-16-

<PAGE> 1

Exhibit 4.3
Cade 1995 10-K
<PAGE> 2
AMENDMENT NO. 2 TO AMENDED AND RESTATED
REVOLVING CREDIT AND TERM LOAN AGREEMENT

THIS AMENDMENT NO. 2 dated as of June 1, 1995, by and between CADE
INDUSTRIES, INC., a Wisconsin corporation, of Lansing, Michigan ("Company") and
COMERICA BANK, a Michigan banking corporation (successor in interest by reason
of merger to Manufacturers Bank, N.A., f/k/a Manufacturers National Bank of
Detroit) of Detroit, Michigan ("Bank").

WITNESSETH:

WHEREAS, Company and Bank entered into that certain Loan Agreement
dated January 30, 1995, as previously amended on March 3, 1995 ("Agreement")
pursuant to which Company issued a promissory note dated April 1, 1995, made in
the principal amount of $5,000,000 payable to Bank ("Revolving Credit Note")
and

WHEREAS, Company and Bank desire to amend the Agreement and replace the
Revolving Credit Note.

NOW, THEREFORE, the parties agree as follows:

1. Sections 1.A.1 and 1.A.2 of the Agreement is amended in their
entirety to read as follows:

"1.A.1 Bank agrees to lend to Company at any time and from time to
time from the effective date hereof until April 1, 1996 sums not to exceed Five
Million Dollars ($5,000,000) in aggregate principal amount at any one time
outstanding. The borrowings hereunder shall be evidenced by a Revolving Credit
Note (herein called "Revolving Credit Note") in form similar to that annexed
hereto as Exhibit "A" under which advances, repayments and readvances may be
made, subject to the terms and conditions of this Agreement; provided, however,
the Bank shall have no obligation to make any advances with respect to the
revolving credit."

"1.A.2. The principal indebtedness represented by the Revolving Credit
Note and all interest thereon shall be payable on or before April 1, 1996.
Company agrees to pay interest on the unpaid principal balance of the Revolving
Credit Note from time to time outstanding at a per annum rate equal to Bank's
Prime Rate (as defined below). Upon the occurrence of any event of default
hereunder and maturity of the Revolving Credit Note (whether at stated maturity
or by acceleration), interest shall accrue on the unpaid principal balance at
the per annum rate of three percent (3%) above Bank's Prime Rate. Interest
shall be payable quarterly commencing on the first day of each July, October,
January and April thereafter. Interest shall be computed on a daily basis
using a year of 360 days and assessed for the actual number of days elapsed,
and in such computation effect shall be given to any change in the interest
rate resulting from a change in the Prime Rate on the date of such change in
the Prime Rate. "Prime Rate" shall mean the rate of interest established by
Bank as its prime rate for its borrowers as the same may be changed from time
to time, which may not necessarily be Bank's lowest rate for loans."

2. Exhibit "A" is replaced by the form of Exhibit "A" annexed
hereto.

3. Company shall be responsible for all costs and expenses
incurred by Bank, including, without limitation, reasonable attorneys' fees,
with regard to the preparation and execution of this Amendment.

4. The execution of this Amendment shall not be deemed to be a
waiver of any event of default, or any condition or event which, with the
giving of notice, the running of time, or both, would constitute an event of
default, under the Loan Agreement.

5. Company hereby represents and warrants that, after giving
effect to the amendments contained herein, (a) execution, delivery and
performance of this Amendment, and any other documents and instruments required
under this Amendment or Loan Agreement, are within Company's corporate powers
have been duly authorized, are not in contravention of law or the terms of
Company's Articles of Incorporation or Bylaws, and do not require the consent
or approval of any governmental body, agency or authority; and this Amendment
and any other documents and instruments required under this Amendment or the
Loan Agreement, will be valid and binding in accordance with their terms; (b)
the continuing representations and warranties of Company set forth in Sections
3.1 through 3.6 and in Sections 3.8 through 3.15 of the Loan Agreement are true
and correct on and as of the date hereof with the same force and effect as if
made on and as of the date hereof (c) the representations and warranties of
Company set forth in Section 3.7 of the Loan Agreement are true and correct as
of the date hereof with respect to the most recent
<PAGE> 3
financial statement furnished to Bank by Company in accordance with the terms
of the Loan Agreement; and (d) no event of default, or any condition or event
which, with the giving of notice or the running of time, or both, would
constitute an event of default, has incurred and is continuing or exists under
the Loan Agreement as of the date hereof.

6. Capitalized terms used but not otherwise defined herein shall
have the respective meanings given to them in the Loan Agreement.

7. Company waives, discharges, and forever releases Bank, Bank's
employees, officers, directors, attorneys, stockholders, and their respective
successors and assigns, from and of any and all claims, causes of action,
allegations or assertions that Company has or may have had at any time up
through and including the date of this Amendment, against any or all of the
foregoing, regardless of whether any such claims, causes of action, allegations
or assertions are known to Company or whether any such claims, causes of
action, allegations or assertions arose as a result of Bank's actions or
omissions in connection with the Loan Agreement, or any amendments, extensions
or modification thereto, or in any way relating to the transaction contemplated
thereby, or Bank's administration of the debt evidenced by the Loan Agreement,
or otherwise.

8. This Amendment shall be effective as of the date hereof.

9. Except as modified hereby, all of the terms and conditions of
the Loan Agreement shall remain in full force and effect, and all of Company's
liabilities and obligations thereunder are hereby ratified, confirmed and
restated.

IN WITNESS WHEREOF the parties execute this Agreement as of the date
set forth above.

COMERICA BANK CADE INDUSTRIES, INC.

By: /s/ Lori M. Fisher By: /s/ Edward B. Stephens
--------------------- ----------------------

Its: V.P. Its: Vice President
--------------------- ----------------------

<PAGE> 1
Exhibit 10.7
1995 Cade 10-K
<PAGE> 2
CADE
- --------------------------------------------------------------------------------
CADE INDUSTRIES, INC.

May 11, 1995

Mr. Richard Gibbins
H.A.C. Corporation
Box 531166
537 Camden Drive
Grand Prairie, TX 75051

Dear Richard:

This is to confirm our discussion and agreement regarding the extension of your
existing contract for a period of six months commencing on January 1, 1996 to
June 30, 1996. The parties agree that the contract shall be extended for the
period referenced above, and the following modifications shall be included in
the agreement.

1. Cade Industries shall reimburse you for moving expenses associated with
moving your belongings from Illinois to Dallas, Texas and the expense
incurred in moving back to Illinois at the end of this Agreement.

2. The incentive plan for 1996 shall be established according to the
existing contract. The incentive shall be paid out at the conclusion
of the 1996 earnings release for Cade and shall be pro-rated for the
number of actual months employed.

3. The Company agrees to provide a monthly housing allowance of an
additional $325.00 for the period July 1, 1995 - December 31, 1995 and
to increase that amount of $650.00 for the period January 1, 1996 -
June 30, 1996. These amounts will be in addition to the existing
amount of $1,250.00 per month under the current contract.

This amendment shall be binding upon the parties by returning the signed
document, and the contract shall be extended as modified above for a period of
six months.

Sincerely,

CADE INDUSTRIES, INC.

(/s/ Richard A. Lund)

Richard A. Lund
President and C.O.O.

RAL/sm
<PAGE> 3
Signed and agreed to this 12th day of June , 1995
------- ------------

By: /s/ Richard A. Lund
-------------------------------
Richard A. Lund
President & COO

Signed and agreed to this 10th day of June , 1995.
-------- ---------------

By: /s/ Richard J. Gribbins
-------------------------------

<PAGE> 1
Exhibit 10.8
Cade 1995 10-K
<PAGE> 2
EMPLOYMENT AGREEMENT
This employment agreement (the "Agreement") is entered into as of the 2nd
day of May, 1995, by and between CADE INDUSTRIES, INC. (the "Company") and
RICHARD A. LUND ("Executive").

WHEREAS, the Company desires to employ the services of Executive, and
Executive desires to accept such employment, upon the terms set forth herein;
and

WHEREAS, prior to the date hereof, Executive was employed by Company as its
President and Chief Operating Officer and as Chief Executive Officer of its
Auto-Air Composites, Inc. subsidiary ("Auto-Air");

NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, Executive and Company agree as follows:

1. EMPLOYMENT. Company hereby employs Executive its President and
Chief Operating Officer and in such other positions with the Company or its
subsidiary corporations as the Company's Board of Directors may from time to
time direct, and Executive hereby accepts such employment.

(a) DUTIES AND SERVICES. Executive agrees to serve Company and
to perform such services and duties as are appropriate to the capacities in
which he is employed. Executive agrees that he shall devote substantially all
of his working time, attention and efforts solely and exclusively to such
employment and will perform his duties and services faithfully, diligently and
to the best of his ability, and will use his very best efforts to promote the
interests of the Company. Executive shall report to the Board of Directors of
the Company or such other person or persons as the Board of Directors of the
Company shall authorize. Executive shall assist in preparation of budgets and
business strategic plans, assist in the preparation and implementation of and
be responsible for achievement of the Company's goals and objectives, and
perform such other services for the Company or its other subsidiaries as
directed by the Company's Board of Directors.

(b) ADHERENCE TO RULES AND LAWS. Executive specifically agrees
to support, implement and observe corporate policies and guidelines established
by the Company's Boards of Directors. Executive agrees to abide by all
applicable laws and governmental regulations relating to the Company's business
and to promote compliance therewith by employees, agents and representatives
under his direction and control. Executive acknowledges that he may be given
or have access to material nonpublic information with respect to the Company
and as such is subject to the restrictions imposed under the Securities and
Exchange Act of 1934 and other federal and state laws with respect to trading
in the Company's securities while in possession of such information, and with
respect to the disclosure of such information.

(c) EMPLOYMENT TERM. The term of Executive's active employment
shall commence on the date above first written and shall continue until his
resignation or termination by the Board of Directors (the "Employment Term").

(d) COMPENSATION. As the total compensation for services to be
rendered by Executive during the Employment Term in all capacities in which
employed, Company agrees to pay Executive, and Executive agrees to accept:

(i) BASE SALARY. An initial base salary (the "Base
Salary") of $168,000 per annum, payable in equal monthly
installments; said initial base salary to be reviewed annually by
the Board of Directors.
<PAGE> 3
(ii) INCENTIVE BONUS. In addition to Executive's Base
Salary, the Board of Directors of the Company shall annually
consider the payment of a bonus, not to exceed 50% of Executive's
Base Salary, to Executive, the amount of which, if any, shall be
determined by a quantitative incentive plan agreed to by Executive
and the Board of Directors.

(iii) OTHER BENEFITS.

A. Executive shall be entitled to participate
in group life insurance, medical and hospitalization plans and
pension plans, as such may be afforded by the Company or Auto-Air
generally to its officers and employees.

B. Company shall reimburse Executive in
accordance with its standard practice applicable to executive
officers for necessary and reasonable business expenses incurred by
Executive in performing his duties hereunder. In addition, Company
shall reimburse Executive for membership dues at one club or
country club of his choice in the Lansing, Michigan area.

C. During the Employment Term, Executive shall
be entitled to four weeks of vacation with full pay each year.
Vacation time must be taken at a time which does not unreasonably
interfere with the conduct of the Company's business. Vacation may
be accumulated by Executive, up to an aggregate of eight weeks, to
be taken in future years, but is the intent of the Company that
Executive take not less than two weeks of vacation in each year.

D. Company shall provide to Executive, an
American automobile suitable to his position and an automobile
allowance for actual expenses incurred in connection therewith.
Executive shall be entitled to a new automobile every three years.

2. STOCK OPTIONS. Executive shall be eligible to receive such option
awards as may be provided from time to time by the Company's Board of Directors
or the Compensation Committee thereof.

3. RESTRICTIVE COVENANTS AND CONFIDENTIALITY. As a condition to the
performance by Company of its obligations hereunder:

(a) Executive shall, during the Employment Term, promptly
advise the Board of Directors of any business opportunity ("Business
Opportunity") of which he becomes aware. Business Opportunity means any
person, corporation or other entity which requires or is seeking to acquire
services, goods, materials or products of the nature provided by the Company or
any of its subsidiaries; any potential acquisitions of other businesses or
entities or assets; or any inquiries concerning acquisition of the Company, or
any of its subsidiaries, divisions, or assets.

(b) Executive agrees that at all times during the Employment
Term and for two years thereafter he will not directly or indirectly, through
any person, corporation or other entity (whether as an employee, officer,
director, consultant or otherwise), (i) in any manner solicit business from or
divert from the Company or any of its subsidiaries the business of any client
or customer of Company or any of its subsidiaries which was a client or
customer, or which was identified by the Company or any of its subsidiaries as
a prospective client or customer, during the Employment Term; nor (ii) solicit,
entice or induce any person who is or shall be an employee or officer of the
Company or any of its subsidiaries to become employed by any other person,
corporation or entity; provided, however, that after the termination of his
employment with the Company, Executive may engage in any business activity
unrelated to the business activities of the Company or its subsidiaries.
<PAGE> 4
(c) Because the Company and Auto-Air have utilized and the
Company and its subsidiaries will, during the Employment Term, utilize the
services of Executive in areas of responsibility involving trust and
confidence, and because Executive will from time to time obtain knowledge with
respect to the conduct of the business of the Company or its subsidiaries and
with respect to the clients and customers of the Company and its subsidiaries
which is not generally known in the trade or industry in which the Company, its
subsidiaries, client or customers, as the case may be, are engaged or which the
Company may deem confidential and proprietary, Executive agrees that at all
times during the Employment Term and after the termination of his employment
relationship with Company, he will take such reasonable steps as are necessary
to maintain the confidentiality of such information and that he will not,
unless authorized by Company in writing, directly or indirectly disclose to, or
for the benefit of, any other person, firm or corporation any information of
any kind concerning any matters affecting or relating to the business of the
Company, its subsidiaries, clients and customers, including, without
limitation, information concerning the business of the Company, its
subsidiaries, customers, manner of operation, plans, procedures or other data
of any kind or nature. The parties hereto stipulate that such information is
(i) material to the conduct of the business of the Company and its
subsidiaries, (ii) confidential, and (iii) proprietary to the Company, and that
disclosure of such information would have a serious adverse effect on the
effective and successful conduct of the business and good will of the Company
and its subsidiaries. All documents, records and copies thereof regarding the
operations or business of the Company or its subsidiaries, whether prepared by
Executive or others, and all information which might be given to Executive or
to which he has access in the course of his employment, are and shall remain
the exclusive property of the Company. Any documents in Executive's possession
upon termination of employment shall be delivered immediately to the Company.

(d) Executive further agrees that he shall not, during his
Employment Term, nor within one year after termination of his employment with
Company, without the prior written approval of Company's Board of Directors,
directly or indirectly, through any person, firm or corporation (whether as an
employee, officer, director, consultant or otherwise), (i) except in the event
of termination by the Company under Paragraph 4(a), have any financial interest
in or render any services to any person, firm or corporation (other than
another subsidiary of Company) in competition with Company or any of its
subsidiaries in any region in which business is conducted by Company or any of
its subsidiaries during Employment Term; nor (ii) render services to any
Business Opportunity of which he has learned (A) during the Employment Term
unless he shall have advised Company of such Business Opportunity in accordance
with subsection (a) of this paragraph 3.

4. TERMINATION OF EMPLOYMENT.

(a) TERMINATION WITHOUT CAUSE. Executive's employment
hereunder may be terminated for any reason at any time upon the giving of six
months written notice by Executive or one year's written notice by the Company.
In the event that notice is given by either party, Company may elect to
terminate Executive's duties and functions with the Company and its
subsidiaries before the expiration of the notice, but will be obligated to pay
the benefits provided in paragraph 1 until the end of the notice period.

(b) TERMINATION FOR CAUSE, DEATH OR DISABILITY. Executive's
employment hereunder may be terminated immediately by Company for "Cause" and
shall terminate on the date of occurrence in the event of the death or
"Disability" of Executive. Such termination shall be subject to the following
terms:

(i) In the event Executive's employment is terminated
by Company for "Cause," Executive shall be paid his Base Salary
until the date of termination and all other benefits (except any as
may be required by law with respect to medical insurance coverage)
shall thereupon cease.
<PAGE> 5
(ii) In the event Executive dies or is disabled and
unable to perform services for Company, he or his personal
representative shall be paid his Base Salary and benefits through
the Employment Term and for six months thereafter.

As used in this Agreement, the term "Cause" shall mean material
theft from Company or its subsidiaries; substantial and continuing willful
failure to perform Executive's duties; violation of a material provision of this
Agreement; or intention and material misrepresentation to the Board of
Directors. As used in this Agreement, "Disability" shall mean a physical or
mental illness, injury, incompetency or incapacity, which renders Executive
incapable of fully performing the services required of Executive as an executive
of Company and which does or may be expected to continue during the remainder of
his life. Determination of Disability and the date upon which it shall be
deemed to have occurred shall be made by a physician who is acceptable to both
Company and Executive. Such determination shall be binding on all parties to
this Agreement. In the event Company and Executive do not agree upon a
physician, they shall each name a physician and the two physicians shall name a
third physician who shall conduct the examination and make the determination as
to whether Executive suffered a disability.

5. ASSIGNABILITY OF BINDING EFFECT; CHANGE OF CONTROL.

(a) This Agreement shall inure to the benefit of and shall be
binding upon the heirs, executors, administrators, successors and legal
representatives of Executive, and shall inure to the benefit of and be binding
upon Company and its successors and assigns, including any successor to
substantially all of the assets and business of Company as a going concern.
The provisions of Section 3 of this Agreement shall survive termination of this
Agreement for the periods set forth herein and shall be specifically
enforceable by any successor or assign of the Company. Neither Executive's
rights under this Agreement nor the obligations of Executive hereunder may be
delegated or assigned.

(b) In the event that there is a change of control (as
hereinafter defined) of the Company on any date subsequent to May 2, 1995, and
the employment of Executive by the Company is terminated within one year of the
change of control for any reason, including termination without cause,
termination for cause, death disability or voluntary resignation, Executive
shall be paid an amount equal to his compensation from the Company for the
preceding year, including any bonus, insurance and other benefits. Except as
to a person who was a beneficial owner of at least 20% of the Company's
outstanding common stock on May 2, 1995, the term "change of control" as used
herein means the acquisition by any person or group of beneficial ownership of
more than 30% of the Company's outstanding common stock (or, if the Company
shall have outstanding more than one class of equity securities, an aggregate
of 30% of the voting securities of the Company). For purposes of determining
the definition of person, group, and beneficial ownership, the provisions of
Rule 13(d)-3 under the Securities and Exchange Act of 1934 shall apply.

6. ENTIRE AGREEMENT. This Agreement constitutes the complete
understanding between Company and Executive with respect to the subject matter
hereof, and no statement, representation, warranty or covenant has been made by
either party except as expressly set forth herein. This Agreement may not be
altered, modified or amended except by written instruments signed by each of
the parties hereto. No waiver of any term or provision hereof shall be
effective unless made in a writing signed by the party against whom enforcement
of the waiver is sought. No waiver of any term or provision of this Agreement
shall be deemed to be a waiver of any subsequent breach of such term or
provision, or the breach of any other term or provision hereof.

7. SEVERABILITY. If any provision of this Agreement or any part
thereof is invalid, unlawful or incapable of being enforced, by reason of any
rule of law or public policy, all conditions and provisions of this Agreement
shall nevertheless remain in full force and effect.
<PAGE> 6
8. WARRANTY. Executive warrants and represents that he is not a party
to any agreement, contract or understanding which would in any way restrict or
prohibit him from undertaking or performing employment in accordance with the
terms and conditions of this Agreement.

9. GOVERNING LAW. This Agreement shall be
governed by, construed in accordance with, and enforced under the laws of
the State of Michigan.

10. NOTICES. All communications or notices required or permitted by
this Agreement shall be in writing and shall be deemed to have been given at
the earlier of the date when actually delivered to the persons named below or
when deposited in the United States mail, certified or registered mail, postage
prepaid, return receipt requested, and addressed as follows, unless either of
the parties hereto notify the other in accordance with this section of a change
of address:

If to the Company: Cade Industries, Inc.
Attn: Terrell L. Ruhlman
5640 Enterprise Drive
Lansing, MI 48911

With Copy To: Quarles & Brady
Attn: Conrad G. Goodkind
411 East Wisconsin Avenue
Milwaukee, WI 53202-4497

If to Executive: Richard A. Lund
Cade Industries, Inc.
5640 Enterprise Drive
Lansing, MI 48911

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date above first written.

CADE INDUSTRIES, INC.

By:
--------------------------------------
Terrell L. Ruhlman, Chairman
of the Board of Directors

RICHARD A. LUND

-----------------------------------------

<PAGE> 1
Exhibit 10.9
Cade 1995 10-K
<PAGE> 2
CADE INDUSTRIES, INC.
STOCK OPTION AGREEMENT

Option granted on December 30, 1994, by Cade Industries, Inc., a Wisconsin
corporation (hereinafter called the "Company"), to Richard Gribbins
(hereinafter called the "Optionee").

W I T N E S S E T H:

WHEREAS, the Board of Directors of the Company, desiring to provide
increased incentives for employees of the Company and any present or future
Subsidiary of the Company and desiring to facilitate the efforts of the Company
and its Subsidiaries to obtain and retain employees of outstanding ability, has
granted to Richard Gribbins an option to purchase Company stock on the terms
provided herein;

NOW, THEREFORE, it is agreed as follows:

1. Number of Shares Optioned; Option Price. The Company grants to the
Optionee the right and option to purchase, on the terms and conditions hereof,
11,450 shares of the presently authorized Common Stock of the Company, $0.001
par value, at $0.656 per share.

2. Vesting. Options with respect to such shares shall vest
immediately.

3. Termination of Employment or Service. If Optionee shall cease to
be employed by the Company or a Subsidiary because of a termination of his
employment by the Company, Optionee may, at any time within one year of such
termination, but in no event later than the date of expiration of this Option,
exercise this Option to the extent Optionee was entitled to do so on the date
of such termination. If Optionee shall cease to be employed by the Company or
a Subsidiary for a reason other than termination by the Company or death,
Optionee may, at any time within three (3) months of such termination of
employment, but in no event later than the date of expiration of this Option,
exercise this Option to the extent Optionee was entitled to do so on the date
of such termination. Any portion of this Option not so exercised shall
terminate.

4. No Right to Continued Employment or Service. This Agreement does
not confer upon Optionee any right to continue in the employ or service of the
Company or a Subsidiary, nor does it impair any right the Company or any
Subsidiary may have to terminate Optionee's service or employment at any time.

5. Death of Optionee. If Optionee dies before exercise of this
Option, this Option shall be exercisable by the person or persons to whom the
Option is transferred by will or the laws of descent and distribution to the
extent Optionee would have been entitled to do so on the date of death at any
time within one year after the date of death, but not later than the expiration
date provided in paragraph 9. Any portion of this Option not so exercised
shall immediately expire.

6. Deferral of Exercise. Although the Company intends to exert its
best efforts so that the shares purchasable upon the exercise of this Option
will be registered under, or exempt from
<PAGE> 3
the registration requirements of, the federal Securities Act of 1933 (the
"Act") and any applicable state securities law at the time this Option first
becomes exercisable, if the exercise of this Option would otherwise result in a
violation by the Company of any provision of the Act or of any state securities
law, the Company may require that such exercise be deferred until the Company
has taken appropriate action to avoid any such violation.

7. Method of Exercising Option. This Option shall be exercised by
delivering to the Company, at its principal executive office, a written notice
of the number of shares with respect to which the Option is at the time being
exercised and by paying the Company in full the option price of the shares
being acquired at the time.

8. Method of Payment. Payment shall be made either (i) in cash or
(ii) if permitted by the Committee, by delivering shares of the Company's
Common Stock which have been beneficially owned by the Optionee, the spouse of
the Optionee, or both of them for a period of at least six months prior to the
time of exercise ("Delivered Stock") or (iii) if permitted by the Committee, by
delivering a combination of cash and Delivered Stock. Payment in the form of
Delivered stock shall be in the amount of the Fair Market Value of the stock at
the date of exercise, determined in accordance with paragraph 11.

9. Expiration Date. This Option shall expire on December 30, 1999,
unless earlier terminated under paragraph 3 or 5 hereof.

10. Withholding Taxes. The Company may require, as a condition to the
exercise of this Option, that the Optionee concurrently pay to the Company any
taxes which the Company is required to withhold by reason of such exercise. In
lieu of part or all of any such payment, the Optionee may elect, if permitted
by the Committee, and subject to such rules and regulations as the Committee
may adopt from time to time, to have the Company withhold from the shares to be
issued upon exercise that number of shares having a Fair Market Value,
determined in accordance with paragraph 11, equal to the amount which the
Company is required to withhold.

11. Method of Valuation of Stock. The "Fair Market Value" of the
Common Stock of the Company on any date for the purpose of this Agreement is
deemed to be the average of the highest and lowest sale prices of the stock on
such date as reported by NASDAQ (the National Association of Securities
Dealers, Inc. Automated Quotation System). However, if at any time the Common
Stock is listed on any exchange, the "Fair Market Value" Shall be the average
of the reported highest and lowest prices at which shares are sold on such
exchange. In the absence of reported sales on NASDAQ or on such exchange on
said date, the "Fair Market Value" shall be the average of the last reported
bid and asked quotations for the shares on NASDAQ or such exchange.

12. No Rights in Shares Until Certificates Issued. Neither the
Optionee nor his heirs nor his personal representative shall have any of the
rights or privileges of a stockholder of the Company in respect of any of the
shares issuable upon the exercise of the option herein granted, unless and
until certificates representing such shares shall have been issued.

-2-
<PAGE> 4
13. Option Not Transferable During Optionee's Lifetime. This Option
shall not be transferable by the Optionee other than by his will or by the laws
of descent and distribution and shall be exercisable during his lifetime only
by him.

14. Prohibition Against Pledge, Attachment, etc. Except as otherwise
herein provided, the Option herein granted and the rights and privileges
pertaining thereto shall not be transferred, assigned, pledged or hypothecated
in any way (whether by operation of law or otherwise) and shall not be subject
to execution, attachment or similar process.

15. Changes in Stock. In the event there are any changes in the Common
Stock of the Company through merger, consolidation, reorganization,
recapitalization, stock dividend, stock split, combination or exchange of
shares, rights offering or any other change affecting the Common Stock of the
Company, appropriate changes may be made by the Committee, in the aggregate
number of shares and the purchase price and kind of shares subject to this
Option, to prevent substantial dilution or enlargement of the rights granted to
or available for Optionee.

16. Dissolution or Merger. Anything contained herein to the contrary
notwithstanding, upon the dissolution or liquidation of the Company, or upon
any merger in which the Company is not the surviving corporation, at any time
prior to the expiration date or the termination of this Option, the Optionee
shall have the right within sixty (60) days prior to the effective date of such
dissolution, liquidation or merger, to surrender all or any unexercised portion
of this Option to the Company for cash, subject to the discretion of the
Committee as to the exact timing of said surrender, regardless of whether this
Option was then exercisable under the provisions of paragraph 2 hereof.
Notwithstanding the foregoing, however, in the event Optionee has retired,
Optionee's right to surrender all or any unexercised portion of this Option
under this paragraph shall be available only to the extent that at the time of
such retirement, Optionee would have been entitled to exercise this Option
under paragraph 2 hereof. The amount of cash to be paid to Optionee for the
portion of this Option so surrendered, shall be equal to the number of shares
of Common Stock subject to the surrendered Option multiplied by the difference
between the option price per share, as described in paragraph 1 hereof, and the
Fair Market Value per share, determined in accordance with paragraph 11 hereof,
as of the time of surrender.

17. Notices. Any notice to be given to the Company under the terms of
this agreement shall be addressed to the Company in care of its Secretary, and
any notice to be given to the Optionee may be addressed to him at his address
as it appears on the Company's records, or at such other address as either
party may hereafter designate in writing to the other. Any such notice shall
be deemed to have been duly given if and when enclosed in a properly sealed
envelope addressed as aforesaid, and deposited, postage prepaid, in the United
States mails.

18. Provisions of Plan Controlling. This Option is subject in all
respects to the provisions of the Plan. In the event of any conflict between
any provisions of this Option and the provisions of the plan, the provisions of
the Plan shall control. Terms defined in the Plan where used herein shall have
the meanings as so defined. Optionee acknowledges receipt of a copy of the
Plan.

-3-
<PAGE> 5
IN WITNESS WHEREOF, the Company has caused these presents to be executed on
its behalf by its President or Chairman and to be sealed with its corporate
seal, and attested by its Secretary and the Optionee has hereunto set his hand
and seal, all as of the day and year first above written, which is the date of
the granting of the option evidenced hereby.

CADE INDUSTRIES, INC.

By: /s/ Richard A. Lund
------------------------------------
Richard A. Lund, President

By: /s/ Molly F. Cade
------------------------------------
Molly F. Cade, Director and
Member of Stock Option Committee

ATTEST: /s/ Conrad Goodkind
--------------------------------
Conrad G. Goodkind
Secretary

OPTIONEE:

/s/ Richard Gribbins
----------------------------------------
Richard Gribbins

-4-

<PAGE> 1
Exhibit 10.10
Cade 1995 10-K
<PAGE> 2
AGREEMENT

between

AUTO-AIR COMPOSITES, INC.
OF LANSING, MICHIGAN

and

LODGE NO. 2184
INTERNATIONAL ASSOCIATION
OF MACHINISTS

March 15, 1995
<PAGE> 3
INDEX
<TABLE>
<CAPTION>
ARTICLE TITLE PAGE
- -------------------------------------------------------------------------------
<S> <C> <C>
Preamble . . . . . . . . . . . . . . . . . . . 1
Equal Employment Opportunity . . . . . . . . . 1

Management Rights . . . . . . . . . . . . . . 1

I Appropriate Bargaining Unit . . . . . . . . . 2

II Recognition and Union Shop . . . . . . . . . . 2

III Coverage . . . . . . . . . . . . . . . . . . . 4

IV Check-Off . . . . . . . . . . . . . . . . . . 4

V Representative . . . . . . . . . . . . . . . . 5

VI Grievance Procedure . . . . . . . . . . . . . 7
Policy Grievances . . . . . . . . . . . . . . 8

VII Seniority . . . . . . . . . . . . . . . . . . 9
Job Bid Procedure . . . . . . . . . . . . . . 12
Training Procedure . . . . . . . . . . . . . . 14
Shift Preference . . . . . . . . . . . . . . . 16
Part Time, Temporary and Student Employees . . 16

VIII Leaves of Absence . . . . . . . . . . . . . . 17

IX Work Day, Work Week, Overtime Pay and
Shift Premium . . . . . . . . . . . . . . . 19

X Reporting Time and Call Back Time . . . . . . 22

XI Paid Holidays . . . . . . . . . . . . . . . . 23

XII Group Insurance, Hospital and Welfare Plan . . 24

XIII Classification and Minimum Rates of Pay . . . 27

XIV Vacations . . . . . . . . . . . . . . . . . . 28

XV Safety and Sanitation . . . . . . . . . . . . 30

XVI Funeral Leave . . . . . . . . . . . . . . . . 31

</TABLE>
<PAGE> 4
INDEX
<TABLE>
<CAPTION>
ARTICLE TITLE PAGE
- -------------------------------------------------------------------------------
<S> <C> <C>
XVII General Provisions . . . . . . . . . . . . . . 32

XVIII Leadman and Leadwoman . . . . . . . . . . . . 35

XIX Alteration of Agreement . . . . . . . . . . . 35

XX Obligation for Continuation of Service . . . . 36

XXI Employment Pension Plan . . . . . . . . . . . 36

XXII Profit Sharing Plan . . . . . . . . . . . . . 38

XXIII Cost of Living Allowance . . . . . . . . . . . 40

Classification and Rates of Pay . . . . . . . 42
Exhibit "B" . . . . . . . . . . . . . . . . . 46
Progression Rates of Pay . . . . . . . . . . . 47
Merit Progression . . . . . . . . . . . . . . 47

XXIV Duration and Term of Agreement . . . . . . . . 50

Letters of Understanding . . . . . . . . . . . 51

Attachment #1 . . . . . . . . . . . . . . . . 54

Exhibit "C" . . . . . . . . . . . . . . . . . 56

</TABLE>
<PAGE> 5
AGREEMENT
PREAMBLE

This Agreement made and entered into this 15th day of March, 1995. By
and between the AUTO-AIR COMPOSITES, INC., OF LANSING, MICHIGAN, hereinafter
referred to as the "Company" and Lodge No. 2184 of the INTERNATIONAL
ASSOCIATION OF MACHINISTS, AFL-CIO, hereinafter referred to as the "Union".

The purpose and intent of the Agreement is to promote harmonious
industrial labor relations between the Company and the Union, in all matters
pertaining to wages, hours, rates of pay, working conditions and other
conditions of employment and the handling and adjustment of grievances.

EQUAL EMPLOYMENT OPPORTUNITY

The Company shall provide equal employment opportunity without regard to race,
color, religion, sex, national origin, height, weight, handicap unrelated to
employment, or marital status. Equal employment opportunities shall relate to
all phases of employment, including, but not limited to, recruitment, hiring,
placement, promotion, demotion or transfer, layoff, recall, discipline and
discharge, rates of pay benefits, selection for training, and use of
facilities. Affirmative action shall be taken to ensure the fulfillment of
equal employment opportunity, consistent with the requirements and objectives
set forth by Presidential Executive Order 11246, Title VII of the Civil Rights
Act of 1964, the Age Discrimination in Employment Act of 1967, the Equal Pay
Act of 1963, the Vocational Rehabilitation Act of 1973, the Elliot-Larsen Civil
Rights Act, and the Michigan Handicappers, Civil Rights Act.

MANAGEMENT RIGHTS

Subject to the terms and provisions of this Agreement the Company reserves and
retains all rights to manage and operate the Company's operations and business
affairs.

The Company hereby retains and reserves onto itself, all powers, rights,
duties, and responsibilities conferred upon and vested in it the laws and the
constitutions of the State of Michigan and of the United States.

The Company hereby agrees that in exercising any of the above rights it will
not violate this Agreement and/or any addendum that may attach thereto.

-1-
<PAGE> 6
ARTICLE I

APPROPRIATE BARGAINING UNIT

1.1

The appropriate unit for the purpose of collective bargaining under the
Agreement shall be "all full time, and part-time, production and maintenance
employees of the Company, but excluding office clerical employees, plant
executives, engineering department employees, students employed a maximum of
fifteen (15) hours per week or less, supervisors, foremen and guards as defined
in the Act". The Company shall not employ more than three (3) such students and
shall not allow them to work overtime and they shall be laid off before any
bargaining unit employees are laid off.

Moreover, the students' rate of pay shall not exceed the minimum rate as
provided in Exhibit A of this Agreement and their work will be confined to
non-production areas.

1.2

The Company will bargain collectively with the Union in respect to wages,
hours, rates of pay and all other conditions pertaining to employment for all
the employees in the appropriate unit hereinafter set forth.

1.3

The bargaining unit described above, shall include among others, all employees
engaged in the making, assembling, erecting, dismantling and repairing of all
machinery, tools, fixtures and equipment and/or parts thereof, of all
descriptions by the Company, on or off its premises.

ARTICLE II

RECOGNITION AND UNION SHOP

2.1

The Company recognized the Union as the sole and exclusive bargaining
representative of all the employees in the "appropriate unit" described above
for the purpose of collective bargaining under the terms and conditions of this
Agreement.

2.2

All present employees covered by this Agreement who are members of the Union on
the effective date of this Agreement shall remain members in good standing as a
condition of continued employment; and, all present employees covered by this

-2-
<PAGE> 7
Agreement who are not members of the Union on the effective date of this
Agreement and all employees who are hired hereafter shall become and remain
members of the Union in good standing as a condition of continued employment on
the sixtieth (60) day worked following the beginning of their employment, or on
the sixtieth (60) day worked following the effective date of this Agreement,
whichever the case may be. Membership in the Union for the purpose of the above
provision is defined to mean the payment of the Union initiation fee,
reinstatement fee if applicable, and periodic membership dues uniformly
required of all members.

2.3

The Company will, within five (5) working days, after receipt of notice from
the Union, discharge any employee who is not in good standing in the Union, as
required by the preceding paragraph.

2.4

When new employees are hired, the Company shall furnish the Union, within five
(5) days the name of the new employees, the starting rate of pay,
classification and shift on which the new employee will work and the job to be
performed by the new employee.

2.5

The Union shall indemnify and save the Employer harmless against any and all
claims, demands, suits, costs or other forms of liability of any kind or nature
that may arise out of or by reason of action by the Employer taken for purposes
of complying with this or any other Article related to Union security,
expressly excluding, however, any damages, suits, or other forms of liability
which are the proximate result of the Employer's own negligence and/or fault.

In consideration for this "save harmless" and/or indemnification clause, the
Company agrees that the Union shall maintain the exclusive right to defend,
settle, mitigate damages, litigate and/or take whatever action is necessary or
it deems proper with respect to a person who sues the Company under the
National Labor Relations Act through attorneys of its own choosing and at its
own discretion, but, in any event, if the Company unilaterally determines that
it desires attorneys to represent it in defense of such actions, it shall do so
at its own cost and not at the cost of the Union. It is further agreed that the
Company shall promptly notify the Union of any such action when and if filed
and the Union shall, at its own option, defend such actions and/or settle under
the circumstances above described.

-3-
<PAGE> 8
ARTICLE III

COVERAGE

3.1

The provision of this Agreement shall be binding upon the Company and its
successors and assigns and all of the terms and obligations herein contained
shall not be affected or changed in any respect by the consolidation, merger,
sale, transfer or assignment of the Company of any, or all, of its property, or
affected or changed in any respect by any change in the legal status, ownership
or management of the Company.

3.2

This Agreement shall cover all future plants which the Company may operate
during the terms of this Agreement or any extension thereof, including all
plants operated as the result of expansion or change.

ARTICLE IV

CHECK-OFF

4.1

At the time of hire the Company will have the employees sign check-off forms
and applications for membership in the Union, and be given a copy of the
current labor Agreement. Upon receipt of the signed authorization card of the
employee involved, the Company shall deduct from the employee's paycheck, on
the first day after receipt of such authorization, the established Union
initiation fee and/or a reinstatement fee, and thereafter on the first regular
payday in each month, the regular established current monthly dues and
assessments payable by the employee to the Union, during the period provided
for in said authorization. The sums thus deducted shall be remitted to the
Financial Secretary-Treasurer of the Union not later than the fifteenth (15) of
the month in which such dues were deducted. The Company will furnish the
Financial Secretary-Treasurer of the Union monthly with an alphabetical record
of those employees for whom deductions have been made and the amounts of the
deductions.

4.2

If any such employee shall have insufficient earnings or no earnings during the
stipulated pay period when the regular deduction would otherwise be made, then
a make-up deduction shall be made on the next succeeding pay period in which
the employee shall have earned fifty (50) percent or more of his/her normal
weekly wage.

-4-
<PAGE> 9
ARTICLE V
REPRESENTATIVE

5.1

The Union shall be represented in the following manner:

(a) A Bargaining Committee person or persons, as provided in Article VI,
shall represent employees on all shifts, except that if no Committee
person is working on a second or third shift, a Steward shall represent
those employees.

(b) Bargaining Committee composed of five (5) employees, one (1) of whom
shall be designated as chairman.

5.2

It is understood that Stewards and Committeemen have a job of work to do,
therefore, except of time spent on legitimate Union business concerning this
Agreement, it is expected they will perform their regular work. This shall not
be construed to deny employees Union representation at any time.

(a) When leaving their department for the purpose of discussing or handling
grievances or other Union matters, Union Representatives and other
employees will first notify their respective immediate supervisor or
another supervisor or the Plant Manager, if the foregoing are
immediately available. Upon entering another area, they will also
notify (when immediately available) the immediate supervisor of the
area they are entering.

It shall be the responsibility of the person leaving his or her
department pursuant to this Article to advise the supervisor of the
general nature of the Union business involved, if known. This, however,
shall not require the disclosure of the complete or specific details. A
person who is engaged in a "Hot Job" that requires their continued
attention shall attempt to conclude the job. However, this shall not
apply in the event of urgent Union business, such as meetings and phone
calls to and from the International Representative, nor shall it be the
rule, but rather the exception. The term "Hot Job" as used hereinabove
shall be defined as a critical job of work necessitating continued
performance in order to meet an emergency time schedule.

(b) Union Representatives and any employees who leave their departments for
Union Business shall punch out on a Union Business Time Card while
attending to Union Business and shall punch in upon returning to their
job.

-5-
<PAGE> 10
(c) It is agreed that nothing contained in this Article will operate to
interfere with the rights of Union Representatives to legitimately
represent its members.

(d) All representatives and aggrieved employees will be paid their
applicable rate of pay for all time spent resolving grievances or
attending any meetings relating to the administration or enforcement of
this Contract.

5.3

A Committeeperson shall handle grievances at step one (1), except that in the
absence of a Committeeperson on a second or third shift, a Steward shall handle
grievances at step one (1). The Bargaining Committee shall handle grievances at
steps two (2), three (3) and four (4) of the grievance procedure provided for
in Article VI, and any other special meetings which may be called by the
Company or the Union for the purpose of discussing those compelling urgent
matters effecting either party. In such cases, the parties agree to meet, if
possible, within one (1) hour after the time either party calls such a meeting.
If, however, such meeting cannot be held in the above prescribed time, then the
meeting will be held as soon as possible but in no event exceed two (2) regular
scheduled work days.

5.4

All information pertaining to Union employees for the purpose of collective
bargaining or handling of grievances shall be made available to the Union
Representative requesting such information immediately or as soon as possible
after request is made.

5.5

The Union will give the Company a list of Stewards and Committeemen kept
currently up to date.

5.6

The Company agrees that any accredited Representatives of the Union have the
right to communication and/or enter the premises of the plant during working
hours for the purpose of representation and consultation concerning this
Agreement upon presenting themselves at the office, or with prior notice. Phone
calls to the appropriate on duty employee(s) will be expedited.

-6-
<PAGE> 11
ARTICLE VI

GRIEVANCE PROCEDURE

6.1

Should disputes or grievances arise between the Company and the Union or
between the Company and any employee covered by this Agreement, concerning the
affect, interpretation, application, claim or breach or violation of any of the
provisions of this Agreement, or should any other dispute arise hereunder,
negotiations for the settlement of the dispute or grievances shall be held in
accordance with the following grievance procedure:

Step 1: The dispute or grievance shall be taken up verbally between the
employee involved and his/her Union Representative and the immediate
supervisor within ten (10) working days after the occurrence of the
event upon which it is based or the employee has knowledge thereof. If
a satisfactory settlement is not reached within one (1) working day at
this step, then the dispute or grievance shall be reduced to writing,
on a grievance form, over the signature of the aggrieved employee and
shall then be submitted to the supervisor. The supervisor shall answer
in writing within four (4) working days from receipt of the written
grievance and shall return the grievance to the Union Committee.

Step 2: If a satisfactory agreement is not reached in Step #1, the Union
Committee may within five (5) working days from receipt of the
supervisor's answer submit the grievance to the Personnel Director for
settlement. A meeting shall be held within three (3) working days
following the submission of the grievance to this step of the
procedure. If a satisfactory settlement is not reached at this Step #2
meeting, then the grievance may be referred to Step #3 below.

Step 3: The Committee shall call in its outside representatives of the Union,
who shall meet with the authorized representatives of the Company and
the committee to effect a satisfactory settlement of the dispute or
grievance within twenty (20) working days.

Step 4: In the event the grievance is not satisfactorily settled in the third
step, the Union may within the next thirty (30) regular scheduled
working days submit the matter to arbitration by the American
Arbitration Association in accordance with its voluntary Labor
Arbitration rules, then obtaining, or the matter shall be deemed to be
resolved. The Arbitrator shall have no authority to add to, subtract
from, change or modify any provisions of the Agreement or any
supplement thereto between the parties. The decision of the Arbitrator
shall be final and binding upon both parties. Nothing contained herein
shall be construed to limit the authority of the

-7-
<PAGE> 12
Arbitrator in his/her own judgment, to sustain, revise or modify any
alleged unjust discharge or discipline that may reach this stage of
grievance procedure. At the request of either party the Arbitrator,
under appropriate circumstances to be determined by the Arbitrator,
shall retain jurisdiction over his/her Arbitration Award. The expenses
and fees of the American Arbitration Association shall be shared
equally by the parties hereto. The expenses and fees of the Arbitrator
shall be paid by the party failing to obtain the remedy sought. In the
event neither party shall obtain the remedy sought, then the expenses
and fees of the Arbitrator shall be shared equally.

6.2

Grievance Time Limits. The time limits at any step of the grievance procedure
may be extended by mutual agreement in writing and signed by both parties. In
the event the Union does not appeal a grievance from one step to another within
the time limits specified in the various steps, the grievance shall be
considered as having been withdrawn without precedent. In the event a grievance
is not heard and/or answered by the Company within the stipulated time limits
established for same, the Union shall give the Personnel Director and the
applicable Plant Manager written notice that such time limit has not been met.
The Company shall have one (1) work day from receipt of this written notice to
hear and/or answer the grievance. If such hearing and/or answer is not provided
within this period, the grievance shall be considered granted, except if such
failure is due to reasons proven beyond the control of the Company.

POLICY GRIEVANCES

A policy grievance filed on behalf of or affecting three (3) or more employees
or the entire plant by the Union Shop Committee shall be referred directly to
the second step of the grievance procedure.

The Company agrees not to discharge or discipline any employee without
sufficient and just cause. If an employee is discharged, the Company shall
state the cause for discharge in writing to the employee, and shall also notify
the Chairman of the Committee and furnish him with a copy of the reason for
discharge. The discharged employee shall, if he so requests, be granted an
interview with the Chairman of the Committee before leaving the Plant, and the
employee shall have five (5) days excluding Saturdays, Sundays and listed
holidays within which to request a hearing or file an appeal on this case. The
Company shall grant such hearing within seventy-two (72) hours. If a
satisfactory settlement is not reached at such hearing, then the matter shall
proceed to step three (3) of the grievance procedure as outlined-in paragraph
6.1.

-8-
<PAGE> 13
ARTICLE VII

SENIORITY

7.1

(a) Seniority. Seniority is defined as total continuous length of
employment with the Company and shall be determined from the last date of hire,
and shall be applied as set forth in this Agreement. Seniority used herein is
further defined as the relationship between the employees in the bargaining
unit, and to protect and secure an employee's rights in relation to the rights
of other employees. Plant wide seniority in the unit shall prevail and the
principal of seniority shall govern and control all cases of promotion within
the unit, transfers, shift preference, preferred vacation periods, filling of
vacancies or newly created jobs and the decrease in the work force, providing
the senior employee can perform the available work in the average or normal
manner after a fair and reasonable trial period with assistance and
instruction.

(b) When there is a reduction in the work force, senior employees may
volunteer to accept a layoff pursuant to the following rules: 1) A notice shall
be posted on the shop bulletin board indicating the estimated number of
voluntary layoff positions available and the expected duration thereof. 2) From
among those employees responding to the notice the most senior of such
employees, subject to retention of necessary skills, shall be laid off. 3) At
the end of the layoff period, such employee(s) may elect (subject to necessary
skill requirements) to remain on layoff status if need be or exercise their
seniority by returning to their respective classification, seniority
permitting, if not, then to a different classification. 4) After the process
referred to in 3) immediately above is completed, additional voluntary layoffs
may be offered following the same procedure, and so on.

(c) Entering Skilled Classifications. To enter any skilled classification
as defined in subparagraph 7.8(h) by bumping on layoff or recall from layoff,
an employee must pass the applicable test referred to in subparagraph 7.8(h).
After passing the test such employee shall be subject to the trial period as
provided under subparagraph 7.8(9).

(d) Retention/Training. A junior employee involved in a work force
reduction who has started a job or program or has been working on that job for
a minimum of three (3) weeks, may be retained for an additional two (2) weeks
to either complete the job or train for an adequate replacement.

(e) Notice. Except for reasons beyond the Company's control, the Company
shall give five (5) working days notice to the Committee of all layoffs. The
Company shall give as much advance notice as possible to the Committee of all
recalls, transfers and rate changes.

(f) In recalling voluntarily laid-off employees back to work from layoff,
or those employees back to their classifications from transfer as the result of
layoff or lack of

-9-
<PAGE> 14
work as provided under paragraph 13.3, the more senior of such employee(s) may
elect (subject to necessary skill requirements) to waive recall back to work or
back to their classification, and thus remain on layoff or remain in the
classification to which transferred whichever the case may be. Employees on
voluntary layoffs must return to work or to their respective classifications,
whichever the case may be, when all less senior employees have returned and a
further recall need arises.

(g) Except for employees on voluntary layoffs, recalled employees or
employees temporarily transferred due to layoffs must return to work from
layoff or to their respective classification when recalled. The recalled
employee shall have five (5) work days in which to report for work following
layoff after having received notification from the Company. If such laid-off
employee fails to report within this period, the employee shall lose all rights
of seniority, unless the employee is temporarily incapacitated, preventing the
employee from responding, in which case the employee shall be recalled to work
as soon as the employee's health will permit.

(h) Rate. An employee transferred to a job classification under this
article shall be paid in accordance with paragraph 13.3 temporary transfer rate
of pay, or the rate level achieved in the classification by prior on the job
experience (provided such experience occurred within the last twenty-four (24)
months), whichever is greater.

7.2

No new employees shall be hired while qualified laid-off employees are
available and willing to return to work. Jobs of an emergency nature may be
filled temporarily at once by those employees next in line of seniority,
pending the return of qualified laid-off employees who have been notified to
return to work. In all cases of layoff other than temporary, the Company will
give the employee's affected by this reduction, twenty-four (24) hours notice
excluding Saturdays, Sundays and designated holidays. Any employee so notified
must, prior to actual layoff, notify the personnel department of his/her
request to exercise his/her seniority consistent with his/her ability and
qualifications.

7.3

A list of the regular full time employees in the unit and also a list of the
temporary or part-time employees shall be prepared by the Company, stating the
date of hire, and classification of each employee. These lists shall be posted
in the plant for thirty (30) days, during which time corrections may be made by
the Company and/or Committee based on facts. After the thirty (30) days posting
period, during which time corrections shall be made, the lists shall then
become the official Seniority Lists for the purpose of this Agreement. New
employees, hired after the effective date of this Agreement as regular full
time employees, shall be considered as probationary employees for the first
sixty (60) days worked, after which their names shall be placed on the regular
full time Seniority List and their seniority shall date from the last date of
hire. The above probationary period shall not be extended beyond the sixty

-10-
<PAGE> 15
(60) days of work, nor will the Company make a request therefor. The Seniority
List shall be revised from time to time by adding the names of new employees
and deleting the names of employees who have been terminated or quit. The
Company will notify the Union in writing of any change in the status of
temporary or parttime employees and part-time employees shall only acquire
seniority within their own group as such. For purposes of completing the
probationary period, an employee shall be considered to have a "day worked"
during any day the employee actually works at least seventy-five percent (75%)
of the employee's scheduled hours not to exceed eight (8) hours. In the event
that two or more employees have the same last date of hire, their seniority
order shall be determined by a coin toss.

7.4

Notwithstanding their position on the Seniority List, the shop Committee and
department Stewards shall rank at the top of the seniority list during his
and/or her terms of office for the purpose of layoff and shift preference. The
senior employee on outside contract or road jobs shall be the acting Steward on
such job.

7.5

Employees who have served their probationary period, and then lose their
seniority for any reason, shall, upon being rehired, be required to serve
another probationary period, and they shall receive the current rate of pay for
the job classification in which they are rehired.

7.6

The Company will comply with its legal obligations, as provided in the
Selective Service & Training Act of 1948 as amended, with respect to the
Seniority and re-employment of employees who volunteer or are inducted into the
Land, Naval or Air Force of the United States of America, pursuant with such
act.

7.7

Seniority shall be terminated for the following reasons only:

1. Voluntary quit, resignation or retirement.

2. Discharge for sufficient and just cause.

3. The employee has been laid off for a period of twenty-four (24)
consecutive months or equal to the employee's accumulated seniority to
a maximum of forty-eight (48) consecutive months.

4. The employee accepts work elsewhere with another employer during a
leave of absence, without permission from the Company and the
Committee.

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<PAGE> 16
5. The employee fails to report, or is absent from work for three (3)
consecutive work days without notifying the Personnel Department, or
without calling the designated telephone number for such purpose,
except where he/she failed to give the above notification for good
cause. It is understood that for reasons beyond the control of the
employee, such notifications may be given by another person.

6. The laid off employee has failed to report for work pursuant to
paragraph 7.2.

7. The employee has failed to report for work or give proper notice
following the expiration of an approved leave of absence pursuant to
paragraph 8.5.

8. The employee has failed to report for work or give notice as required
by paragraph 8.5, following a nonoccupational or occupational leave
taken pursuant to paragraph 8.3.

JOB BID PROCEDURE

7.8

(a) All job openings not filled by the recall procedure shall be posted
showing the classification, rate, department, location and shift, for a
forty-eight (48) hour period. A job opening is defined in the following
manner: When work in a classification is performed or needed more than
fifty (50) percent of the time, the job will be filled on a permanent
basis. When a new job classification is instituted, such classification
shall be posted for bid regardless of (g) below.

(b) An opening in a classification which has not been active for a period of
at least six (6) months shall be posted as in (a) above unless the job
can be filled by recalling an employee whose original classification is
that of the opening.

(c) Job openings will be posted as they become available. Employees bidding
on an opening will turn in their bid to the Personnel Department and at
that time, will be given a receipt acknowledging such bid.

(d) An employee bidding on more than one job at the same time shall
indicate his/her order or preference of job on bids.

(e) Seniority shall rule in the selection of employees who have the physical
fitness and ability in learning to perform the work with supervision and
instruction.

(f) When an employee successfully bids on a job, he/she may not bid on
another job for six (6) months except by mutual agreement. If an
employee bids on a job and is unsuccessful in filling that job after
the trial period, he/she shall not have the right to bid on another job
for six (6) months except by mutual

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agreement. This does not preclude an employee from filing a grievance
if the employee feels his/her rights have been denied under this
clause.

(g) Pursuant to (e) above, up to fifty (50) working days, depending on the
complexity of the job, shall be allowed for the employee to demonstrate
his/her skills and ability on all job bids, permanent transfers or
layoffs.

(h) "Skilled classifications" for purposes of this paragraph shall be Model
Making, Welding, Machinists, Inspection, Jig & Fixture, Mold Builder,
and Electrical Maintenance. In determining ability, under (e) above for
skilled classifications, such bidding employees may be given a written
test prior to being placed on the job in order to help to determine
ability. To qualify, the bidder must pass a test mutually agreed to by
the parties verifying basic skills including shop math, blueprint
reading, and reading and understanding measuring devices relevant to
the job classification. It is understood that such test shall not be
the exclusive factor in determining ability, nor shall it supersede
seniority rights. Rather, it is for the purpose of determining whether
the bidding employee(s) have the minimum ability to meet the
expectations contained in this section.

(i) In the event there are no bidders for a skilled classification who have
the above referred to qualifications and who have demonstrated same,
then the Company agrees to give preference to training present
employees for jobs in a skilled classification in accordance with the
training procedure provided in paragraph (j) below.

(j) Training Procedure

The job opening referred to in subparagraph (i) shall be posted as a
trainee position on the bulletin board for forty-eight (48)
consecutive hours (weekends and holidays excluded) indicating that a
reasonable amount of training will be given to the successful bidder.
If there are less such bids than are required, written notice of the
opening shall be provided by mail to all laid-off employees on the
recall list. Any interested laid-off employees shall have six (6)
calendar days from the date of mailing of the notice to bid on the
posting. From among those employees signing the second posting, the job
opening shall be awarded to the employee bidding therefor who has the
most seniority who can learn to perform the requirements as indicated
by a mutually agreed upon written test. The employee thus awarded the
job in the classification shall be transferred thereto as soon as
reasonably possible after the award is made and will be allowed up to
ninety (90) working days to demonstrate that he/she has the aptitude
for and will be able to learn to satisfactorily perform the duties of
the job in the classification into which he/she bid with reasonable
training. The employee shall not be subject to shift bumping during
this period. It is understood that where a chain of bidding results
from an initial bid, it may not be practicable to effectuate transfers
to the bid jobs until after all successful bidders in such chain of
bids are ascertained. In no event, however, will a

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bidding employee be denied transfer to the bid job for more than
fifteen (15) working days without mutual agreement between the Union
Committee and Management. The Union agrees it will not unreasonably
deny management's request for an extension. With reference to training
employees for skilled classification trainee positions, in addition to
subparagraph (i) below, where there is an urgent necessity to fill the
job and not adequate time to train present employees, then the Company
may hire a qualified employee from the outside to fill such job. If the
Company is unable to hire a qualified employee within thirty (30)
working days, after the posting, the job opening shall again be posted
for forty-eight (48) working hours providing for a reasonable amount of
training to be given to the senior bidder as provided above.

(i) Pursuant to paragraph (j), above, it is agreed that once two
(2) bidders have been placed as trainees on such jobs, the
Company may hire without posting a qualified employee from the
outside, i.e., a two-to-one ratio. Such nonposting shall be
allowed only in the event of an outside hiring pursuant to the
two-to-one ratio, and prior written notice shall be provided
to the Committee. The first two slots shall be filled by then
current employees in accordance with the provisions contained
herein. In the event there are no trainee bids or less such
bids than are required, the Company shall be permitted to fill
the respective-position(s) with a newly-hired employee(s),
provided such hiring is done within thirty (30) working days,
and such employee passes the applicable test.

(ii) Reference to an employee being allowed "up to fifty (50)"
or"up to ninety (90)" working days does not mean that an
employee who is lacking in the minimum qualifications will be
allowed any period, nor that an employee who demonstrates
during such period that he/she will not meet the expected
requirements will be allowed to remain on such job for the
full period designated.

(iii) An employee who is awarded a job through the above-described
bidding procedure who demonstrates during either the "fifty
(50)" or "ninety (90)" working day period that he/she does not
meet the expected requirements, may be returned to the job
classification from which he/she bid and shall not be awarded
another job through the bidding procedure during the next
succeeding six (6) months after being removed from the bid
job.

(iv) When an employee is disqualified in accordance with the
provisions of subsection (ii) above, the job opening in the
job classification from which he/she is removed shall be
re-posted as a secondary posting (as described in the first
paragraph of this section) if it is still necessary to fill
such job opening.

(v) Employees who bid for a job subject to training shall not be
allowed to bid on another job until they have completed twelve
(12) months in that

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job classification. In the event the Company deems it
necessary to remove an employee as provided for in sub-
section (ii) above, it will notify the Shop Committee if
possible, of the reason for such removal before the employee
is removed from the job. If the employee so removed disagrees
with the Company's action, he/she may file a grievance with
respect thereto, starting at the First Step of the grievance
procedure.

(vi) Employees who bid for and are awarded the job opening may not
disqualify themselves for any reason, except for proven health
problems. However, employees who bid for a job may withdraw
their bid anytime prior to being awarded the job opening.

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7.9

SHIFT PREFERENCE

(a) A shift preference slip must be completed, signed by the employee
making the request, and presented to the Personnel Department.

(b) Such shift preference can be exercised only for changing to another
shift in the employee's own job classification.

(c) A successful bidder for a job posting opening shall not be displaced by
a shift preference request until completion of his/her first forty (40)
days worked in the classification. The successful bidder will not be
permitted to exercise his/her shift preference for six (6) months.

(d) An employee shall be permitted to exercise his/her seniority for shift
preference over the least senior employee in that same job
classification on another shift who is subject to bumping. The employee
will transfer to the new shift at the start of a work week following
seven (7) calendar days notice.

A senior employee may exercise a shift preference request over a
regular "full time" (probationary included), part-time or temporary
employee, in accordance with this Paragraph 7.9, where a less senior
employee is assigned to the preferred shift. Probationary employees are
not subject to being bumped from their shifts for the first forty (40)
days worked of their employment.

(e) An employee who exercised his/her shift preference pursuant to 7.9
shall not be eligible to do so again during the next succeeding six (6)
months.

In the event the Company decides to discontinue a shift in whole or in
part, the employee(s) affected shall be given at least seven (7)
calendar days notice.

7.10

PART-TIME, TEMPORARY, AND STUDENT EMPLOYEES

For purposes of this Agreement, "part-time" shall be defined as a minimum of
eighteen (18) and a maximum of twenty-five (25) hours per week. Temporary
employees shall be defined as being hired for a maximum of sixty (60) days
worked. No more than ten (10) percent of the bargaining unit will be
"part-time" employees, and no more than five (5) percent of the bargaining unit
will be temporary employees. Except as provided below, part-time employees will
receive one-half (1/2) the benefits of regular "full time" employees. Part-time
employees will receive a full hourly pension contribution. Part-time employees
are not eligible for profit sharing. Part-time employees will receive single
person coverage for health and dental benefits. Temporary and student employees
are not entitled to any of the benefits to which

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<PAGE> 21
regular "full time" and "part-time" employees are entitled. Students and
temporary employees are not entitled to work any overtime unless all regular
"full time" employees in the Plant have been offered overtime. "Part-time"
employees are entitled to work overtime provided that all regular "full time"
employees in the same job classification have been offered overtime.

Temporary and student employees shall not accumulate seniority, and in the event
of layoff or job classification reduction shall be the first laid off followed
by probationary employees and then part-time employees in line with their
seniority, which shall accrue to them on the basis of one (1) day for each two
(2) days accrued by regular "full time" employees.

ARTICLE VIII

LEAVES OF ABSENCE

8.1

(a) Leaves of absence without pay for a reasonable period of time, usually
not to exceed thirty (30) days, will be granted to employees covered by
this Agreement for urgent, compelling and/or emergency reasons, and as
otherwise granted by the Company. Extensions of such leaves not to
exceed an additional thirty (30) days may be made provided such
extended leaves do not seriously interfere with the orderly and
necessary operation of the plant. Requests for leaves of absence shall
be made in writing on duplicate forms. One (1) copy to be retained by
the Company, and one (1) copy to be retained by the Union.

(b) Leaves of absence shall be granted to employees obligated to render
jury service for such period of time as shall be required for the
performance of such service. Any such employee(s) called for such jury
service will receive the difference between the pay he/she received for
such jury service and his/her applicable rate of pay computed on the
basis of a forty (40) hour week and/or an eight (8) hour day. Employees
shall present upon receipt of summons for any such jury service, the
same to their supervisor.

(c) Leaves of absence shall be granted to employees called for military
service in the National Guard or the Active Reserves for such period of
time as shall be required for the performance of such service. Any such
employee(s) called for such military service will receive the
difference between the pay he/she received for such military service or
his/her applicable rate of pay computed on the basis of a forty (40)
hour week and/or eight (8) hour day up to a maximum of three (3) weeks
each calendar year. Employees shall present upon receipt of call for
any such military service the same to their supervisor.

(d) Seniority shall accumulate during any leaves of absence.

8.2

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Any employee in the unit who is appointed or elected to full time office in the
Union may be granted an unpaid leave of absence for the terms of such office in
the sole discretion of the Company. A leave of absence may be extended for a
succeeding term of office. Employees granted such leaves(s) shall retain
seniority in the bargaining unit during term of office or any other extension
thereof, but shall not be entitled to any other benefits or privileges of
employment, including but not limited to the continued accumulation of
seniority.

8.3

No employee shall be terminated from the Company's payroll because of or on
account of compensable industrial illness or injury, nor any illness and/or
injury attributable to legitimate reasons, except that for nonoccupational
leave related to injuries or illnesses, seniority shall cease after forty-eight
(48) continuous months disability, and for occupational leaves related to on
the job injuries or illnesses, seniority shall cease after sixty (60)
continuous months of disability. Benefits for occupational leave related to
injuries or illnesses shall cease after twenty-four (24) months disability.
Benefits for nonoccupational leave other than job seniority shall cease after
twelve (12) months disability.

Such employee shall be returned to the job classification he/she occupied
immediately prior to his/her leave provided he/she has the then present
physical ability to perform the work. If such employee is unable to return to
his/her former job classification he/she shall be placed in a job
classification, which he/she has the present physical ability and skill to
perform provided he/she has the requisite seniority to occupy such job and
shall be paid the rate applicable to the job on which he/she is placed. When
such employee is physically able to return to the job classification he/she
occupied prior to the leave, he/she shall be returned thereto, seniority
permitting.

8.4

In the case of an employee granted a leave of absence for reasons of illness or
disability, the employee shall provide the Company with a physician's release
prior to his/her return to active employment.

The Company may require the examination of an employee on medical leave by a
Company designated physician, but no more than once every thirty (30) days. The
Company shall pay for the cost of all such examinations and any lost wages as a
result thereof, if any.

8.5

Any employee who does not report from a leave of absence within three (3)
working days of the scheduled date of return shall give notification to the
Personnel Department within those three (3) working days. Except for urgent,
compelling, and/or emergency reasons for his/her failure to report or give
notice, the employee shall be

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deemed a voluntary quit and have no further rights to reemployment pursuant to
this Agreement.

8.6

Leaves of absence shall not be taken for vacation purposes.

8.7

Employees shall be given copies of all pertinent information regarding the
coverage of workmans' compensation of which they may be involved in or entitled
to, moreover, the Company agrees to cooperate in assisting and assuring so far
as it is able, all rights which the employees are entitled.

ARTICLE IX

WORK DAY, WORK WEEK, OVERTIME PAY AND SHIFT PREMIUM

9.1

The established work day shall consist of eight (8) hours and the established
work week shall consist of five (5) eight (8) hour days, Monday through Friday,
inclusive. The starting time of the first (1) shift shall be 6:30 a.m., and the
quitting time shall be 3:00 p.m., with one half (1/2) hour unpaid lunch period
from 11:35 a.m. to 12:05 p.m. with a five (5) minute paid wash up period
starting at 11:30 a.m. The starting time for the second shift shall be 3:00
p.m., except for Saturday when the starting time shall be 12:00 noon, where
practicable, and the quitting time shall be 11:30 p.m., with one half (1/2)
hour unpaid lunch period from 7:05 p.m. to 7:35 p.m. with a five (5) minute
paid wash up period starting at 7:00 p.m. Each employee is expected to be in
his/her work area and start work when the shift begins. The second paid wash up
period for each respective shift shall begin five (5) minutes before the end of
each employee's shift. Employees are expected to limit their wash up periods to
five (5) minutes. If the Company has more than twelve percent (12%) of the
workforce operating on a third shift all three shifts shall have a thirty (30)
minute paid lunch period. Employees must remain on the premises during this
paid lunch period. The shift starting and quitting times for certain individual
employees may be altered (up to a maximum of 15% of the bargaining unit unless
mutually agreed upon otherwise) for production purposes, at the management's
discretion. The Committee hereby agrees not to act unreasonable in regard to
such requirements. No employee shall be required to work outside of their
established daily or weekly hours, without employee's consent.

9.2

In the event that overtime work is necessary, employees shall receive time and
one-half (1-1/2) for all work performed over eight (8) hours on any one (1) of
the first five

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(5) regularly established work days. Time and one half (1-1/2) shall be paid
for the first eight (8) hours on Saturday; Double (2) time shall be paid for
all work performed after the first eight (8) hours on Saturdays and in excess
of ten (10) hours in any one (1) of the first five (5) regularly established
work days. Double (2) time shall be paid for all work performed on Sundays and
the following designated holidays: New Year's Day, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day, the Friday after Thanksgiving, Christmas Eve,
Christmas Day and New Year's Eve.

9.3

In the event that it is necessary to work overtime on any job, the employee(s)
on the job assignment in the job classification and shift shall be given the
overtime work first, providing the employee(s) are regular employee(s) or
regularly assigned to the job, where such overtime is required and has worked
at least the last two (2) hours before the regular scheduled quitting time on
such job, or who has performed the job the Friday before in the case of
Saturday or Sunday overtime. The Company agrees to give as much advance notice
as possible to employees of overtime opportunities in their classification with
a minimum of two (2) hours prior to the scheduled start of their overtime.
Employees who are not notified pursuant to the foregoing shall not be charged
for such overtime not worked. Then:

All overtime work shall be distributed as equitably as possible among all
employees as their skills will permit within their respective job
classifications, and shifts. In order to fulfill the above, the Company will
maintain an up-to-date overtime chart of all employees posting thereon all
overtime hours worked and/or offered to employees. It is understood that the
employees in the same job classification, and shift, with the least amount of
overtime hours on the above chart will be offered to work the overtime,
providing such assignment would not be detrimental to the progress or quality
of any particular job. The Company will review overtime offered among the
shifts on a regular basis for purposes of maintaining a reasonable balance of
overtime opportunities. The Company agrees not to cancel scheduled overtime
work without giving at least one (1) hour notice prior to the beginning of the
scheduled overtime shift nor cancel in process overtime work except and to the
extent beyond its control.

9.4

In the event that two (2) or three (3) shifts are in operation, employees
working the second shift shall receive a shift premium or bonus of five (5)
percent of their regular hourly rate to a maximum of $ 75 per hour. Employees
working on the third shift shall receive a shift premium or bonus of seven (7)
percent of their regular hourly rate to a maximum of $1.20 per hour. Effective
March 15, 1992, new employees hired on or after that date will receive a shift
premium of $.25 per hour for working on the second shift and a shift premium of
$.35 per hour for working on the third shift.

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9.5

On each workday, employees will receive two (2) paid fifteen (15) minute rest
periods, except for clean room employees who shall receive one twenty (20)
minute paid rest period before lunch and one fifteen (15) minute paid rest
period after lunch. The first shift will have one (1) rest period before lunch
and one (1) rest period after the lunch break. The other shifts will break once
before the dinner period and once after the dinner period. The Company will be
responsible for scheduling employee break periods at or near the midpoint of
each one-half (1/2) shift. Employees scheduled to work ten (10) or more hours
will have an additional ten (10) minutes paid rest period, to be taken at the
end of the ninth (9) working hour. In addition, employees will be required to
remain on the premises during the rest period, and remain on the job until the
beginning of the rest period. A five (5) minute paid wash up period will be
permitted only during the last five (5) minutes of the employee's overtime
shift.

The lunch room shall be off limits at all times except before and after work,
Union meetings and break and lunch periods. The consumption of beverages at the
employee's work place will be permitted during periods other than the above,
but will not be abused, nor will coffee pots be permitted in the plant without
Company permission.

It is understood this provision will not be implemented until access to the
vending machines (i.e., cigarette, changer, beverages and drinking fountain)
outside the lunch room is available.

9.6

If an employee agrees to work overtime regardless of notification under
paragraph 9.3, that overtime shall become mandatory. Should the employee fail
to report for or leave early from the agreed overtime work for reasons other
than those excused in the attendance policy they will be subject to the
following disciplinary system, exclusively.

1st - Verbal (written)
2nd - Written
3rd - Written Warning
(3 days off without pay)
4th - Termination of employment

It's understood that any discipline issued hereunder, shall not be used in any
other disciplinary circumstance in combination or otherwise. Tardiness will be
counted as a tardy under the attendance policy and subject to that policy's
discipline system.

9.7

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In the event an employee is absent during any one of the normal work days
(Monday through Friday) they must report such absence to the Company to be
eligible for overtime assignments as provided in the current Labor Agreement.
Failing to report by telephone to the designated number or the Personnel
Department on the day of such absence, shall cause the employee to forfeit
his/her next overtime assignment only.

ARTICLE X

REPORTING TIME AND CALL BACK TIME

10.1

In the event an employee reports for work on his/her regular shift, without
having been previously notified not to report, he/she shall be given at least
four (4) hours work within his/her classification, and if no work is available
in his/her classification or other work that he/she can perform, he/she shall
be given four (4) hours pay for reporting. This paragraph shall not apply if
there is a lack of work caused by fire, tornado, storm, power failure, or act
of God.

10.2

Any employee who has terminated their shift and has been called back to work on
the same day after the termination of their regular shift shall receive not
less than four (4) hours of work or four hours pay at double (2) time, unless
the employee by previous agreement has been requested and has agreed to come
back to work, they shall receive not less than three (3) hours work or three
(3) hours pay at the applicable overtime rate of pay.

10.3

An employee shall be deemed to have been requested to report for work on
his/her regular shift unless notified to the contrary by an authorized
representative of the Company, at or before the close of the previous day's
shift.

10.4

Employees who are requested by the Company to remain in the plant after the
lunch hour, waiting for work or jobs and the work or job does not materialize,
they shall be paid to the end of the regular day as standby time, at their
regular hourly rate.

10.5

If the Company approaches an employee before that employee has terminated their
regular shift, the Company may request the employee, and the employee may agree
to work a specific number of overtime hours on Saturday, Sunday or Holidays for
a

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given overtime assignment within a forty-eight (48) hour period. A
Committeeperson may be present at the time of the request or if one is not
present or is not available, the employee should sign an acknowledgement of
what hours they have agreed to work. If the employee who was requested to work
turns down the overtime assignment, a different employee can be approached in
the same manner. The above description will operate in conjunction with the
equalization of overtime and pertains to the above overtime assignments only.

ARTICLE XI

PAID HOLIDAYS

11.1

All regular full time employees covered by this Agreement shall receive holiday
pay for each of the following designated holidays not worked irrespective of
the day of the week on which the holiday may fall at the rate of eight (8)
hours pay at the employees' current hourly rate of pay, provided the employee
has worked at least six (6) hours on the last regular scheduled shift preceding
the holiday. Employees on leave of absence due to noncompensable illness or
injury shall be entitled to and receive their holiday pay for all holidays
falling within the first ninety (90) day period of such leave and in addition
they shall receive holiday pay for all holidays falling within a twelve (12)
month period of leave of absence due to compensable injury or illness.

11.2

In addition to the payment of double (2) time for hours worked on any of the
following designated holidays, as provided in Article IX, Section 9.2, all
employees working on such holidays shall receive holiday pay as set forth in
Section 11.1.

11.3

The following designated holidays shall be paid holidays under this Agreement:

New Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving
Day, the Friday after Thanksgiving, Christmas Eve, Christmas Day and
New Year's Eve.

11.4

If a holiday falls within an employee's vacation period, such holiday shall not
be considered as part of the vacation period, and the employee shall receive
his/her full vacation and vacation pay, in addition to holiday pay as
hereinbefore provided in Section 11.1.

11.5

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In the event that any one of the above designated holidays shall fall on a
Saturday or Sunday, the day observed by the State, Nation or by Proclamation,
shall be the holiday observed under this Agreement.

ARTICLE XII

GROUP INSURANCE, HOSPITAL AND WELFARE PLAN

12.1

The Company will maintain a hospital surgical, accident and sickness benefits
and life insurance plan for those employees who wish to participate.

12.2

The Company agrees to provide and pay the full insurance premium for Blue Cross
Blue Shield Comprehensive Major Medical Plan CMM-100 or the Preferred
Physicians Health Plan (PHP) plan number 10148 for all employees and their
eligible dependents. It's understood that employees, at their option, can
choose either one of the above plans, but not both. The employee may change
from his or her existing plan to one (1) of the others, but not more often than
once a year and only during the open enrollment periods designated by the
insurance company. The Company will pay the premium for the first three (3)
months for laid-off employees with one (1) or more years of seniority.

12.3

The Company agrees to pay the total premium cost for the life insurance and
fifty-two (52) week disability insurance for all bargaining unit employees
after completion of the probationary period. The plan will consist of
$24,000.00 minimum or one (1) time the yearly wage term insurance, whichever is
greater. Current employees will receive a minimum of $250/week or sixty percent
(60%) of their weekly wage rate, whichever is greater with a maximum benefit
level of $320/week. New employees hired after the effective date of this
contract will receive sixty percent (60%) of their weekly wage rate with a
maximum benefit level of $320/week for fifty-two (52) weeks indemnity.
Effective March 15, 1996 - Maximum raised to $330/week for all employees.
Effective March 15, 1997 - Maximum raised to $350/week for all employees.

12.4

The Company reserves the right to change insurance carriers during the life of
the Agreement; however, any change will provide insurance coverage and benefits
equal to or better to the employees and their dependents.

12.5

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The Company will offer a Dental Program for all employees and their dependents.
The Company will pay eighty percent (80%) and the employee will pay twenty
percent (20%). The maximum benefit level is $1,000.00 and, in addition, Type A
expenses are now covered 100%.

12.6

Retirement Benefit. The Company will pay 100% of the premium for Health & Life
Insurance for employees electing to retire between the ages of 62-65, up to the
age of 65. The cost to the Company for Health Insurance premiums paid pursuant
to this provision shall be capped at the rate of such premiums as of January 1,
1996. Employees retiring before March 14, 1998 shall not be subject to this
cap. This benefit applies to the employee and their spouse.

12.7

If an employee has alternate medical coverage available to him/her and that
employee elects not to be covered by the Company's health insurance, the
Company shall pay on a monthly basis to that employee, who would otherwise be
eligible for such coverage, the following sums, with normal tax withholdings:
$50.00 for a single employee; $140.00 for two (2) person coverage; and $200.00
for full family coverage. Where an employee is married to another employee
(hourly or salaried), only one employee (at the election of the affected
employees) shall receive health insurance coverage, and the spouse shall
receive the applicable monthly payment. During the period of this contract, any
employee electing not to be covered by the Company's health insurer shall have
the right to change their election and obtain health insurance coverage paid by
the Company. In such event, the employee shall be (subject to the insurance
Company's regulations) immediately insured by the Company's health insurance
carrier to the extent that the employee qualifies for coverage. The employee
shall provide proof that their spouses' insurance loss was due to no fault of
the insured. If the insurance regulations do not permit immediate coverage, the
Company shall pay to the affected employee, on a monthly basis, a sum equal to
the monthly premium that would otherwise be paid to the insurance carrier for
that employee and his or her dependents. Said sums shall be paid to the
employee without deductions for federal income tax, state income tax and FICA.
However, said sums shall be added to the employee's total annual earnings (W-2)
at the end of each year.

12.8

The Company offers a 401K Employee Savings and Investment Plan. The Plan will
be voluntary and governed by the Plan and subject to approval by the I.R.S.
There will be no Company contribution. A summary description is attached in the
back of this Agreement. The Company will pay all administrative costs of the
Plan for the life of the current Agreement.

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12.9

The Company will provide the flexible benefit plan, presented and discussed
during negotiations, to be effective on or before April 1, 1992, or as soon
thereafter as the Plan may be implemented. The Employer shall pay all
administrative expenses of the Plan. All unused benefits remaining in
participants' accounts at the end of the plan year shall be forfeited as
required by applicable law. Such forfeited benefits shall be distributed on a
per capita basis to all Plan participants.

ARTICLE XIII

CLASSIFICATION AND MINIMUM RATES OF PAY

13.1

Classifications and minimum rates of pay shall be established as of the
effective date of this Agreement as Exhibit "A" shall be attached to and be
made a part of this Agreement.

13.2

The matter of establishing new classifications and rates of pay applicable
thereto shall be subject to negotiation between the Company and the Union, and
when approved shall become a part of this Agreement.

13.3

Temporary Transfers. Subject to the six (6) month and sixty (60) day
restrictions provided below, the Company may temporarily reassign employees
from one building to another within their respective job classification (this
restriction shall not apply to reassignments within a building). The Company
may temporarily transfer employee(s) from their classification to another
classification in accordance with their relative seniority status and ability
to cover for employees who are absent due to illness, accident, vacations,
leaves of absence, layoffs, lack of work, or for short term production
requirements for the duration of such absence, layoff or production
requirements, but in any event not to exceed six (6) months (sixty (60) working
days in cases of lack of work or short term production requirements) except by
mutual agreement between the Company and the Shop Committee. The Company agrees
not to abuse and/or reassign or transfer employees pursuant to the above for
reasons of partiality or discrimination.

(a) There shall be no permanent transfer of an employee (other than through
the bidding procedure) from his/her classification to another
classification without mutual agreement between the Company, the Union
and the employee involved.

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(b) Temporary transfers shall not be used to avoid the posting of full time
job openings, nor for the purpose of avoiding the recall of a laid-off
employee. The Company may temporarily transfer employees to fill posted
jobs from the time of the posting until the successful bidder is
assigned the job opening.

(c) Copies of all temporary transfer slips (except such transfers that are
made due to leaves of absence as provided in Article VIII and vacation
fill-ins) will be furnished to the Shop Committee Chairman weekly, if
there are any.

(d) Except as specifically provided in (e) below or in paragraph 8.3, an
employee on a temporary transfer from one classification to another of
one (1) working day or longer shall be paid for all time for such
transfer at the employee's applicable hourly rate or the minimum "B"
rate of the applicable temporary job classification, or the rate level
achieved in the classification by prior on-the-job experience (provided
such experience occurred within the prior twenty-four [24] months)
whichever is greater.

(e) An employee recalled from layoff, or an employee who is required to
bump on account of a layoff to a lower-rated job classification, shall
receive the rate of the lower-rated classification, and shall be placed
in the pay range level of the lower classification at the rate
proportionate to the employee's rate in the pay range of the higher
classification. Such an employee who returns to the previous
higher-rated classification shall not receive credit for progression
increases received during that period of recall or bump. This provision
shall be strictly limited to recalls from layoff and required bumps as
the result of layoffs, exclusively.

(f) An employee on a temporary transfer of less than a day's duration shall
be paid the employee's applicable hourly rate.

13.4

When new jobs and/or classifications are created through the introduction of
new types of equipment or processes, the Company shall establish an initial
rate, it shall become the rate for the job unless the Union requests to
negotiate a new rate prior to the end of a thirty (30) day trial period.

Upon such request, the Company agrees to meet and negotiate the job rate and
the working conditions. Any negotiated rate shall become effective retroactive
to the date the job was established. Should any disagreement arise over such
negotiations, it may be resolved through the grievance and arbitration
procedure.

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<PAGE> 32
ARTICLE XIV

VACATIONS

14.1

All full time employees covered by this Agreement shall be entitled to and
receive vacations and vacation pay bonus, based on the following schedule.

14.2

Vacations shall be determined on the basis of the employee's years of service.
The term "years of service" shall mean the employee's total years of seniority
with the Company. Seniority shall be computed as provided for under the
Agreement. Employees having one (1) year but less than two (2) years of
service shall receive five (5) days of vacation and pay equal to forty hours
pay at the employee's applicable hourly rate. Employees having two (2) but less
three (3) years of service shall receive five (5) days of vacation and sixty
(60) hours pay at the employee's applicable rate. Other employees shall receive
vacation pay based on the percentage of Gross Wages shown below.

<TABLE>
<S> <C> <C>
1 year 5 days -- 40 hours pay
2 years 5 days -- 60 hours pay
3- 4 years 10 days 4% of Gross Wages
5- 8 years 10 days 5% of Gross Wages
9-11 years 15 days 6% of Gross Wages
12-14 years 15 days 7% of Gross Wages
15-19 years 20 days 8% of Gross Wages
20-24 years 20 days 9% of Gross Wages
25-29 years 20 days 10% of Gross Wages
30+ years 25 days 10.5% of Gross Wages
</TABLE>

(a) Preference for a vacation period will be granted on plant-wide seniority
basis within the classification.

(b) Recall of employees on vacation will be made on voluntary basis.

(c) To be eligible for vacation pay an employee must have worked a minimum
of five hundred (500) hours during the twelve (12) month period prior
to the employee's anniversary date.

(d) For purposes of this Article, Gross Wages shall not include payments to
employees made pursuant to paragraph 12.7.

(e) An employee who is entitled to ten (10) or more days of vacation shall
be given the privilege of taking his/her vacation in one (1) week
periods.

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(f) An employee shall file a written request with his/her foreman on a form
provided by the Company requesting specified vacation dates to be taken
any time during his/her respective anniversary year.

(g) When the vacation schedule has been received and approved, the time
selected shall become his/ her assigned vacation and will not be changed
unless approved by the department foreman and the Personnel Department.
If an employee bypasses his/her vacation choice at this time, he/she
then waives his/her right to this choice. His/her vacation will then be
scheduled in such a manner so as to not affect other employees who have
previously made their selections.

(h) In the event of death, existing vacation payment will be made to the
estate of the deceased or his/her legal heirs or spouse.

(i) Employees with one (1) or more years of service who terminate
employment with the Company for any reason during the term of the
Agreement shall receive pro-rata vacation at the time of their job
severance. Such pro-rata vacation pay shall be based upon total gross
earnings computed on the percentages set forth above.

(j) The employee shall receive his/her vacation pay in the week following
his/her anniversary date.

(k) For the purpose of vacation choice, ten percent (10%) of the bargaining
unit may take their vacation at any time; anything in excess of this
will be by agreement with the Company.

(l) All employees entitled to vacation of two (2) weeks or more shall be
eligible to carry over a maximum of three (3) weeks vacation up to one
(1) year.

(m) For purposes of calculating Income Tax on vacation, in order to
minimize the amount of taxes, such checks will be figured as though
separate weekly checks are issued.

ARTICLE XV

SAFETY AND SANITATION

15.1

The Company shall furnish and maintain safe and healthful sanitary working
conditions in the plant at all times, including proper ventilation, washing
facilities and toilets. The Company will also provide suitable protective
clothing, gloves, safety goggles and other safety devices and guards for all
employees covered by this Contract. The Company shall also provide prescription
safety glasses for any employee of the

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<PAGE> 34
Bargaining Unit required to wear such glasses. The Company agrees to maintain
the eye glass policy as defined by the memorandum dated 3/15/92. The policy
provides for compensation levels for prescription and non-prescription glasses.
The Company shall not be obligated to furnish these prescription glasses more
often than one (1) pair per employee every two (2) years. Employees shall not
be required or compelled to operate any unsafe machine or equipment and these
matters shall be subject to the grievance procedure in his/her Agreement.

15.2

All employees shall act to promote safety in the plant at all times and report
all hazards and industrial accidents to Company Representatives.

15.3

An employee who may be injured in the plant or suffers an industrial accident
in the course of his/her work and requires the services of a Doctor or needs to
be hospitalized, shall be provided transportation to the hospital or Doctor's
office and returned to the Plant, or the employee's home in the event the
employee is unable to resume his/her regular duties. If the employee is unable
to return to work, he/she shall be compensated for a full day on which the
injury occurs, or on the day on which he/she makes his/her first visit to the
Doctor or the hospital. If subsequent medical attention is required after the
employee returns to work, he/she shall receive his/her regular rate of pay for
the time spent in visits to the Doctor.

15.4

The Company shall maintain adequate first aid facilities and a qualified first
aid employee.

ARTICLE XVI

FUNERAL LEAVE

16.1

Employees who have a death in their immediate family shall be granted time off
with pay at their applicable rate in accordance with the following schedule:

(a) Five (5) consecutive days off in the event of the death of a husband,
wife, son or daughter.

(b) Three (3) consecutive days off in the event of the death of a stepson,
stepdaughter, legal ward, father, mother, brother, sister, grandchild,
current stepfather, current stepmother, current father-in-law, current
mother-in-law, current son-in-law and current daughter-in-law.

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<PAGE> 35
(c) One (1) day off in the event of the death of a current sister-in-law,
current brother-in-law, current stepbrother, current stepsister,
grandmother or grandfather.

(d) Any and all other relationships are excluded, but an employee will be
excused for attendance of funerals outside those referred to above with
verification given.

16.2

No time off or pay will be granted if the employee fails to attend the funeral
of the deceased, excepting his/her inability for legitimate reasons to do so.

16.3

The Company reserves the right to request written proof of death in determining
right to these benefits.

ARTICLE XVII

GENERAL PROVISIONS

17.1

All employees shall keep the Company and the Union informed at all times of
their proper post office address and current phone number, and the Company
shall be entitled to rely upon the addresses and phone numbers shown on the
Company's records in giving notices to the employees.

17.2

The Company shall provide a suitable bulletin board at an appropriate location
in the plant for the exclusive use of the Union.

17.3

The Company agrees to furnish a copy of the Agreement to each employee within a
reasonable time after its effective date and to each newly hired employee
thereafter at the time of hiring.

17.4

It is agreed that any and all privileges enjoyed by the employees prior to the
date of this Agreement will not be denied to them because of the signing of the
Agreement. Such privileges shall be continued to be enjoyed by the employees
during the term of

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<PAGE> 36
this Agreement. However, any privilege or privileges may be denied by mutual
consent of both parties.

17.5

The Company will not, so long as equipment and personnel are available,
subcontract any work which is customarily performed by employees in the unit to
any other Company.

17.6

It is agreed that a Safety Committee, composed of hourly employees, a Union
representative and a Management representative shall hold meetings. Such
Committee member shall be paid for time spent during work hours in relationship
to the above.

17.7

All employees covered by this Agreement shall be paid on Friday of each week.
Employees assigned to work outside of the home station at Lansing, Michigan,
and who are entitled to, and receive per diem expense and travel expenses on
every Friday when they receive their regular weekly pay.

17.8

Supervisors and other employees excluded from the Bargaining Unit shall not
perform any work normally performed by members of the Bargaining Unit except in
emergency or for instruction purposes, or except engineers and technicians who
are working on research and development projects conducted at Company expense.

17.9

The Company has the right to establish reasonable shop rules and regulations
which are not in conflict with this Agreement. Complaints relative to the
reasonableness and/or application of such rules shall be subject to the
grievance procedure as outlined in Article VI.

17.10

All forms of discipline and/or reprimands will become ineffective and shall be
removed from the employee's folder ten (10) months from the date of such
action. The Union representative will be given the opportunity to be present at
the time any discipline is issued to an employee and will be given a copy of
any such disciplines.

17.11

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<PAGE> 37
Employees will be given sufficient time off without pay to conduct Local Lodge
Union activity off the plant premises during working hours and such absence
shall not be charged against these employees, nor shall that be a basis for
disciplinary action. The Union agrees to give a twenty-four (24) hour advance
notice whenever possible.

17.12

Any employee promoted to the position of foreman, and/or salaried personnel for
a period in excess of forty-five (45) calendar days, shall retain his/her
seniority previously accrued and shall not accumulate seniority during his/her
employment as a foreman and/or salaried employee. Any employee so promoted who
returns to the bargaining unit during the first forty-five (45) calendar days
of his/her promotion, either voluntarily or at Company request, shall
accumulate seniority during this period of employment as foreman and/or
salaried employee. Notwithstanding anything herein, any such employee who
remains in such position in excess of six (6) months shall lose all seniority
within the bargaining unit.

17.13

The Union shall have the right to call membership meetings so as to not
interfere with the normal course of business and will so advise the Company as
to times and dates therefore. The Company agrees not to allow any employees to
work during the times these meetings are being conducted, except by agreement
with the Shop Committee.

17.14

In the event it shall be determined in the State of Michigan either by
legislation, law or proclamation to change over the "daylight savings time",
the parties hereto agree to meet for the purpose of negotiating with respect to
any change and adjusting this Agreement, if and where necessary.

17.15

In the event that the Company voluntarily elects to close the Plant, the
management will give the Union ninety (90) days notice.

17.16

Except and to the extent required by applicable law, there shall be no random
drug or alcohol testing nor any drug or alcohol testing of employees without
probable cause.

ARTICLE XVIII

LEADMAN AND LEADWOMAN

18.1

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<PAGE> 38
The Leadman and Leadwoman function as herein provided shall be defined to
include and be limited to the following:

Thus, in order to qualify for and/or continue as a leadperson, such employees
must be a member of the bargaining unit, must be from the area they are to lead
in, and there must be at least four (4) employees (inclusive of the lead
employee) involved in the Agreement. Furthermore, lead employees will be
expected to relay and carry out working instructions and directions from the
Supervisors, and may be required to perform a minimum amount of paper work and
routine record keeping. Working instructions and directions shall not include
assignment of overtime, scheduling of hours, determining rate of pay or other
similar tasks that require the use of sole independent judgement. Nor shall
anything herein provide for such employees the right to hire, fire, take or
cause disciplinary action, nor will such employees take part in the adjustment
of complaints or grievances. Except for time spent performing such lead
functions, such employees are expected to perform their regular work in their
respective jobs. Leadperson and future group instructors shall receive forty
cents ($.40) per hour above their wage rate. Employees no longer required for
leadperson positions due to production changes, lack of work or job status
change will return to their regular rate.

ARTICLE XIX

ALTERATION OF AGREEMENT

19.1

No agreement, alteration, understanding, variation, waiver or modification of
any of the terms or conditions or covenants herein shall be made by any
employee or group of employees with the Company without the sanction and
approval by the Union, and in no case shall modification or amendment be
binding upon the parties hereto unless such Agreement is executed in writing
between the parties and signed by the proper representatives of each party.

In the event that any Article or Section of this Agreement shall be determined
to be or shall become unenforceable at law, all other Articles or Sections not
so invalidated shall remain in full force and effect.

ARTICLE XX

OBLIGATION FOR CONTINUATION OF SERVICE

20.1

The Union agrees that during the life of this Agreement, neither the Union, its
agents, nor its members will authorize, instigate, aid, condone or engage in
any work stoppage, slowdown or strike unless the Company at any time refuses
and/or fails to

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<PAGE> 39
abide by the grievance and/or arbitration provisions, in which event the above
prohibitions shall be inoperable for the duration of any such failure or
refusal. The Company agrees that during the same period, there will be no
lockouts.

Any employee who participates in any such act shall be subject to
discharge or discipline.
ARTICLE XXI

I.A.M. NATIONAL PENSION FUND, NATIONAL PENSION PLAN STANDARD
CONTRACT LANGUAGE

A. The Employer shall contribute to the I.A.M. National Pension Fund,-
National Pension Plan $.85 for each hour.

1/ for which employees in all job classifications covered by this Agreement are
entitled to receive pay under this Agreement 2/ as follows:

$.90 per hour effective March 1, 1997.

B. The Employer shall continue contributions based on a forty (40) hour
week while an employee is off work due to paid vacations or paid
holidays. 3/

C. Contributions for a new, temporary, probationary, part time and full
time employee are payable from the first day of employment. 4/*

D. The I.A.M. Lodge and the Employer adopt and agree to be bound by, and
hereby assent to, the Trust Agreement dated May 1, 1960, as amended,
creating the I.A.M. National Pension Fund and the Plan rules adopted by
the Trustees of the I.A.M. National Pension Fund in establishing and
administering the foregoing Plan pursuant to the said Trust Agreement,
as currently in effect and as the Trust and Plan may be amended from
time to time.

E. The parties acknowledge that the Trustees of the I.A.M. National
Pension Fund may terminate the participation of the employees and the
Employer in the Plan if the successor Collective Bargaining Agreement
fails to renew the provisions of this pension Article or reduces the
contribution rate. The parties may increase the contribution rate
and/or add job classifications or categories of hours for which
contributions are payable.

F. This Article contains the entire Agreement between the parties
regarding pensions and retirement under this Plan and any contrary
provision in this Agreement shall be void. No oral or written
modification of this Agreement shall be binding upon the Trustees of
the I.A.M. National Pension Fund. No grievance procedure, settlement or
arbitration decision with respect to the obligation to contribute shall
be binding upon the Trustees of the said "Pension Fund".

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<PAGE> 40
- END OF STANDARD CONTRACT LANGUAGE -

*4/ The parties have agreed that contributions will begin at the end of the
employee's probationary period, but no later than sixty (60) worked
days after date of hire.

(Please complete Options Section and sign below if the Standard Contract
Language is to be signed as a separate Agreement. If the Language is
included in the Collective Bargaining Agreement, please insert options
where applicable.)

Options:

1/ Trustees' policy requires that all groups entering and continuing
participation shall negotiate either an HOURLY, DAILY or WEEKLY
contribution rate. An HOURLY contribution rate may be negotiated if the
Collective Bargaining Agreement calls for a 40-hour work week. If the
work week is less than 40 hours, a DAILY or WEEKLY contribution rate
should be negotiated. If contributions are on a WEEKLY basis, a
contribution is required for each week in which the employee is
entitled to receive pay on 2 or more days. If contributions are on a
DAILY basis, contributions are required for any day or portion thereof
for which an employee is entitled to receive pay under this Agreement.

2/ The parties may negotiate to limit contributions to a maximum of forty
hours per week for each employee.

Yes X No
----- ------

3/ The parties may negotiate to exclude contributions for sickness and
injury time, Reserve Training Time, jury duty, bereavement pay or lost
time for processing grievances under the Agreement. If contributions
are to be excluded for any time, please specify: Sickness and injury
time

4/ The parties may negotiate that contributions will begin at the
completion of the employees probationary period, but no later than
sixty (60) days worked after date of hire. Yes X No______

Temporary employees may be excluded for a maximum period of ninety
(90) calendar days. Yes X No If yes, for how long? 60 Days
Worked

Local #2184 District #117, I.A.M.
(Insert Name and Number of Lodge)

By Date
------------------------------ ----------------------------
(Authorized Officer and Title)

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<PAGE> 41
Auto-Air Composites, Inc.
(Insert Name of Employer)

38-1511826
EMPLOYER'S IRS IDENTIFICATION NO.

Address P.O. Box 21129 - Lansing, Michigan 48909

By Date
------------------------------ ----------------------------
(Authorized Officer and Title)

For plants or terminals located at:

5640 Enterprise Drive - Lansing, Michigan 48911
(Street) (City) (State) (Zip)

ARTICLE XXII

PROFIT SHARING PLAN

22.1

Amount to be distributed: Based on profits before corporate income taxes. The
amount distributed shall be ten percent (10%) of profits before corporate
income taxes in excess of an amount equal to three percent (3%) of annual gross
sales.

22.2

Basis for distribution: The total of straight time hours worked, which includes
vacation time taken, of all employees eligible divided into amounts to be
distributed will equal hourly rate. This rate times individuals yearly total
straight time hours, which includes vacation time taken shall equal employees
gross bonus.

22.3

Eligibility: Employees eligible will be those members of the Union in good
standing at the time of contract signing who will qualify as follows:

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(1) Must be a member of the Union in good standing at the beginning of the
fiscal year commencing January 1.

(2) Must work at least 1,500 hours per year.

Under the current yearly program, a Union employee must work 1,500 hours
per year to qualify for the program. Since the program will now have two
(2) payments, the qualification time is simply prorated. E.g., 1,500/12
= 125 hours/months. Therefore, an employee to qualify for the September
payout must have worked 6 x 125 = 750 hours during the January through
June time frame. Similarly, to qualify for the March payout, the
employee must have worked 6 x 125 = 750 hours during the July through
December time frame.

The hours worked must be during the time frame stipulated. No hours
will be carried over from the time frame of payment number one (1) into
the time frame of payment number two (2).

(3) Must be carried on payroll records at close of accounting period.

(4) See paragraph 7 D. Period for computation. Company fiscal year January
1 through December 31.

(5) Verification of amount for distribution: At close of fiscal year ending
December 31, each year a certified public accounting firm audits
Company records. This firm will publish an official letter stating the
total amount to be available for distribution. This letter will be
submitted to the Union on approximately March 15 of each year.

(6) When distributed: The Company will continue to base the profit sharing
bonus on the total year's profit. However, the Company will distribute
the year's bonus in two (2) payments. Payment number one (1) will be
paid by the Company between September 1 and September 15. This payment
will be based on the profits earned from January to approximately June.
This payment will be determined by the Company utilizing the normal
calculation procedure. Payment number two (2) will be paid by the
Company between March 1 and March 15. This payment will be based on the
profits earned from approximately July through December. This payment
will be derived by the Company utilizing the normal calculation
procedure.

(7) General Provisions:

(a) Only straight time hours worked and actual vacation time taken
will be used, not overtime, nor wages. This places all
employees on the same scale.

(b) Holiday hours not included in basic computation.

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(c) Withholding taxes and social security taxes will be deducted
if applicable.

(d) Employees on authorized sick leave, leave of absence or laid
off will be given equivalent straight time hour credit to
qualify under the 750 hours per each six (6) month period;
however, these lost time credits will not be included in the
actual computation for monetary disbursements. Credits will
not be allowed for make-up time because of tardiness and
absenteeism.

(e) The elimination from Article XXII, of Section 22.7(e) will not
alter, change, modify or adversely affect the profit sharing
plan, nor the calculation and/or distribution.

ARTICLE XXIII

COST OF LIVING ALLOWANCE

23.1

In addition to the hourly wage rates of all employees of the Bargaining Unit
and subject to the conditions and provisions set forth in this Article, the
Cost of Living Allowance in effect, if any, shall be paid to such employees
based on changes in the Cost of Living as follows:

The Cost of Living will be determined and redetermined quarterly in
accordance with changes in the revised Index all items large cities
combines (1982-84 = 100) for Urban Wage Earners and Clerical Workers,
published by the Bureau of Labor Statistics, U.S. Department of Labor,
hereinafter referred to as the Index.

A new base will be established by using the CPI published for the month
of January 1996, with the first adjustment due and payable effective
the first payroll period in June 1996, with subsequent adjustments at
quarterly intervals thereafter. The adjustments shall be .01 cent per
month per hour for each .167 change in the Index.

The full Cost of Living Allowance in effect shall be applicable to all
hourly compensation of employees in the Bargaining Unit, except as
agreed to below regarding the cap. In no event will a decline in the
Index allow for a reduction of hourly rates as provided for elsewhere
in this Agreement.

In the event the Bureau of Labor Statistics does not publish the Index
on or before the beginning of the pay periods referred to above, then:
any adjustments required will be made at the beginning of the first
weekly pay period after publication thereof.

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No adjustments, retroactive or otherwise, shall be made due to any
revision which may later be made in any published figures by the Bureau
in the Index for any base month.

In the event the Bureau of Labor Statistics Price Index in its present
form and calculated on the same basis shall be revised therefrom, or
discontinued, the respective parties hereto shall attempt to adjust this
clause, or if agreement is not reached, the parties shall jointly
request the Bureau of Labor Statistics to provide an appropriate
conversion system or table to be used thereafter.

For the first year of this Contract, the Cost of Living Allowance will
be frozen. For each of the final two (2) contract years the Cost of
Living will be capped at twenty-five (25) cents each year for a three
(3) year total of fifty (50) cents. In no case shall the Company pay
out less than (50) cents for the term of this Agreement. Nevertheless,
employees will receive a guaranteed twenty-five (25) cent COLA for each
of the second and third years. If by the start of the fourth (4)
quarter of each of the second and third contract years the twenty-five
(25) cents guaranteed for each year has not been paid out, the
remainder will then be distributed effective the fourth (4) quarter. In
addition, there will be a carry over adjustment that will draw upon the
preceding year's excess cap, if any, due and payable the first quarter
of each year.

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<PAGE> 45
CLASSIFICATIONS AND RATES OF PAY EXHIBIT "A"
EFFECTIVE MARCH 15,1995
<TABLE>
<S> <C> <C>
WELDING

Welder A $14.86 - $17.36
Welder B 13.25 - 14.66 3 years
Welder C 11.65 - 13.05 3 years
Welder Trainee 10.75 - 11.45 2 years

MACHINIST

Machinist A $14.86 - $17.46
Machinist B 13.25 - 14.66 3 years
Machinist C 11.65 - 13.05 3 years
Machinist Trainee 10.75 - 11.45 2 years

MODEL MAKING

Model Maker A $14.86 - $18.36
Model Maker B 13.25 - 14.66 3 years
Model Maker C 11.65 - 13.05 3 years
Model Maker Trainee 10.75 - 11.45 2 years

MOLD BUILDER & ASSY

Mold Builder A $14.86 - $17.41
Mold Builder B 13.25 - 14.66 3 years
Mold Builder C 11.65 - 13.05 3 years
Mold Builder Trainee 10.75 - 11.45 2 years
</TABLE>

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<PAGE> 46
<TABLE>
<S> <C> <C>
INSPECTOR

Inspector A $14.86 - $17.86
Inspector B 13.25 - 14.66 3 years
Inspector C 11.65 - 13.05 3 years
Inspector Trainee 10.75 - 11.45 2 years

JIG & FIXTURE BUILDER

Jig & Fixture A $14.86 - $17.46
Jig & Fixture B 13.25 - 14.66 3 years
Jig & Fixture C 11.65 - 13.05 3 years
Jig & Fixture Trainee 10.75 - 11.45 2 years

PRODUCTION MOLDER

Production Molder A $13.92 - $15.96
Production Molder B 12.00 - 13.72 3 years
Production Molder C 10.50 - 11.80 3 years

AUTOCLAVE OPERATOR

Autoclave Operator A $13.92 - $15.96
Autoclave Operator B 12.00 - 13.72 3 years
Autoclave Operator C 10.50 - 11.80 3 years

ETCHING

Etching A $13.92 - $15.96
Etching B 12.00 - 13.72 3 years
</TABLE>

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<PAGE> 47
<TABLE>
<S> <C> <C>
Etching C 10.50 - 11.80 3 years

LAB ASSISTANT

Lab Assistant A $13.92 - $15.96
Lab Assistant B 12.00 - 13.72 3 years
Lab Assistant C 10.50 - 11.80 3 years

LAMINATOR

Laminator A $13.92 - $17.41
Laminator B 12.00 - 13.72 3 years
Laminator C 10.50 - 11.80 3 years

MAINTENANCE

Maintenance A $14.86 - $17.46
Maintenance B 13.25 - 14.66 3 years
Maintenance C 11.65 - 13.05 3 years
Maintenance Trainee 10.75 - 11.45 2 years

SHIPPING & RECEIVING
000
Shipping & Receiving A $13.92 - $16.06
Shipping & Receiving B 12.00 - 13.72 3 years
Shipping & Receiving C 10.50 - 11.80 3 years

CRIB ATTENDANT

Crib Attendant A $13.92 - $15.96
Crib Attendant B 12.00 - 13.72 3 years
Crib Attendant C 10.50 - 11.80 3 years
</TABLE>

-43-
<PAGE> 48
<TABLE>
<S> <C> <C>
TRUCK DRIVER $ 7.50 - $11.41 (Subject to paragraph 7 of Exhibit B)
SWEEPER/SHOP JANITOR $ 7.50 - $ 8.84 (Subject to paragraph 7 of Exhibit B)
Assistant Starting $7.50
Union Eligibility Union Membership 6 months
@60th day worked $8.25 $9.00

12 Months 18 Months

Assistant $9.50 Assistant $10.00
Special Trainee $9.75 Special Trainee $10.25
</TABLE>

* Bottom of classification will be fixed and will not be modified by
general increase or other rate changes that may occur.

* General wage or other rate increases or adjustments shall be rolled in
to only the top "A" rate for each classification in Exhibit A, and
shall not increase any other rates. All other Exhibit A rates shall be
fixed for the duration of this Agreement.

-44-
<PAGE> 49
EXHIBIT "B"

1. Except as provided otherwise, for the term of this contract, all newly
hired employees will be considered as Assistants in the classification
they are hired into for the first sixty (60) days worked and will be
paid a starting rate of $7.50 per hour during said period.

2. After successful completion of the 60th work day probationary period,
the employee's title will be changed from Assistant to reflect the
classification in which they are employed. Current General Laborer
and/or Assistant employees will, effective the first Monday following
ratification of the New Agreement, be classified as to the job
classification they have been working in or as otherwise agreed to by
the parties.

3. All such employees will have job bidding rights after one (1 ) year as
members of the bargaining unit, and if awarded a job under the bidding
or training procedure, will no longer be subject to the progression
system contained herein, and will progress to the respective bid
classification rate(s) in accordance with the provisions of Exhibit "A"
with credit given for time spent in their grade level, if any.

4. After completion of the progression period provided for below, such
employee(s) who have not bid out of their Assistant classification will
be moved upward through the classification to the appropriate grade
levels as defined under Exhibit "A".

5. Any employee hired hereunder, or currently holding a classification
containing a training level, will be advanced to the minimum of said
level at the conclusion of one (1) year as a member of the bargaining
unit in accordance with the Special Trainee rates established in
Exhibit "A" and progress upwards accordingly. In addition, all current
trainees will be credited with all time so spent towards progression in
their respective classification.

It's further agreed that any employee in a classification containing a
training level who has between twelve (12) and/or twenty-four (24)
months of seniority will, as provided for herein, be paid a "Special
Trainee" rate of twenty-five (25) cents per hour added to the assistant
wage rates, until the conclusion of the employee's first twenty-four
(24) months of seniority. The Special Trainee rate shall supersede any
other contract rate during this period. Following the first
twenty-four (24) months the employee shall assume the minimum
applicable trainee rate for the classification. Such employees shall
be given credit for all time in excess of twelve (12) months toward
training.

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<PAGE> 50
6. All such employees referred to herein shall receive all general wage
increases that occur on or after their date of hire. All such
employees shall receive all cost-of-living adjustments that occur on or
after their date of hire.

All such employees will be subject to the merit progression program
after they have completed their probationary period and joined the
Union.

7. In no event will an employee's rate of pay be reduced as a result of
this progression program and current trainees and assistants will
continue to progress accordingly.

PROGRESSION RATES OF PAY

<TABLE>
<S> <C>
First sixty (60) days of work $7.50
Completion of probation & joining the Union $8.25
Six (6) months after joining the Union $9.00
Twelve (12) months after joining the Union $9.50
Eighteen (18) months after joining the Union $10.00
Twenty-two (22) months after joining the Union class/min.
</TABLE>

8. It's agreed that new employees hired hereunder that are "qualified" for
the job into which they are hired, may be advanced more rapidly and/or
be paid a higher starting rate where in cases their on-the-job skills
demonstrate such an increase is warranted.

The following general wage increases shall become effective as stated
during the term of this Agreement.

Effective March 15, 1996 .15 per hour
Effective March 15, 1997 .15 per hour

MERIT PROGRESSION

The merit review system will be established to reward those employees who
clearly demonstrate the dedication and ability to perform the skills required
for their respective classifications. Each employee will be provided with the
skill requirements for each classification and grade level. The Company will
encourage and promote employee improvement through education and on-the-job
training. It is the intent and purpose of this merit program to upgrade
employees who are below maximum rate. The Company will not act in an arbitrary
or discriminatory manner in the application of this merit program.

-46-
<PAGE> 51
(a) All employees will be reviewed every six (6) months. The purpose of
this program shall be to formally review in writing each employee's
progress in their achievement of:

1. Quantity of work.

2. Quality of work.

3. Attendance record.

4. Accuracy and promptness in keeping work related job forms and
time tickets.

5. Cooperation and reliability.

(b) The employee and his/her supervisor will set future objectives to be
completed or have progress on within the next six (6) month period.

(c) Employee will provide feedback or suggestions to improve their ability
to work together and to improve overall plant efficiency.

(d) The employee who disagrees with his/her evaluation may ask to be
reviewed jointly by the supervisor and his/her area committeeperson.

(e) The attached Exhibit "C" will be the evaluation form utilized for all
reviews. (use current form)

(f) All employees whose rate of pay is less than maximum for his or her job
classification progression level shall be eligible for a merit increase
of .10 to .20 cents per review in accordance with subparagraphs (h) and
(i) in this section. An employee whose merit increase advances him/her
to the top of his/her progression level (i.e., A, B, C or Trainee under
Exhibit "A") is not eligible for further merit increases until the time
period requirement in his/her progression level has been satisfied and
the employee is advanced to the next progression level.

(1) The score on the review will be 5 points to be entitled for
.10 cents.

(2) 8 points to 11 points will be the range for .15 cents.

(3) 12 points and above will be the range for .20 cents.

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<PAGE> 52
(4) The employee must score at least one (1) point on each of the
first four (4) objectives to be eligible for a merit increase.
If the employee does not score a point on the fifth (5th)
objective, he/she shall receive fifty percent (50%) of the
calculated increase.

(g) Employees receiving four (4) or less will be reviewed every three (3)
months until performance improves. The supervisor and one (1) committee
member will review this employee's progress with the employee affected.

(h) For the term of this Agreement, the merit increases will be capped at
twenty-five (25) cents per year, for a total of seventy-five (75) cents
except as provided in subparagraph (i). This cap will be the most any
employee subject to merit reviews will be allowed for any one (1)
contract year period.

(i) For the term of this Agreement, employees within the "A" progression
level of a job classification shall, while within that classification,
be eligible for a thirty-five (35) cent maximum merit increase per year
for a total of $1.05 (maintaining the present maximum of twenty (20)
cents per review).

(j) To be eligible for a merit increase an employee must work a minimum of
sixty (60) days in the six (6) month merit review period, and must
maintain 39.2 hours per week average minimum attendance (as computed
according to the Attendance Policy) during the merit review period.

-48-
<PAGE> 53
ARTICLE XXIV

DURATION AND TERM OF AGREEMENT

24.1

This Agreement signed this 15th day of March, 1995, shall be effective from the
date of execution and shall remain in force and effect until midnight March 15,
1998. At the end of said period and at the end of each yearly period
thereafter, this Agreement shall be renewed automatically for periods of one
(1) year, unless either party gives written notice to the other party of its
desire to modify, amend, or terminate the Agreement, at least sixty (60) days
prior to the expiration date or yearly anniversary date that the Agreement will
terminate.

SIGNED FOR THE COMPANY

/s/ Robert D. Lisk
- --------------------------------------------------------------------------------
Robert D. Lisk, General Manager, Auto-Air Composites, Inc.

/s/ James H. Stewart
- --------------------------------------------------------------------------------
James H. Stewart, Senior Director FAA Overhaul & Repair Auto-Air Composites,
Inc.

/s/ Arnold E. Kartub
- --------------------------------------------------------------------------------
Arnold E. Kartub,
Director of Personnel, Auto-Air Composites, Inc.

/s/ David J. Houston 7/27/95
- --------------------------------------------------------------------------------
David Houston, Attorney, Auto-Air Composites, Inc.

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<PAGE> 54
SIGNED FOR THE UNION, LOCAL LODGE 2184

/s/ Wayne Eifler
- --------------------------------------------------------------------------------
Wayne E. Eifler, DBR

/s/ Priscilla McMullen
- --------------------------------------------------------------------------------
Priscilla L. McMullen, Local President

/s/ Allen Sklapsky
- --------------------------------------------------------------------------------
Alan P. Sklapsky, Committee Chairperson

/s/ Bobby J. Williams
- --------------------------------------------------------------------------------
Bobby Williams, Committeeperson

/s/ Russell D. Isham
- --------------------------------------------------------------------------------
Russell D. Isham, Committeeperson

/s/ Clint C. Baird
- --------------------------------------------------------------------------------
Clint C. Baird, Committeeperson

I. LETTER OF UNDERSTANDING

It is agreed that if the Company should, in the future, seek to institute an
apprenticeship program, the parties hereto will negotiate an apprenticeship
agreement which recognizes and includes the Federal Apprenticeship Standards.
When the Apprenticeship Agreement has been negotiated and agreed to by the
parties, it shall be attached hereto and made a part of this Agreement.

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<PAGE> 55
II. LETTER OF UNDERSTANDING

The attendance policy will remain in full force and effect for the duration of
this contact unless changed by mutual agreement of the parties.

III. LETTER OF UNDERSTANDING

It's understood and agreed that no employee shall suffer a reduction and/or a
set-back in his/her hourly rate or progression thereof, as a result of the
creation of any new or changed job classification as provided under Exhibit
"A".

It's further understood and agreed that where an employee has met or exceeded
the specified time period for moving from one pay level to another within
his/her classification, they shall be advanced accordingly.

Red Line Rated employees, i.e., those employees currently six (6) in number,
shall continue to receive such hourly rates, plus all applicable increases such
as cost-of-living, general wage increases, and if applicable, merit increases
etc., until such time they shall voluntarily leave their current respective
classification on a permanent basis. In such event, they shall assume the
applicable rate of their new classification accordingly.

IV. LETTER OF UNDERSTANDING

It is agreed that except and to the extent modified and/or amended, all other
terms, provisions, conditions and agreements expressed or in effect shall remain
in full force and effect, as is, for the duration of the 1995 Agreement between
the parties.

V. MEMORANDUM OF AGREEMENT

SUBJECT: Criteria re: Temporary Transfer for Overtime Eligibility Purposes:

The Union and Management hereby agree to administer the allocation of overtime
for temporarily transferred employees as follows:

The following two (2) conditions regarding the application of overtime for
temporary transferred employees shall be applied, thus:

1. For those employees transferred to a classification for a period
greater than thirty (30) calendar days.

1.A. All employees transferred to a classification for a period
greater than thirty (30) calendar days shall become eligible
for overtime assignments within the respective
classifications.

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<PAGE> 56
2. For those employees transferred to a specific job within a
classification for a period greater than seven (7) days worked, but
less than thirty (30) calendar days.

2.A. Employees transferred to a specific job outside their
respective classification shall not be eligible for overtime
assignments on such specific job for seven (7) days worked
unless all other employees within the classification have been
asked or are working overtime. In such case the employee shall
be eligible for the overtime assignment. Thereafter the
employee shall be eligible for overtime assignments in
accordance with paragraph 1 and 2 above. It is understood that
the seven (7) days worked prerequisite applies to each specific
job assignment.

Both 1A and 2A shall be subject to the following:

A. This application of overtime will only pertain to temporary transfers
as above provided.

B. This Agreement shall be subject to all other provisions of the
Contract, Article IX, inclusive.

C. All employees who are currently transferred shall receive credit for
time served in respective classification.

D. An employee shall not receive credit towards the thirty (30) days for
vacation, leave of absence, absenteeism, sick leave or lay-off.

E. A separation from the job or classification, to which transferred,
whichever the case may be, of more than thirty (30) calendar days in
the case of the seven (7) day period, and ninety (90) calendar days in
the case of the thirty (30) day period, will require a new 7 or 30 day
qualifying event.

VI. MEMORANDUM OF AGREEMENT

DRUG AND ALCOHOL TESTING

Section 1. No drug or alcohol test will be required absent "probable
cause," which is defined as when a qualified management person
has observed and can substantiate specific behavioral,
performance, or contemporaneous physical indicators of drug
and/or alcohol use.

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<PAGE> 57
Section 2. In the event a properly tested employee tests positive to job
impairment for alcohol (0.04% blood alcohol level) or tests
positive to job impairment for the existence of illegal drugs
or controlled substances (e.g., marijuana, cocaine,
phencyclidine, opiates, amphetamines, etc.), the employee is
subject to the following measures:

First Positive Test. Referral to and must successfully complete the
treatment prescribed by a trained substance abuse professional.

An employee who successfully completes treatment prescribed by a
trained substance abuse professional may return to work upon
presentation of proof of the completion of all requirements of that
program. An employee who has a recommendation from such professional
to return to work while continuing to undergo prescribed treatment may
return to work by agreeing in writing to follow and complete the
prescribed treatment, as incorporated in a Memorandum of Agreement
between all parties.

An employee who refuses to enter or complete prescribed treatment
except for good cause shall be subject to immediate dismissal.

Second Positive Test. A second positive test pursuant hereto within
five (5) years shall result in immediate discipline up to and including
dismissal.

Section 3. Employees required to take a drug or alcohol test will be paid
for all time lost from work directly attributable to
collection of the test sample.

Section 4. Test results will be disclosed only to necessary management
personnel and the Union Shop Chairman and International
Representative, and to any necessary other persons on a need
to know basis. Test results will be maintained in a
confidential file separate from an employee's personnel file.

Section 5. This Memorandum of Understanding shall not reduce the rights
of the Company, the Union, or the employee, regarding any
testing or related procedures required by or pursuant to law
or regulation.

VII. MEMORANDUM OF AGREEMENT

Employees who have to travel away from home overnight or for extended periods
of time to perform work for Auto-Air shall be compensated for time and expense
as follows:

For traveling, the expenses of airfare and other transportation shall be paid
for by the Company. Where an employee elects to use their own vehicle, the
employee shall be compensated at the rate of twenty eight (28) cents per mile.

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<PAGE> 58
For lodging, arrangements for lodging shall be made by the Company. Auto-Air
will pay the usual and customary expenses for hotels and motels.

For expenses, employees shall be reimbursed against receipts. These expenses
for meals and/or other sundry expenses should not normally exceed twenty-five
($25) dollars per day. For accounting purposes, employees shall retain
receipts from the trips and submit the receipts to accounting upon returning to
Auto-Air.

For time keeping, employees shall give a detailed description on their time
tickets of the hours spent in flight, awaiting connections, in transit to the
airport or home, or directly engaged in work.

Rate of compensation for all travel time connected to travel away from home
overnight shall be paid at the employee's normal straight time rate.

The Company agrees to allocate such travel time as equitably as affected
employees skills permit, consistent with the needs of the job requirement.

ATTACHMENT I

AUTO-AIR COMPOSITES, INC.
401 K EMPLOYEE SAVINGS AND INVESTMENT PLAN
SUMMARY DESCRIPTION

401K Employee Savings and Investment Plan provides a way for you to save for
your future financial security while at the same time enjoying significant tax
advantages:

Subject to applicable law, as a participant in this plan, if you elect to join:

* You will save for your future through convenient salary reductions.

* You will obtain an immediate tax benefit on the money you contribute to
the plan.

* You will be able to start saving with as little as two (2%) percent of
your pay or as much as fifteen (15%) percent of your pay, but no more
than $8,728.00 in any one year.

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<PAGE> 59
* Your account balance will be invested for future growth, according to
your choice from the plan's three investment funds. Allocations to a
particular fund shall be zero (0%) percent, twenty-five (25%) percent,
fifty (50%) percent, seventy-five (75%) percent or one hundred (100%)
percent of such contributions.

* Earnings on your investment will grow tax free.

* You will be able to borrow from your plan account balance.

* You may be eligible for favorable tax treatment when you receive a
distribution from the Plan.

* Your account balance is payable to you when you leave the Company for
any reason, or to your beneficiary in case of your death.

* Participants Elective Deferral Account shall be one hundred (100%)
percent vested and nonforfeitable at all times.

* With written consent of spouse, a participant may elect to withdraw up
to an amount equal to the balance credited to their account.
Withdrawals for this purpose are to meet immediate and significant
financial hardship.

* An employee may elect to drop from the Plan at any time.

* The Plan shall not be amended, terminated or modified except as
required by law during the term of this Agreement.

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<PAGE> 60
EMPLOYEE PERFORMANCE APPRAISAL

EMPLOYEE NAME:
------------------------------------------------------------------

CLASSIFICATION:
-----------------------------------------------------------------

PERIOD COVERED:
-----------------------------------------------------------------

DATE:
---------------------------------------------------------------------------

1. QUANTITY OF WORK:

O 1 2 3
Unsatisfactory Satisfactory Good Excellent
---------

2. QUALITY OF WORK:

O 1 2 3
Unsatisfactory Satisfactory Good Excellent
---------

3. ATTENDANCE RECORD:

O 1 2 3
Unsatisfactory Satisfactory Good Excellent
O - 39.19 39.20 - 39.60 39.61 - 39.80 39.81 - 40.0
---------

4. ACCURACY AND PROMPTNESS IN KEEPING WORK RELATED JOB FORMS AND TIME
TICKETS:

O 1 2 3
Unsatisfactory Satisfactory Good Excellent
---------

5. COOPERATION AND RELIABILITY:

O 1 2 3
Unsatisfactory Satisfactory Good Excellent
---------

Total Points
---------

MERIT INCREASE APPROVED: Yes No
------ -------

SUPERVISOR:
---------------------

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<PAGE> 61
NEW ATTENDANCE POLICY EFFECTIVE APRIL 1, 1992
ATTENDANCE POLICY - HOURLY EMPLOYEES

PURPOSE: To establish and maintain an equitable policy to ensure an efficient
operation.

1. General Policy
2. Perfect Attendance
3. Excused & Unexcused Absences
4. Call-In Policy
5. Make-Up Policy

1. STATEMENT & POLICY

It is the policy of the Company to encourage habits of good attendance
and punctuality on the part of its employees. Management recognizes
that circumstances beyond an employees' control may cause him/her to be
absent from work for all or part of a day. However, unauthorized
absence or excessive tardiness cost us all money and will not be
tolerated. The established work day shall consist of eight (8) hours
and the established work week shall consist of five (5) eight (8) hour
days, Monday through Friday inclusive (page 18, Section 9.1 of
Contract). Therefore, effective February 1, 1988, the Company affirms
its 40 HOUR WORK WEEK POLICY.

2. PERFECT ATTENDANCE TIME (P.A.T.)

Any employee who works a perfect 40 hour work week will earn (2.0)
hours per each perfect work week to be used throughout the calendar
year. Employees will be permitted to accumulate up to a maximum of 104
hours to use or be paid for at the end of a quarter or calendar year
subject to paragraph F below. This earned time must be used at a
minimum of one hour increments prior to the end of the first quarter of
the following calendar year, effective with the beginning of the 1995
calendar year.

3. EXCUSED ABSENCES

A. EXCUSED ABSENCES FOR THE WEEKLY AVERAGE AND FOR EARNING P.A.T.

Paid holidays in accordance with Paragraph 11.1 of the Agreement.

Paid funeral in accordance with Paragraph 16 of the Agreement.

Paid vacation time.
Paid jury duty.

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<PAGE> 62
Union business for conferences and education.

Attending classes at the request of and approved by the Company.

*The employee must provide proof and will be excused only for
the time compensated by the court. The employee will be
expected to return to work within a reasonable time (1 to 1 1/2
hrs.) if excused for the day, from jury duty.

B. EXCUSED ABSENCE FOR WEEKLY AVERAGE

These absences will not earn P.A.T. and will not be charged with earned
P.A.T.:
- Lack of work and being sent home by the Company.
- Personal leave of absence.
- Approved excused absences for attending classes other than
those referenced in subparagraph A, above.
- Military service, supported by verification.
- Court appearances supported by written verification from the
court.
- Leaving two (2) hours early before a holiday.
- Industrial injuries/illness.
- A family related emergency or an urgent or compelling
circumstance shall be excused if proof of such is turned in
within two (2) days after the employee has returned to work.
- Disciplinary suspension.
- Illness/injury disability of the employee only must be
supported by a doctor's certificate stating the disability
dates, that the employee was disabled for a partial or whole
day due to illness or injury, and must be turned in the day
returning, to be excused. Employees with a bona fide pattern
of chronic absenteeism will also be required to furnish the
Company with a diagnosis on the medical excuse.
- Paternity leave for birth or adoption limited to two (2) days.
- Unpaid funeral leave limited to one (1) day.
- Necessary travel time for paid or unpaid funeral leave.

C. EXCUSED ABSENCE(S) FOR WEEKLY AVERAGE

These absence(s) will not earn P.A.T. and shall automatically be
charged with P.A.T. accrued to the date of the absence:

Appointments for self or family where the employee misses a
partial or full day of work. Unexcused Hours (including
unexcused leaving early).

If no P.A.T. is available, the unexcused absence shall be subject to
the attendance policy.

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<PAGE> 63
D. Earned P.A.T. shall not be charged to designated absences in Paragraph
A & B of this section or tardies as defined in 5.A. Earned P.A.T. in
hourly increments shall automatically be deducted from the designated
absences in Paragraph 3.C.

Employees with sufficient P.A.T. to cover designated absences in
Paragraph 3.C will not be expected to furnish verification. These
P.A.T. hours shall be used for all necessary appointments.

E. Although no proof is necessary to take this time off, an employee MUST
let his/her supervisor know at least four (4) hours in advance except
for reasons beyond the employee's control (or as otherwise excused by
the supervisor) that he/she will be leaving for whatever time is
necessary for a certain day. If the supervisor is not notified IN
ADVANCE, except as provided above, this time off will be considered
UNEXCUSED and the employee will be charged with double the hours of
P.A.T. with a minimum of four (4) to a maximum of eight (8).

An employee who leaves early with notification who has insufficient
P.A.T. to cover all the unexcused absence shall be charged to the
extent of the unexcused absence time, but not a tardy.

An employee who leaves early without notification who has insufficient
P.A.T. to cover all the unexcused absence shall be charged to the
extent of the unexcused absence time or a tardy, but not both.

F. Those employees who have achieved perfect attendance for an entire
quarter and have not used ANY of their P.A.T. during that quarter may
elect to be paid 10 hours at their present rate of pay and lose
twenty-six (26) hours of P.A.T. Employees who do not have perfect
attendance for the quarter and employees with perfect attendance who
elect not to be paid shall carry over their P.A.T. time into the next
quarter. Only perfect attendance quarters shall be eligible for
payment.

G. Employees experiencing bona fide chronic absenteeism may receive
disciplinary action pursuant to the attendance policy. Any such action
shall be subject to Article VI, Policy Grievances section "sufficient
and just cause" in the Agreement.

H. Time off related to long term disability will be excused due to the
fact that it is part of the paid disability. This time is excused for
the weekly attendance average but will not count toward perfect
attendance. Education (except as provided by 3.A above) and medical
leaves of absence will also not be allowed time toward perfect
attendance although it will be considered excused for the weekly
attendance average in accordance with Paragraph 3.B.

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<PAGE> 64
I. No absence is automatically considered to be "excused" except those as
stated above and in the contract.

J. P.A.T. accumulates from the hire-in date. However, an employee is not
eligible to use any P.A.T. until he/she has joined the Union.

K. Once an employee agrees to work overtime pursuant to paragraph 9.6 of
the Contract, that employee may not use P.A.T. for the unexcused
scheduled overtime hours not worked.

4. CALLED IN ABSENCE OR TARDINESS

Employees shall call the automatic answering machine during the first
hour of the work day when they are going to be absent. THE TELEPHONE
NUMBER TO CALL IS: 393-4045. When you call in, state your name, the
reason for your tardiness or absence and state if you plan on using
earned time for this particular situation. Failure to call in with
this information will count as unexcused time. You will not be able to
use earned time unless advance notice is given. A call-in will count
as advance notice if the correct procedure is followed.

Employees who for any reason will be delayed in reporting for work more
than a few minutes are required to call their supervisor to explain the
circumstances. Employees who DO NOT report for work and have not
called in within 60 minutes of their shift time to notify the Company
of their tardiness and/or absence will be considered tardy pursuant to
5.A.

Employees whose duties do not require them to leave the building in
which they work must NOTIFY their supervisor in order to leave the
Company during work hours except for scheduled lunch breaks.

5. REGULAR WORK HOURS

A. Employees shall not be permitted to work any period of time beyond the
normal quitting or starting time for the purpose of making up time lost
due to tardiness or unauthorized absence.

If an employee is tardy, he/she cannot work past the normal eight (8)
hour shift time just for the purpose of making up time lost due to
being tardy. If such an employee is on authorized overtime, he/she may
work up until the end of the shift for the scheduled overtime.
However, this employee is docked on overtime and is considered late on
his/her attendance record. A tardy is defined as being late for work
within the first sixty (60) minutes after the scheduled starting time,
or failure to clock in on arrival or clock out when leaving the
premises. Continued unexcused absence beginning with the second hour
will be handled pursuant to Paragraph 3.C.

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<PAGE> 65
B. The minimum acceptable attendance is 98% per week (39.2 hours/week).
If an employee has unexcused cumulative absences in excess of 6.4 hours
in any eight (8) week period, which are not chargeable to P.A.T.,
disciplinary action will be taken. The maximum acceptable number of
times tardy in any eight (8) week period is four (4) times tardy. Any
eight (8) week period is considered the last eight (8) weeks on a
constant running basis. Anything below this acceptable percentage or
above the number of tardies will result in disciplinary action. All
employees are expected to keep track of their own time. Thereafter,
earned time will be posted on a monthly basis the first week following
the end of the month. However, when earned time is used, the
individual employee must fill out a Perfect Attendance Hours Request
form and will receive a copy of remaining hours available to him/her.

C. PROBATIONARY PERIOD

If an employee is written up due to tardiness and/or absenteeism the
policy of a ten (10) month/four (4) week probation remains effective.
This period will be a running four week period. During each running
four (4) week period during the ten month probation period, the
employee must maintain a 39.2 hour/week average and not be absent in
excess of 3.2 hours or more unexcused and not chargeable to P.A.T.
during any four (4) week running period. The maximum acceptable number
of times tardy in any four (4) week running period shall be two times.

-61-
<PAGE> 66
GRACE PERIOD - EFFECTIVE SEPTEMBER 26, 1988

A grace period for punching the time clock has been established. The grace
period will be available:

1. When punching in at the beginning of your shift,

2. When punching in after lunch.

The grace period can be used either at the start of a shift or after lunch, but
cannot be used on the same day for both. THE GRACE PERIOD CANNOT BE SPLIT OR
SAVED.

An example for shifts beginning at 6:30 a.m.: Start time registers on the time
card as 6:50. Under the grace period, you will not be penalized for your
tardiness until the elapsed time on your time card registers 6:56 or more. At
6:56, the time is at least thirty three minutes and thirty-six seconds past the
hour.

Also, for the 6:30 a.m. to 3:00 p.m. shift's lunch period, you will not be
penalized for tardiness until the registered time on your time card reads
12:14, the time is at least eight minutes and thirty-six seconds past the hour.

There is no grace period for punching out early prior to your lunch period or
at the end of your shift. If any of these incidents occur, you will be docked.

The Company and the Union have endorsed this policy. The Company and the Union
also request that the policy not be abused.

Richard Lund Jean McMullen
John Scholar Al Sklapsky
John Williams, III Bill Adair

ADDITION TO GRACE PERIOD - EFFECTIVE MARCH 15, 1992

The grace period shall not be used more than one (1) time per
week. Additional late punches will be treated as tardies.
The Company and the Union have endorsed this policy.

-62-

<PAGE> 1
Exhibit 13.1
1995 Cade 10-K
<PAGE> 2

Dear Shareholders:

For the year ended December 31, 1995, your Company made significant
improvements in revenue, but sustained a loss of ($0.02) per share due to a
write-off of certain costs during the second quarter at our Cade Composites
subsidiary.

Sales increased 49%, from $20,460,000 in 1994 to $30,445,000 in 1995, primarily
due to the acquisition of H.A.C. and improving conditions in the aerospace
industry. Operating income improved from $539,000 in 1994 to $1,070,000 in
1995, prior to the write-off of $1,130,000. Consolidated results for the year
after the write-off was a net loss of ($382,000) or ($0.02) per share, compared
to net income of $158,000 or $0.01 per share in the prior year.

A review of the prospects of our various operating units gives us optimism for
a return to sustained earnings for Cade Industries. Our H.A.C. subsidiary,
acquired at the end of 1994 has fully met our expectations. We have increased
revenues while lowering costs, increasing efficiencies and posting a positive
operating contribution of 6.2%. This was only the first step in rebuilding
H.A.C. and we fully expect to see enhanced returns in the years to come.

The Auto-Air subsidiary has been the key performer for many years. Although
Auto-Air's revenue base was severely impacted by the industry's downturn over
the last several years, the management team has successfully rebuilt the
customer base that formerly relied heavily upon one customer and one product.
Auto-Air's current customer base and product mix has been diversified, with no
one customer or product contributing more than 25% of its 1995 sales. Prices
have stabilized and costs have improved, resulting in a 1995 operating income
contribution of 9.4% for Auto-Air. The outlook for 1996 at Auto-Air is very
positive. Revenue is forecasted to increase by 10-15%, with solid gains
expected in operating margins.

1995 CADE Annual Report
- --------------------------------------------------------------------------------

1
<PAGE> 3
Our Cade Composites subsidiary severely impacted our consolidated results in
1995. Management's decision to aggressively invest in risk sharing programs
resulted in costs that were not recoverable against the program's future
revenues. The result was the write-off of certain of these costs which forced
us to seriously consider all alternatives for this subsidiary. After a
thorough internal study, and with the assistance of outside help, we decided to
make the necessary internal changes and to continue operating at this location.
A new management team was recruited and an aggressive business plan was
implemented. The implementation of the business plan has resulted in
improvements in operating efficiencies and a reduction in costs of
approximately $900,000. These actions have led Cade Composites to expand its
customer base and to pursue several new product opportunities that should
result in a positive contribution in 1996.

Cade Industries will start operations at its new subsidiary, Cade Commercial
Composites, in the third quarter of 1996. We plan to be up to full production
by December of 1996 with a product for the Chrysler Prowler. This subsidiary's
mission will be to provide world class, low cost manufacturing of commercial
products. We believe that our products in this new market have excellent
growth potential with current contract awards in excess of $6.0 million.

As important as the internal improvements are, the overriding key to Cade
Industries' earnings growth is still the economic health of the airline
industry. After several years of major losses within the airline industry, the
majority of the world's carriers have reported solid earnings in 1995. The
airline industry's earnings improvement is a favorable signal that our industry
will be growing. This recovery in earnings has already translated into
increased commercial aircraft orders and should provide a resurgence for Cade
Industries in new component orders.

The Company's current backlog is reflective of the market's improvement with
scheduled orders of $12.8 million, which does not include an additional $10.0
million of scheduled orders on long-term agreements.

Cade Industries' primary products and services are positioned to leverage the
growth within the aerospace industry. The demand for composite design and
fabrication is growing within engine, airframe, test nacelle and repair and
overhaul markets. Our capital investments in tooling, equipment, and design in
1995 will provide a positive competitive advantage within the industry.

The outlook for 1996 is encouraging with improved earnings forecasted as a
result of the improving market conditions and our expansion into new markets in
commercial applications.

We thank our shareholders, customers, and employees for their support, and we
look forward to a strengthening marketplace in 1996.

/s/ Terrell L. Ruhlman /s/ Richard A. Lund
------------------------------- -------------------------------
Terrell L. Ruhlman, Richard A. Lund,
Chairman of the Board President
and Chief Executive Officer and Chief Operating Officer

1995 CADE Annual Report
- --------------------------------------------------------------------------------

2
<PAGE> 4
SELECTED FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
- ---------------------------------------------------------------------------------------------
1995 1994(1) 1993 1992 1991
- ---------------------------------------------------------------------------------------------
(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
SELECTED OPERATING DATA
Sales $ 30,445 $ 20,461 $ 16,184 $ 26,287 $ 30,245
Income (loss) before
cumulative effect of
change in method of
accounting for income
taxes (382) 159 (869)(2) 1,944 2,820
Income (loss) per share before
cumulative effect of
accounting change (0.02) 0.01 (0.05)(2) 0.12 0.17
Net income (loss) (382) 159 (689) 1,944 2,820
Net income (loss) per share (0.02) 0.01 (0.04) 0.12 0.17

SELECTED BALANCE SHEET DATA
Current assets 13,653 14,534 13,183 12,713 13,402
Total assets 32,685 32,937 24,890 24,055 24,086
Current liabilities 6,592 7,969 5,245 2,621 3,719
Working capital 7,061 6,565 7,938 10,092 9,683
Long-term obligations 6,433 4,930 3,046 4,146 5,056
Shareholders' equity 19,660 20,038 16,599 17,288 15,311
</TABLE>

(1) Reflects operations of Pollux Corporation from date of acquisition
(December 1, 1994).
(2) Effective January 1, 1993 the Company adopted FASB Statement No. 109,
"Accounting for Income Taxes."

MARKET PRICES

The Company's Common Stock is traded on the over-the-counter market (NASDAQ).
The approximate number of recordholders of the Company's Common Stock at
February 29, 1996 was 1,848. The Company presently intends to retain all
available funds for the development of its business and for use as working
capital and does not expect to pay dividends in the foreseeable future. There
were no cash dividends paid in 1995, 1994 or 1993.

Firstar Trust Company is the stock transfer agent for the Company's Common
Stock.

The following table displays the share prices for the Company's Common Stock in
1995 and 1994.

<TABLE>
<CAPTION>
1995 1994
- -----------------------------------------------------------------------
HIGH LOW HIGH LOW
- -----------------------------------------------------------------------
<S> <C> <C> <C> <C>
First Quarter $23/32 $19/32 $1 4/32 $ 23/32
Second Quarter 26/32 21/32 1 26/32
Third Quarter 28/32 19/32 30/32 22/32
Fourth Quarter 28/32 18/32 25/32 20/32
</TABLE>

1995 CADE Annual Report
- --------------------------------------------------------------------------------
3
<PAGE> 5
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, certain items from
Cade Industries, Inc.'s ("Company") Consolidated Statements of Operations
expressed as a percentage of net sales, and the percentage changes in the
dollar amounts of such items from the prior period. Effective December 1, 1994,
the Company acquired Pollux Corporation, whose operations are conducted through
its wholly-owned subsidiary, H.A.C. Corporation ("H.A.C."). The operating
results of H.A.C. are included with those of the Company from the date of
acquisition.
<TABLE>
<CAPTION>
PERCENT INCREASE
PERCENTAGE OF NET SALES (DECREASE)
YEAR ENDED DECEMBER 31 IN DOLLAR AMOUNTS
------------------------- --------------------------------
1995 1994 1993 1995 vs. 1994 1994 vs. 1993
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Sales 100.0% 100.0% 100.0% 48.8% 26.4%
Costs and Expenses:
Cost of Sales 82.4% 78.1% 85.5% 56.9% 15.5%
Selling, General and
Administrative Expense 17.8% 19.3% 20.7% 37.8% 17.8%
Net Interest Expense 2.4% 1.7% 2.2% 105.0% (2.6%)
----- ----- -----
Total Costs and Expenses 102.6% 99.1% 108.4% 54.0% 15.6%
----- ----- -----
Income (Loss) Before
Income Taxes and Cumulative
Effect of Change in Method of
Accounting for Income Taxes (2.6%) 0.9% (8.4%) * *
Income Tax Expense(Credit) (1.3%) 0.1% (3.0%) * *
Cumulative Effect of Change
in Method of Accounting
for Income Taxes -- -- (1.1%) * *
----- ----- -----
Net Income(Loss) (1.3%) 0.8% (4.3%) * *
===== ===== =====
</TABLE>
* Not meaningful to presentation

Cade is engaged worldwide in the design, manufacture and repair and overhaul of
high technology composite components for the aerospace, air transport and
specialty industries. Cade's core products include molded and bonded composite
jet engine components consisting of engine inlets, acoustical liners, fairings
and engine cases ("Gas Turbine Products"); metal fabricated and bonded
composite airframe components consisting of various control surface products,
access and landing gear doors and wing tips as well as auxiliary power unit
enclosures ("Airframe Products"); the repair and overhaul of commercial and
military gas turbine engine and airframe components ("Repair and Overhaul
Services"); and test nacelles used in the ground testing and overhaul of major
commercial jet engines and related ground support equipment ("Test Equipment").
These products are sold worldwide through the Company's internal sales force
and independent sales representatives to major engine equipment manufacturers,
airlines and overhaul facilities. For 1995, 1994 and 1993, sales of Gas
Turbine Products, Airframe Products, Repair and Overhaul Services and Test
Equipment as a percentage of total sales were as follows:
<TABLE>
<CAPTION>
PERCENTAGE OF TOTAL NET SALES
-----------------------------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Gas Turbine Products 25.7% 35.8% 41.4%
Airframe Products 24.8% 11.1% 12.6%
Repair and Overhaul Services 24.2% 7.2% 2.3%
Test Equipment 20.7% 35.3% 32.5%
---- ---- ----
95.4% 89.4% 88.8%
==== ==== ====
</TABLE>

1995 CADE Annual Report
- --------------------------------------------------------------------------------
4
<PAGE> 6
OUTLOOK AND BACKLOG

At December 31, 1995, the Company's backlog of orders was $12.8 million ($16.7
million at December 31, 1994) plus $10.0 million of scheduled orders under
long-term agreements ("LTA's"). Of the total year-end backlog (including
LTA's), $19.6 million is scheduled for shipment in 1996. The Company' s
backlog of $12.8 million includes only "firm" orders supported by customer
purchase orders with fixed delivery dates and excludes "blanket" purchase
orders against which customers issue production releases covering relatively
short time periods (LTA's). The decrease in order backlog at December 31, 1995
from 1994 primarily reflects the efforts by customers to reduce both inventory
levels and production lead times, increases in repair and overhaul sales which
generally have lead times of less than 60 days and improved business volumes
through LTA's. The Company's order backlog is subject to customer rights of
cancellation or rescheduling, although in certain cases the Company would be
entitled to receive termination payments. On the basis of current backlog and
LTA's, the Company anticipates 1996 sales to increase approximately 10-15% over
1995 sales levels.

1995 COMPARED TO 1994

Net sales in 1995 of $30,445,000 increased $9,984,000 or 48.8% from 1994, as
$10,266,000 of sales from H.A.C., which was acquired as of December 1, 1994,
more than offset reduced shipments of test nacelles and other ground support
equipment. The Company also had higher sales of gas turbine engine products and
airframe products. In addition, inclusion of H.A.C. resulted in higher sales
of military aircraft airframe components and repair and overhaul services in
1995, when compared to 1994.

Cost of sales for 1995 increased $9,095,000 or 56.9% from 1994, of which
$8,334,000 related to the operations of H.A.C. In addition, approximately
$960,000 of the 1995 increase in cost of sales related to the write-off in the
second quarter of certain costs at the Company's Cade Composites subsidiary
associated with work-in-process, non-recurring engineering charges, contract
termination costs, tooling investments, and prototype development costs. This
provision came as a result of the Company's ongoing review of development costs
and related project investments and the Company's best estimate of matching
such costs against future revenue. Excluding the results of H.A.C. and the
write-off at Cade Composites, cost of sales for 1995 decreased $199,000 or 1.3%
from 1994.

Cost of sales as a percentage of sales was 82.4% and 78.1% for 1995 and 1994,
respectively. Excluding the effect of H.A.C.'s operations and the write-off
at Cade Composites, cost of sales as a percentage of sales was 78.1% and 78.0%
in 1995 and 1994, respectively. The cost of sales percentage, including H.A.C.
but not the write-off at Cade Composites, for 1995 increased slightly during
1995 compared to 1994, primarily due to the inclusion for the full year of
H.A.C.'s operations whose current material and overhead cost percentages are
higher than the Company's historical cost relationships. Partially offsetting
the impact of H.A.C. on the cost of sales as a percentage of sales was a shift
in product mix at the Company's other manufacturing operations, resulting in a
larger portion of sales of gas turbine engine and airframe components which
have lower material and higher labor contents.

Selling, general and administrative expenses ("administrative expenses") as a
percent of net sales were 17.8% ( 20.9% excluding H.A.C.) and 19.3% ( 19.6%
excluding H.A.C.) in 1995 and 1994, respectively. Actual amounts expended in
1995 increased by $1,489,000 from 1994 primarily as a result of the inclusion
of H.A.C. for the full year. The decreased percentage of administrative
expenses during 1995 compared to 1994 primarily is a result of H.A.C.'s lower
administrative expenses as a percent of sales when compared to the Company's
historical cost relationship, partially offset by both slightly increased
administrative cost expenditures in 1995 at the Company's other subsidiaries
and their slightly lower sales base over which to spread fixed costs.

Net interest expense as a percent of sales was 2.4% in 1995 compared to 1.7%
for 1994. This increase resulted primarily from higher borrowing (due in large
part to the acquisition of H.A.C.) and higher interest rates.

The Company had a net loss of ($382,000) in 1995 compared to net income of
$159,000 in 1994 due to the factors discussed above.

1994 COMPARED TO 1993

Net sales for 1994 increased by $4,277,000 or 26.4% from 1993, of which
$1,041,000 was attributed to the December 1, 1994 acquisition of H.A.C. The
remaining $3,236,000 of the increase, representing 20.0% of the 1993 net sales,
reflects higher sales of airframe and gas turbine engine components and
overhaul and repair services.

Cost of sales increased 15.5% or $2,147,000 (9.5% or $1,316,000 without regard
to H.A.C.) in 1994 from 1993 primarily as a result of the 26.4% increase in net
sales, but decreased as a percent of net sales to 78.1% (78.0% without regard
to H.A.C.) from 85.5% in 1993. Approximately 3.4% of the change in cost of
sales percentages related to 1993 inventory and development project write-offs
at the Company's Auto-Air subsidiary.
1995 CADE Annual Report
- --------------------------------------------------------------------------------
5
<PAGE> 7
Overhead cost of sales as a percent of net sales in 1994 decreased both as a
result of a lower labor cost percentage and the spreading of fixed
manufacturing costs over a much larger sales base. The increased sales in 1994
of gas turbine and airframe components moved the material and labor cost of
sales percentages closer to historical cost relationships. The 1993 cost of
sales percentage was negatively impacted by the write-off of obsolete and slow
moving inventory resulting from customer order cancellations and delays due to
the downturn in the air transport and aerospace industries, and the charge-off
of certain costs associated with development projects for which future revenue
generation was uncertain.

Selling, general and administrative expenses ("administrative expenses") as a
percent of net sales decreased to 19.3% in 1994 from 20.7% in 1993, while
actual amounts expended increased by $600,000 in 1994 to $3,940,000. The
decreased percentage resulted primarily from the significant increase in 1994
sales and the corresponding spreading of administrative expenses over a larger
sales base. This decrease in the administrative expense percentage was
partially offset by increased commission expense as a result of a change in the
customer mix of test nacelle equipment sales (3.7% of net sales in 1994
compared to 1.9% in 1993). The Company pays commissions only on certain of its
products and only to certain of its customers.

Net interest expense as a percent of net sales decreased to 1.7% in 1994 from
2.2% in 1993, while the actual net amount expended remained relatively
constant. The slight decrease in actual amounts expended resulted from reduced
levels of average indebtedness, the effects of which were partially offset by
increased interest rates. The decreased percentage in 1994 resulted primarily
from the significantly higher sales volume.

The Company had net income of $159,000 in 1994, compared to a net loss of
($689,000) in 1993 due to the factors discussed above. The 1993 net loss was
reduced by a $180,000 cumulative effect adjustment recorded due to the adoption
as of January 1, 1993 of FASB Statement No. 109 "Accounting for Income Taxes".

LIQUIDITY AND CAPITAL RESOURCES

The Company has met its working capital and longer term capital needs through
short and long-term bank debt, a tax-exempt bond issue and leasing arrangements
on certain items of capital equipment. The Company financed its 1994
acquisition of Pollux Corporation by the issuance of its common stock and the
assumption of debt.

Capital has principally been used to fund the Company's business development
and capital expenditure programs. Management presently expects to continue to
invest, at reduced levels, in production technology, tooling and equipment for
improved manufacturing efficiency and quality enhancement. The Company will
also continue to seek acquisition opportunities to expand and/or diversify its
markets.

The Company maintains a $4,000,000 unsecured credit line with a bank,
$2,700,000 of which was available at December 31, 1995. The Company also has
outstanding approximately $4,208,000 of secured, long-term debt, $652,000 of
tax-exempt bonds and $2,861,000 of subordinated notes.

Management believes that expected increased revenues and continued emphasis on
working capital management will lead to improved cash flow from operations. As
a result, the Company's cash flow from operations and its current credit
facilities are believed to be adequate to finance its current operations, the
operations of its new Cade Commercial Composites subsidiary, scheduled to begin
operation in late 1996, and capital expenditure requirements at present and
forecasted levels.

EFFECTS OF INFLATION

The Company had entered into multi-year sales agreements with fixed prices in
its core business of gas turbine engine components. These contracts were
negatively impacted by material and labor cost increases, but the impact was
partially offset by long-term material purchase agreements with suppliers and
recently renegotiated sales price increases on certain of the multi-year sales
agreements. In addition, Cade continuously reviews cost increases and attempts
to reflect these projected cost adjustments in proposals for new orders. As a
result, management believes that general inflation did not have a material
impact on the Company's operations or financial condition during the periods
discussed.

1995 CADE Annual Report
- --------------------------------------------------------------------------------
6
<PAGE> 8
Cade Industries, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31
- --------------------------------------------------------------------------------
1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 187,485 $ 71,537
Trade accounts receivable 4,670,698 4,817,958
Inventories 7,918,135 9,321,289
Refundable federal income taxes 362,000
Deferred income taxes 379,000 153,000
Prepaid expenses and other current assets 136,105 170,375
----------- -----------
Total current assets 13,653,423 14,534,159

Property, plant, and equipment 15,758,999 15,551,872

Intangible and other assets
Goodwill 3,123,220 2,707,361
Other assets 148,863 143,491
----------- -----------
3,272,083 2,850,852
----------- -----------
$32,684,505 $32,936,883
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Note payable to bank $ 1,300,000 $ 3,100,000
Current portion of long-term debt 1,765,171 937,648
Trade accounts payable 1,685,313 2,552,679
Employee compensation and amounts withheld 614,739 633,736
Accrued expenses 963,747 507,568
Accrued income taxes 262,800 237,101
----------- -----------
Total current liabilities 6,591,770 7,968,732

Long-term debt 5,955,935 4,616,991

Deferred income taxes 477,000 313,000

Shareholders' equity
Preferred stock, 10% cumulative, non-voting,
stated value $300 per share; authorized
500 shares, none issued
Common stock, par value $.001 per share;
authorized 100,000,000 shares, issued
21,886,409 shares (1994-21,881,499 shares) 21,886 21,881
Additional paid-in capital 8,828,552 8,824,874
Retained earnings 11,063,804 11,445,847
----------- -----------
19,914,242 20,292,602
Less cost of common stock in treasury
(200,068 shares in 1995 and 1994) 254,442 254,442
----------- -----------
19,659,800 20,038,160
----------- -----------
$32,684,505 $32,936,883
=========== ===========
</TABLE>

See accompanying notes.

1995 CADE Annual Report
- --------------------------------------------------------------------------------
7
<PAGE> 9
Cade Industries, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
- ------------------------------------------------------------------------------------
1995 1994 1993
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
Sales $ 30,445,006 $ 20,460,680 $ 16,183,773
Cost of sales 25,075,996 15,981,016 13,834,185
------------ ------------ ------------
5,369,010 4,479,664 2,349,588

Selling, general, and
administrative expenses 5,429,585 3,940,385 3,343,700
------------ ------------ ------------

Income (loss) from operations (60,575) 539,279 (994,112)

Interest
Income 13,627 11,566 31,554
Expense (732,095) (362,084) (391,490)
------------ ------------ ------------
(718,468) (350,518) (359,936)
------------ ------------ ------------
Income (loss) before income
taxes and cumulative effect
of change in method of
accounting for income taxes (779,043) 188,761 (1,354,048)

Income tax expense (credit) (397,000) 30,000 (485,000)
------------ ------------ ------------

Income (loss) before cumulative
effect of change in method of
accounting for income taxes (382,043) 158,761 (869,048)

Cumulative effect as of January
1, 1993 of change in method
of accounting for income taxes 180,000
------------ ------------ ------------
Net income (loss) $ (382,043) $ 158,761 $ (689,048)
============ ============ ============
Weighted average number of
shares of common stock
outstanding 21,683,947 17,345,814 16,907,238
Net income (loss) per common share:
Income (loss) before cumulative
effect of accounting change $ (.02) $ .01 $ (.05)
Cumulative effect of accounting
change .01
------------ ------------ ------------
Net income (loss) $ (.02) $ .01 $ (.04)
============ ============ ============
</TABLE>

See accompanying notes.

1995 CADE Annual Report
- --------------------------------------------------------------------------------
8
<PAGE> 10
Cade Industries, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
COMMON STOCK
-------------------------- ADDITIONAL
NUMBER PAR VALUE PAID-IN RETAINED TREASURY
OF SHARES AMOUNT CAPITAL EARNINGS STOCK
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1992 17,087,306 $ 17,087 $ 5,532,873 $ 11,976,134 $(238,192)

Net loss for the year (689,048)
---------- ------------ ------------ ------------ ---------

Balance at December 31, 1993 17,087,306 17,087 5,532,873 11,287,086 (238,192)

Stock options exercised and
related repurchase 75,000 75 52,275 (16,250)
Net income for the year 158,761
Shares issued in connection with
acquisition 4,719,193 4,719 3,239,726
---------- ------------ ------------ ------------ ---------
Balance at December 31, 1994 21,881,499 21,881 8,824,874 11,445,847 (254,442)

Shares issued in connection with
acquisition 4,910 5 3,678
Net loss for the year (382,043)
---------- ------------ ------------ ------------ ---------

Balance at December 31, 1995 21,886,409 $ 21,886 $ 8,828,552 $ 11,063,804 $(254,442)
========== ============ ============ ============ =========
</TABLE>

See accompanying notes.

1995 CADE Annual Report
- --------------------------------------------------------------------------------
9
<PAGE> 11
Cade Industries, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
- -------------------------------------------------------------------------------------------------
1995 1994 1993
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $ (382,043) $ 158,761 $ (689,048)
Adjustments to reconcile net income
(loss) to net cash provided by (used in)
operating activities:
Depreciation and amortization 2,356,142 1,453,232 1,174,793
Provision (credit) for deferred
income taxes (62,000) 16,000 (73,000)
Cumulative effect of accounting change (180,000)
Changes in operating assets and liabilities,
net of effect of acquisition:
Trade accounts receivable 147,260 492,100 (495,596)
Inventories 973,154 381,213 (272,757)
Other current assets (327,730) 552,709 (307,053)
Trade accounts payable (867,366) (54,033) 262,293
Other current liabilities 462,881 227,915 (538,026)
----------- ----------- -----------
Net cash provided by (used in)
operating activities 2,300,298 3,227,897 (1,118,394)

INVESTING ACTIVITIES
Additions to property, plant, and equipment (2,424,229) (986,068) (1,346,738)
Acquisition of Pollux (73,497) (539,115)
Other (53,091) (24,239)
----------- ----------- -----------

Net cash used in investing activities (2,550,817) (1,549,422) (1,346,738)

FINANCING ACTIVITIES
Proceeds from long-term debt 3,600,000
Payments and refinancing of long-term debt (1,433,533) (903,446) (895,715)
Increase (decrease) in notes payable to bank (1,800,000) (771,126) 2,900,000
Change in unexpended restricted bond proceeds 153,383
Exercise of stock options and related repurchase 36,100
----------- ----------- -----------
Net cash provided by (used in) financing
activities 366,467 (1,638,472) 2,157,668
----------- ----------- -----------
Increase (decrease) in cash and cash
equivalents 115,948 40,003 (307,464)

Cash and cash equivalents at beginning of year 71,537 31,534 338,998
----------- ----------- -----------
Cash and cash equivalents at end of year $ 187,485 $ 71,537 $ 31,534
=========== =========== ===========

Cash paid (received) during the year for:
Interest $ 657,805 $ 356,948 $ 384,000
Income taxes, net of refunds received 89,984 (340,399) 164,000

Supplemental schedule of noncash
investing and financing activities:
Debt exchanged for or assumed in
acquisition $ 4,485,283
Fair market value of common stock
issued for acquisition $ 3,683 3,244,445
</TABLE>

See accompanying notes.

1995 CADE Annual Report
- --------------------------------------------------------------------------------
10
<PAGE> 12
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. CORPORATE STRUCTURE AND SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Cade Industries,
Inc. and its wholly-owned subsidiaries (Company or Cade); Auto-Air Composites,
Inc. (Auto-Air); Cade Composites, Inc. (CCI); Cade International, Inc. (CI) and
Pollux Acquisition Corporation (Pollux) and its wholly-owned subsidiary, H.A.C.
Corporation (H.A.C.). Intercompany accounts and transactions have been
eliminated in consolidation.

Cade is engaged worldwide in the design, manufacture, and repair and overhaul
of high technology composite components for the aerospace, air transport and
specialty industries. The Company's core products consist of original
equipment components for gas turbine engines, airframe, and auxiliary power
units. Its specialty niche products include ground based test nacelle systems
and repair and overhaul of commercial and military gas turbine engine and
airframe components. Through Auto-Air and H.A.C., Cade operates repair
stations under Federal Aviation Administration ("FAA") licenses. In addition
to FAA certification, Auto- Air and H.A.C. are certified by the European Joint
Airworthiness Authority.

The Company and its subsidiaries offer both manufacturing and design services
to the industries they serve. The design and manufacturing are interrelated
and the various significant operating locations have essentially the same
capability. In the opinion of management, the Company operates in a single
business segment.

Significant accounting policies are discussed below, and where applicable, in
the Notes that follow.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents includes short-term investments having maturity dates
of 90 days or less when purchased.

TRADE ACCOUNTS RECEIVABLE/REVENUE RECOGNITION

Trade accounts receivable represent amounts due from domestic and international
equipment manufacturers and air carriers serving the aerospace and air
transportation industries as well as from the U.S. Government under certain
long-term contracts. The Company generally does not require collateral from
its customers. Credit losses have been minimal.

Sales and income are generally recognized at the time products are shipped.
Certain production revenues related to long-term contracts (primarily U.S.
Government military contracts) are recognized using the percentage of
completion method based upon deliveries of finished units. Contract progress
billings in advance of deliveries are treated as deferred revenues and are
offset against inventoried contract costs in the Company's financial statements
($232,000 in 1994). Reserves for contract losses are accrued when estimated
costs to complete exceed expected future revenues.

Net sales to Pratt & Whitney, McDonnell Douglas, General Electric, and the U.S.
Government, with which the Company has long- standing customer relationships,
amounted to 20%, 5%, 7%, and 13% of 1995 consolidated net sales, respectively
(29%, 11%, 7%, and 3% in 1994, 36%, 13%, 12%, and 2% in 1993). Export sales by
the Company's domestic subsidiaries were $7,028,000, $5,776,000, and $2,937,000
for the years 1995, 1994, and 1993, respectively.

GOODWILL

Goodwill is being amortized over 30 to 40 years using the straight-line method.
Accumulated amortization was $536,000 and $445,000 at December 31, 1995 and
1994, respectively. It is the Company's policy to record goodwill only if the
undiscounted cash flows of acquired businesses over the remaining amortization
periods exceed such recorded amounts.

INCOME TAXES

Effective January 1, 1993, the Company changed its method of accounting for
income taxes from the deferred method to the liability method required by
Financial Accounting Standards Board Statement No. 109, "Accounting for Income
Taxes" (Statement 109). The cumulative effect of adopting Statement 109 as of
January 1, 1993 was to decrease the 1993 net loss by $180,000 or $.01 per
share.

Research and development credits are recorded using the flow-through method of
accounting whereby, in the year available for utilization, the credits are
applied as a reduction of income tax expense.
1995 CADE Annual Report
- --------------------------------------------------------------------------------
11
<PAGE> 13
SIGNIFICANT ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual amounts could differ from these estimates.

NET INCOME (LOSS) PER SHARE

Net income (loss) per share is based on the weighted average number of shares
of Common Stock outstanding during the year. The dilutive effect of Common
Stock equivalents was not material or such effect was antidilutive.

FAIR VALUE OF FINANCIAL INSTRUMENTS

In accordance with Financial Accounting Standards Board Statement No. 107,
"Disclosures About Fair Value of Financial Instruments," management has
determined that the carrying values of cash and cash equivalents, trade
accounts receivable and accounts payable approximate fair value due to the
short-term maturities of these instruments.

Management has also determined that the carrying value of its current and
long-term debt and note payable to bank approximate market value as they bear
interest at the bank's prime lending rate. It is not practical to estimate the
fair value of the subordinated notes due to these notes being non-marketable
and subordinated to all other debt.

NOTE 2. ACQUISITION

In December 1994, the Company acquired 100% of the outstanding shares of Pollux
Corporation in exchange for 4,719,000 of the Company's common shares valued at
$3,244,000 and the assumption of $4,485,000 of short and long-term debt
obligations. Pollux, through its wholly-owned subsidiary, H.A.C. Corporation,
overhauls, repairs and manufactures flight control surfaces for both commercial
and military aircraft.

The acquisition of Pollux has been accounted for using the purchase method of
accounting. The results of its operations have been included in the Company's
financial statements from the date of its acquisition.

The following unaudited pro-forma information sets forth the results of the
Company's operations as though the purchase of Pollux had been made at the
beginning of 1993.
<TABLE>
<CAPTION>
1994 1993
------------------------------------
<S> <C> <C>
Revenues $30,842,000 $27,188,000
Net loss (439,000) (2,054,000)
Net loss per share (0.02) (0.09)
</TABLE>
The above pro-forma unaudited results of operations are not necessarily
indicative of the combined operating results as they may be in the future or as
they might have been for the periods indicated had the acquisition of Pollux
been consummated at the beginning of 1993.

The purchase agreement provided for the contingent issue of up to 882,000 of
the Company's common shares to the former Pollux shareholders based on the
post-acquisition earnings of Pollux through 1996. During 1995, the Company
issued 4,910 shares based upon 1994 post-acquisition earnings. The value, as
defined in the purchase agreement, of any contingent common shares issued will
be recorded as an addition to intangible assets at the end of the fiscal year
in which they are earned.

During 1995, the Company revised its initial estimate of goodwill by reducing
the purchase price allocated to inventory, additional acquisition costs and the
issuance of additional shares due to the contingent purchase price described
above.

NOTE 3. INVENTORIES

Inventories are stated at the lower of cost (first-in, first-out method) or
market. Inventoried costs relating to long-term contracts are stated at actual
production cost.

Inventories consists of:
<TABLE>
<CAPTION>
DECEMBER 31
--------------------------
1995 1994
--------------------------
<S> <C> <C>
Finished goods $ 460,501 $ 441,957
Work-in-progress 4,715,819 6,211,428
Raw materials and supplies 2,741,815 2,667,904
---------- ----------
$7,918,135 $9,321,289
========== ==========
</TABLE>
1995 CADE Annual Report
- --------------------------------------------------------------------------------
12
<PAGE> 14
'NOTE 4. PROPERTY, PLANT, AND EQUIPMENT

Property, plant and equipment are stated at cost and consists of:
<TABLE>
<CAPTION>
DECEMBER 31
------------------------- ESTIMATED
1995 1994 USEFUL LIFE
---------------------------------------
<S> <C> <C> <C>
Land and improvements $ 500,864 $ 500,864
Buildings 4,330,657 4,290,599 25-30 years
Machinery and equipment 9,116,644 8,128,368 3-12 years
Tooling 10,512,553 9,256,142 See below
----------- -----------
24,460,718 22,175,973
Accumulated depreciation and
amortization 8,701,719 6,624,101
----------- -----------
$15,758,999 $15,551,872
=========== ===========
</TABLE>
Tooling primarily represents production and engineering costs incurred in the
manufacture of tooling for use in new component part and test cell equipment
production as well as repair and overhaul efforts. These costs are amortized
over projected delivery schedules (new component part and test cell equipment)
or estimated time periods (repair and overhaul).

NOTE 5. NOTE PAYABLE AND LONG-TERM DEBT

Note payable to bank of $1,300,000 at December 31, 1995 represents borrowing
under the Company's $4,000,000 unsecured line of credit, which bears interest
at the bank's announced prime interest rate less .50% (8.0% at December 31,
1995) and is subject to annual renewal each year in April. Also, at the
Company's option, certain increments of the outstanding line of credit may be
placed at a Eurodollar-based rate plus 2.1% (weighted-average of 8.0% at
December 31, 1995) for fixed periods not to exceed 90 days. This agreement
amended the Company's previous $5,000,000 line of credit facility. The line of
credit will become secured by substantially all of the Company's and
subsidiaries' tangible assets in the event the ratio of debt to tangible net
worth equals or exceeds one-to-one.

The weighted-average interest rate on short-term borrowings for the years ended
December 31, 1995, 1994, and 1993 was 8.7%, 8.5%, and 6.0% respectively.

Long-term debt consists of:
<TABLE>
<CAPTION>
DECEMBER 31
-----------------------
1995 1994
-----------------------
<S> <C> <C>
Term note (A) payable to bank in quarterly
installments of $128,571 beginning January 1996 $3,600,000
Term note (B) payable to bank in quarterly installments
of $71,429 with a final installment of $642,857
paid in September 1995 $ 785,714
Limited obligation revenue bonds, interest ranging
from 7.00% to 7.10%, due 1996-1997 652,500 1,262,500
Note payable to bank in monthly installments to
July 2005 591,025 609,759
Subordinated notes payable in four equal annual
payments beginning November 1996, interest
at 6.0% payable semi-annually 2,861,040 2,861,040
Capital lease obligations 16,541 35,626
---------- ----------
7,721,106 5,554,639
Current maturities 1,765,171 937,648
---------- ----------
$5,955,935 $4,616,991
========== ==========
</TABLE>
* The term note (A) is secured by substantially all of the Company's and
subsidiaries' tangible assets and bears interest at the bank's
announced prime interest rate less .25% (8.25% at December 31, 1995).
This term debt is guaranteed by each subsidiary. Under this agreement,
which covers both the term loan and the line of credit, the Company is
subject to restrictions relating to maintenance of net worth, working
capital, debt levels, disposition of its assets, future acquisitions,
incurrence of additional indebtedness, and changes in its capital
structure.
* In September 1995, the Company refinanced the term note (B) from the
proceeds of term note (A).
* The limited obligation revenue bonds were issued by a municipal
economic development corporation under an agreement with the Company's
Auto-Air subsidiary. Annual principal and semi-annual interest
payments to bondholders will be drawn by the appointed trustee from an
irrevocable direct pay letter of credit issued by a bank. The letter
of credit agreement between Auto-Air and the bank is guaranteed by the
Company and is
1995 CADE Annual Report
- --------------------------------------------------------------------------------
13
<PAGE> 15
secured by substantially all of the tangible assets of Auto-Air and the
Company. Auto-Air paid a one time commitment fee of .75% of the original
letter of credit amount and is required to pay an annual fee of .75% of
the outstanding balance of the letter of credit. The bonds mature from
one to two years and are fixed rate issues with a weighted average
interest rate of 7.1%. Use of the bond proceeds was restricted to
qualified capital expenditures as defined in the agreement.
Approximately $1,701,000 of bond proceeds were used to retire
pre-existing debt related to previous qualified capital expenditures.

* The note payable to bank is secured by certain Pollux real estate and
equipment items, bearing interest at 2.75% plus the prime lending rate,
as defined (8.5% at December 31, 1995).

* As part of the acquisition of Pollux, the Company issued $2,861,040 of
6% subordinated notes in exchange for a like amount of Pollux 8%
convertible subordinated debentures. Such notes are subordinated to
all indebtedness for borrowed money and property and equipment
purchases including capital leases.

Aggregate annual maturities of long-term debt, including capital leases, for
periods subsequent to December 31, 1995 are as follows: 1996--$1,765,171;
1997--$1,409,424; 1998--$1,260,246; 1999--$1,261,513; 2000--$549,879; and
thereafter--$1,474,873.

NOTE 6. LEASES

Future minimum lease payments, by year and in the aggregate for noncancellable
operating leases with initial or remaining terms of one year or more consisted
of the following at December 31, 1995:
<TABLE>
<S> <C>
1996 $ 392,000
1997 408,000
1998 426,000
1999 56,000
----------
Total minimum lease payments $1,282,000
==========
</TABLE>
Rent expense for 1995, 1994, and 1993 totaled $487,000, $378,000, and $372,000,
respectively.

NOTE 7. STOCK OPTIONS

Options activity during the years ended December 31, 1995, 1994, and 1993 is as
follows:
<TABLE>
<CAPTION>
1995 1994 1993
---------------------------------
<S> <C> <C> <C>
Options outstanding at beginning of year 749,000 579,000 626,000
Options granted during year:
Under 1990 Plan 96,450 145,000
Directors 100,000 350,000
Options exercised during year (75,000)
Options canceled during year (75,000) (250,000) (47,000)
-------- -------- --------

Options outstanding at end of year 870,450 749,000 579,000
======== ======== ========

Price $.66-$2.19 $.67-$2.19 $.67-$2.19

Options exercisable at end of year:
Number 683,050 530,400 469,600
Price $.66-$2.19 $.67-$2.19 $.67-$2.19

Price of options exercised during the year $.69-$.72
</TABLE>
The 1990 Nonqualified Stock Option Plan provides for the granting of up to
845,000 options for shares of the Company's Common Stock. The option price is
the fair market value of the share on the date of the grant. Options expire
ten years from date of grant. At six months from grant date, 20% of options
may be exercised, and at one year from grant date and for each of the next
three years thereafter, an additional 20% may be exercised. Options may be
granted under the 1990 Plan through December 31, 2000.

Members of the Board of Directors hold options to purchase 560,000 shares of
the Company's Common Stock. The options were granted at fair market value on
the date of grant and are exercisable at various dates through May 2004.

1995 CADE Annual Report
- --------------------------------------------------------------------------------
14
<PAGE> 16
NOTE 8. INCOME TAXES

Significant components of the Company's deferred tax
assets (liabilities) as of December 31, 1995 and 1994
are as follows:
<TABLE>
<CAPTION>
1995 1994
--------------------------
<S> <C> <C>
Current
Uniform inventory capitalization $ 77,000 $ 79,000
Uniform tooling capitalization 53,000 37,000
Expense and loss accruals 249,000 37,000
----------- -----------
Total current deferred tax assets $ 379,000 $ 153,000
=========== ===========
Long-term
Net operating carryforwards $ 1,239,000 $ 1,133,000
Tax credit carryforwards 101,000 101,000
Expense and loss accruals 220,000
----------- -----------
Total long-term deferred tax assets 1,340,000 1,454,000
Valuation allowance (640,000) (536,000)
----------- -----------
Net long-term deferred tax assets 700,000 918,000
Tax over book depreciation (1,177,000) (1,231,000)
----------- -----------
Total long-term deferred tax liabilities $ (477,000) $ (313,000)
=========== ===========
</TABLE>
With the acquisition of Pollux, the Company received deferred tax benefits as
of the date of acquisition of $750,000 including the tax impact of net
operating loss and other tax credit carryforwards with expiration dates from
2001 to 2008. Realization of these assets is contingent on future taxable
earnings of Pollux. In accordance with the provisions of Statement 109,
valuation allowances of $640,000 and $536,000 at December 31, 1995 and 1994
were recorded to reserve for these and other items which may not be realized.

The provision (credit) for income taxes consisted of the following:
<TABLE>
<CAPTION>
1995 1994 1993
--------------------------------------
<S> <C> <C> <C>
Current (credit):
Federal $(343,000) $ 11,000 $(407,000)
State and local 8,000 3,000 (5,000)
--------- --------- ---------
Total current (credit) (335,000) 14,000 (412,000)

Deferred (credit):
Federal (62,000) 16,000 (73,000)
--------- --------- ---------
$(397,000) $ 30,000 $(485,000)
========= ========= =========
The reconciliation of income tax computed at the U.S. federal statutory tax
rate to income tax expense (credit) is:

Tax at U.S. statutory rate $(264,900) $ 64,200 $(460,400)
State and local income taxes
(net of federal tax benefit) 5,300 2,000 (3,300)
Non-deductible amortization 31,500 14,200 14,200
Lower effective income tax of
foreign sales corporation (87,600) (42,100) (34,500)
Adjustment of estimated liabilities (94,800)
Exercise of non-qualified stock
options (2,900)
Other 13,500 (5,400) (1,000)
--------- --------- ---------
$(397,000) $ 30,000 $(485,000)
========= ========= =========
</TABLE>
NOTE 9. PENSION PLAN

Retirement benefits are provided by the Company to most salaried and
non-bargaining unit, hourly employees under contributory defined contribution
plans which provide for discretionary contributions. Expense related to these
plans was $151,000 in 1995, $115,000 in 1994, and $123,000 in 1993.

Bargaining unit employees of one subsidiary participate in a union sponsored
multi-employer defined benefit plan. Company cost and contributions were
$139,000 in 1995 and 1994, and $144,000 in 1993. The Company's proportional
share of the net assets, accumulated benefits and unfunded vested benefits of
this plan is not available. In addition, the Company offers bargaining unit
employees electing early retirement continued health benefits for a limited
period not to exceed three years with such benefits capped at current rates.
Management has determined that the financial impact of this benefit on the
Company as determined under Financial Accounting Standards Board Statement No.
106, "Employers' Accounting for Postretirement Benefits Other Than Pensions",
is not material.

1995 CADE Annual Report
- --------------------------------------------------------------------------------
15
<PAGE> 17
NOTE 10. NEW ACCOUNTING STANDARDS

In March 1995, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,"
effective for fiscal years beginning after December 15, 1995. This statement
established accounting standards for the impairment of long-lived assets,
certain identifiable intangibles, and goodwill related to those assets to be
held and used and long-lived assets and certain identifiable intangibles to be
disposed of. Management believes that the implementation of this new
accounting standard will not have a material impact on the Company's
consolidated operating results or financial position.

In October 1995, the FASB issued SFAS No. 123, "Accounting for Stock-Based
Compensation," effective for fiscal years beginning after December 15, 1995.
This statement requires entities to use a fair value based method of accounting
for stock-based compensation plans for determining compensation expense or to
include this information for disclosure purposes only. Companies may choose
between either of the two alternatives. Management intends to adopt this
statement on a disclosure only basis and, therefore, does not expect the impact
on the Company's consolidated operating results or financial position to be
material.

NOTE 11. QUARTERLY RESULTS (UNAUDITED)
<TABLE>
<CAPTION>
1995***
THREE MONTHS ENDED
-------------------------------------------------------
MARCH 31 JUNE 30** SEPTEMBER 30 DECEMBER 31 TOTAL
-------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Sales $ 7,349,861 $ 8,638,869 $ 6,955,259 $ 7,501,017 $ 30,445,006
Cost of sales 5,775,640 7,888,244 5,453,939 5,958,173 25,075,996
Net income (loss) 125,246 (541,201) 25,064 8,848 (382,043)
Net income (loss)
per common share* 0.01 (0.02) (0.00) (0.00) (0.02)
Weighted average
common shares
outstanding 21,681,431 21,681,593 21,686,341 21,686,341 21,683,947
</TABLE>
* The sum of the quarterly net income (loss) per share amounts does not
equal the annual amount reported. Net income (loss) per share is
computed independently for each quarter, the full year and is based on
respective weighted average common shares outstanding.

** Second quarter operations includes a charge of $1,130,000 to write-off
certain costs at the Company's Cade Composites, Inc. subsidiary
associated with work-in-process, non-recurring engineering charges,
contract termination costs, tooling investments, prototype development
costs and accounts receivable charges. The provision was based on the
Company's review of development costs and related project investments
and its best estimate of matching such costs against future revenue.

*** The quarterly results reflect the results of operations of Pollux which
was acquired in December 1994.
<TABLE>
<CAPTION>
1994
THREE MONTHS ENDED
--------------------------------------------------------
MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31*** TOTAL
--------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Sales $ 5,203,256 $ 4,448,324 $ 5,025,159 $ 5,783,941 $20,460,680
Cost of sales 4,012,412 3,497,331 3,926,558 4,544,715 15,981,016
Net income 1,159 7,359 17,735 132,508 158,761
Net income per
common share 0.00 0.00 0.00 0.01 0.01
Weighted average
common shares
outstanding 16,907,238 16,947,512 16,962,238 18,552,401 17,345,814
</TABLE>
*** See above.

1995 CADE Annual Report
- --------------------------------------------------------------------------------
16
<PAGE> 18
INDEPENDENT AUDITORS' REPORT

Shareholders and Board of Directors
Cade Industries, Inc. and Subsidiaries
Lansing, Michigan

We have audited the accompanying consolidated balance sheet of Cade Industries,
Inc. and Subsidiaries as of December 31, 1995, and the related consolidated
statements of operations, changes in shareholders' equity, and cash flows for
the year then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit. The consolidated financial statements
of the Company for the years ended December 31, 1994 and 1993 were audited by
other auditors whose report, dated February 13, 1995 included an explanatory
paragraph concerning a change in accounting for income taxes discussed in Note
1 to the financial statements.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, such 1995 consolidated financial statements present fairly, in
all material respects, the consolidated financial position of the Company at
December 31, 1995, and the consolidated results of its operations and its cash
flows for the year then ended in conformity with generally accepted accounting
principles.

/s/ Deloitte & Touche LLP

Lansing, Michigan
February 9, 1996

1995 CADE Annual Report
- --------------------------------------------------------------------------------
17
<PAGE> 19
CORPORATE INFORMATION

CORPORATE HEADQUARTERS TRANSFER AGENT GENERAL COUNSEL
5640 Enterprise Drive Firstar Trust Company Quarles & Brady
Lansing, MI 48911 615 E. Michigan Street 411 East Wisconsin Avenue
Phone: 517-394-1333 Milwaukee, WI 53202 Milwaukee, WI 53202-4497
Fax: 517-394-1404

CORPORATE AUDITORS
Deloitte & Touche, LLP
Suite 800
120 N. Washington Square
Lansing, MI 48933-1681
- --------------------------------------------------------------------------------
BOARD OF DIRECTORS

Molly F. Cade Terrell L. Ruhlman
Educator Chairman of the Board
Chief Executive Officer

Conrad G. Goodkind John W. Sandford
Partner President
Quarles & Brady Chief Executive Officer
Rolls-Royce North America

William T. Gross Steven M. Tadler
Consultant Senior Vice President
Advent International Corporation
Richard A. Lund
President
Chief Operating Officer
- --------------------------------------------------------------------------------
CORPORATE OFFICERS

Terrell L. Ruhlman Richard J. Gribbins
Chairman of the Board Vice President
Chief Executive Officer
Conrad G. Goodkind
Richard A. Lund Secretary
President
Chief Operating Officer James E. Nault
Assistant Treasurer
Edward B. Stephens
Vice President, Chief Financial Officer,
Treasurer and Assistant Secretary
- --------------------------------------------------------------------------------
SUBSIDIARIES

AUTO-AIR COMPOSITES, INC. POLLUX ACQUISITION CORPORATION
5640 Enterprise Drive 5640 Enterprise Drive
Lansing, MI 48911 Lansing, MI 48911
Phone: 517-393-4040 Phone: 517-394-1333
John F. Scanlon, President Richard A. Lund, President

CADE COMPOSITES, INC. H.A.C. CORPORATION
4075 Ruffin Road 537 Camden Drive
San Diego, CA 92123 Grand Prairie, TX 75051
Phone: 619-571-5220 Phone: 214-263-4387
Robert C. Spring, President John E. Haran, President

CADE INTERNATIONAL, INC. CADE COMMERCIAL COMPOSITES, INC.
5640 Enterprise Drive 5640 Enterprise Drive
Lansing, MI 48911 Lansing, MI 48911
Phone: 517-394-1333 Phone: 517-394-1333
Richard A. Lund, President Richard A. Lund, President

FORM 10-K INFORMATION - A COPY OF FORM 10-K AS FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION, INCLUDING FINANCIAL STATEMENTS AND SCHEDULES THERETO, WILL
BE PROVIDED TO SHAREHOLDERS WITHOUT CHARGE UPON WRITTEN REQUEST. REQUESTS MAY
BE DIRECTED TO SHERYL A. MULL, SHAREHOLDER RELATIONS, CADE INDUSTRIES, INC.;
P.O. BOX 23094; LANSING, MI 48909.

1995 CADE Annual Report
- --------------------------------------------------------------------------------
18

<PAGE> 1
Exhibit 21.1
Cade 1995 10-K
<PAGE> 2
SUBSIDIARIES OF
CADE INDUSTRIES, INC.

<TABLE>
<CAPTION>
Name of Subsidiary Jurisdiction of Incorporation
- ------------------ -----------------------------
<S> <C>
Auto-Air Composites, Inc. Michigan
Cade Composites, Inc. California
Cade International, Inc. Barbados
Cade Commercial Composites, Inc. Wisconsin
H.A.C. Corporation Delaware
Pollux Acquisition Corporation Wisconsin
</TABLE>

<PAGE> 1
Exhibit 23.1
1995 Cade 10-K
<PAGE> 2
ERNST & YOUNG LLP - Suite 1700 - Phone: 313 596 7100
500 Woodward Avenue
Detroit, Michigan 48226-3426

CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in the Registration Statement Form
S-8 No. 33-37911 pertaining to the Cade Industries, Inc. 1987 Stock Option
Plan, the Cade Industries, Inc. 1990 Nonqualified Stock Option Plan, the Cade
Industries, Inc. Nonstatutory Stock Option Agreement for the Benefit of Terrell
L. Ruhlman, the Cade Industries, Inc. Nonstatutory Stock Option Agreement for
the Benefit of Richard A. Lund and the Cade Industries, Inc. Nonstatutory Stock
Option Agreement for the Benefit of Robert P. Luzzi and in each related
Prospectus, of our report dated February 13, 1995 with respect to the
consolidated financial statements and the financial statement schedule listed
in the Index at Item 14(a) included in this Annual Report on Form 10-K of Cade
Industries, Inc. for the year ended December 31, 1995.

/s/ Ernst & Young LLP

ERNST & YOUNG, LLP

Detroit, Michigan
March 5, 1996

Exhibit 23.1
Cade Industries, Inc.
1995 10-K

Ernst & Young LLP is a member of Ernst & Young International, Ltd.

<PAGE> 1
Exhibit 23.2
Cade 1995 10-K
<PAGE> 2
Deloitte &
Touche LLP
-------------------------------------------------------------
Suite 800 Telephone: (517) 487-2251
One Michigan Avenue Facsimile: (517) 487-0404
120 North Washington Square
Lansing, Michigan 48933-1681

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in Registration Statement No.
33-37911 of Cade Industries, Inc. on Form S-8 of our report dated February 9,
1996, appearing in the Annual Report to Shareholders and incorporated by
reference in the Form 10-K of Cade Industries, Inc. for the year ended December
31, 1995.

/s/ Deloitte & Touche LLP

March 20, 1996
Detroit, Michigan

- ---------------
Deloitte Touche
Tohmatsu
International
- ---------------
<PAGE> 3
Exhibit 27
1995 Cade 10-K

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CADE
INDUSTRIES, INC. REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1995 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-K.
</LEGEND>

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 187,485
<SECURITIES> 0
<RECEIVABLES> 4,670,698
<ALLOWANCES> 0
<INVENTORY> 7,918,135
<CURRENT-ASSETS> 13,653,423
<PP&E> 24,460,718
<DEPRECIATION> 8,701,719
<TOTAL-ASSETS> 32,684,505
<CURRENT-LIABILITIES> 6,591,770
<BONDS> 5,955,935
0
0
<COMMON> 21,886
<OTHER-SE> 19,892,356
<TOTAL-LIABILITY-AND-EQUITY> 32,684,505
<SALES> 30,455,006
<TOTAL-REVENUES> 30,455,006
<CGS> 25,075,996
<TOTAL-COSTS> 25,075,996
<OTHER-EXPENSES> 5,429,585
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 718,468
<INCOME-PRETAX> (779,043)
<INCOME-TAX> (397,000)
<INCOME-CONTINUING> (382,043)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (382,043)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)

</TABLE>