SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15
(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period ___ to ___.
Commission File Number 1-9843
MORGAN PRODUCTS LTD.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
06-1095650
(I.R.S. Employer Identification No.)
469 McLaws Circle, Williamsburg, Virginia 23185
(Address of principal executive offices) (Zip Code)
(804) 564-1700
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registeredCommon Stock,
$.10 par value New York Stock Exchange Share Purchase Rights
Securities registered pursuant to Section 12(g) of the Act: None
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. __
Aggregate market value of voting stock of the Registrant held by
non-affiliates as of February 1, 1996: $35,930,989.
Number of shares of Common Stock outstanding as of February 1, 1996:
8,647,922 shares; 2,386 shares are held in treasury.
Documents incorporated by reference Part
Annual Report to Stockholders for the Year ended
December 31, 1995 I, II, IV
Proxy Statement for the Annual Meeting of Stockholders
to be held on May 15, 1996 III
PART I
ITEM 1. Business The Company
Morgan Products Ltd. ("Morgan" or the "Company") is a leading marketer,
manufacturer and distributor of premium wood door systems and other specialty
building products under the brand names "Morgan" and "Nicolai." The Company
also distributes premium window systems manufactured by Andersen Corporation
("Andersen"). The Company's manufactured products, Andersen window systems and
products manufactured by others are sold through 11 Company-operated
distribution centers. The Company's manufactured products also are sold
throughout most of the United States through independent distributors, home
improvement center chains and other retail stores. The Company believes that
approximately half of its sales are to the residential and light commercial
improvement, maintenance and repair markets, and the balance are to the
residential and light commercial new construction markets.
The Company is organized into three primary operating business units: Morgan
Manufacturing, which is headquartered in Oshkosh, Wisconsin, and directs the
Company's manufacturing facilities; Morgan Distribution, which is headquartered
in Mechanicsburg, Pennsylvania, and directs the Company-operated distribution
centers; and Morgan National Accounts, which serves large home center chains,
marketing and merchandising millwork and specialty building products for Morgan
Manufacturing and Morgan Distribution. The Company's manufactured and purchased
products are virtually all considered to be "millwork." In view of the nature
of its products and the method of distribution, management believes that the
Company's business constitutes a single industry segment.
Products
Products manufactured by the Company and sold under the "Morgan" and "Nicolai"
trade names constituted approximately 30% of 1995 sales. The Company is a
leader in the design and manufacture of premium wood interior and exterior doors
and entrance systems, and other specialty millwork such as fireplace mantels.
The Company offers a broad product line, and many doors are available with
special features such as energy-efficient glass, carved panels, leaded glass and
other options. Various woods, including pine, fir and oak, are used to meet
consumer preferences.
Substantially all of the Company's manufactured products are produced at the
Company's facilities in Oshkosh, Wisconsin; Lexington, North Carolina; and Weed,
California.
The Company distributes products it manufactures and specialty building
products of other manufacturers through its 11 Company-operated distribution
centers. The major products distributed by the Company are Morgan doors,
mantels and stairway systems; Andersen premium window systems; Therma-Tru steel
and composite doors; flush doors; molded doors; wood bi-fold and louvered doors;
and moldings.
Andersen products, which are sold under the "Andersen" trademark, accounted
for approximately 40% of the Company's sales in 1995 as compared to 39% in 1994.
Andersen produces high-quality, premium-priced windows, and has been a
technological leader in developing energy-efficient window systems. Andersen
has informed the Company that it sells exclusively through distributors such as
the Company. The Company's agreement with Andersen provides that Andersen can
terminate any of the Company's distributorships at any time upon 60 days notice.
The Company believes that such a termination provision is Andersen's standard
arrangement with its distributors. In the first quarter of 1994, Andersen
Corporation announced its intent to realign its distribution territories. This
was substantially completed in 1994. There has been a reduction in sales due to
this realignment.
An important part of the Company's distribution process is the assembly and
alteration work that is done at the distribution centers to prepare distributed
products for delivery to the customer and for efficient installation at the
building site. At these centers, window and door systems are assembled and
modified according to customer specifications.Markets
Virtually all of the products manufactured and distributed by the Company are
part of the millwork (fabricated wood products) industry, which includes wood
(including vinyl-clad wood) windows, wood doors, moldings, stairways and
mantels. In 1994, based on information published by the United States
Department of Commerce, the estimated manufacturers' sales volume of wood
windows totaled $2.6 billion, estimated sales volume of wood doors totaled $3.2
billion and other millwork (including moldings, stairways and mantels) totaled
$4.3 billion (to date, 1995 data is unavailable). These products are sold into
the improvement, maintenance and repair markets and the new construction
markets.
According to Department of Commerce data, overall sales in the residential
improvement, maintenance and repair markets grew from $46 billion in 1980 to
$115.3 billion in 1995, representing an increase of 151%. New construction
housing starts were cyclical over the same period, with a high of approximately
1.8 million units in 1986 and a low of slightly over 1.0 million units in 1991.
The 1991 level is the lowest level of starts since 1945. The following table,
using an index with 1984 as the base year (equal to 100%), compares the level of
housing starts and the Company's unit sales of Morgan doors (including the
Nicolai brand in all years and the Shasta brand from the date of purchase of
Shasta in March 1986) and Andersen windows during the period 1984 through 1995:
Housing Morgan Andersen
Starts Doors Windows
1984 . . . . . . . . . . . 100.0% 100.0% 100.0%
1985 . . . . . . . . . . . 99.5 104.4 118.0
1986 . . . . . . . . . . . 103.1 124.1 149.9
1987 . . . . . . . . . . . 92.6 130.9 156.8
1988 . . . . . . . . . . . 85.0 114.4(1) 175.1
1989 . . . . . . . . . . . 78.6 115.4 158.4
1990 . . . . . . . . . . . 68.2 124.4 120.1
1991 . . . . . . . . . . . 58.0 95.7 118.4
1992 . . . . . . . . . . . 68.7 99.0 125.4
1993 . . . . . . . . . . . 73.4 91.5 122.1
1994 . . . . . . . . . . . 81.4 79.9(2) 96.8(3)
1995 . . . . . . . . . . . 77.0 71.6 89.8
___________________
(1) Employees at the Company's Springfield, Oregon facility engaged in a
work stoppage beginning in July 1988. Production at this facility was
resumed near the end of 1988 at reduced levels.
(2) Reflects closing of the Company's Springfield, Oregon facility in May
1994. Production of some of this volume was transferred to the
Company's Lexington, North Carolina facility.
(3) Reflects Andersen realignment of sales territories that occurred in
1994.
The Company believes that its principal opportunities for growth are in the
further penetration of its existing markets, the internal development of new
products, the establishment of new Company-operated distributorships, the
addition of new product lines for distribution through the Company-operated
distribution centers and the addition of independent distributor outlets.
Distribution
The Company's manufactured products, Andersen window systems and products
manufactured by others are sold through 11 Company-operated distribution
centers. The Company's manufactured products also are sold in most of the
United States through independent distributors, home improvement center chains
and other retail stores. Approximately 78% of the Company's total sales are
generated by its Company-operated distribution centers, which includes certain
sales of products produced by the Company's manufacturing business unit.
The following is a list of Company-operated distribution centers as of
February 1, 1996:
Birch Run, Michigan
Chesapeake, Virginia
West Columbia (Cayce), South Carolina
Decatur, Illinois
Denver, Colorado
Gainesville, Virginia
Harrisburg (Mechanicsburg), Pennsylvania
Kansas City (Shawnee), Kansas
Scranton (Dunmore), Pennsylvania
West Chicago, Illinois
Wilmington (Newark), Delaware.
The Company's distribution centers warehouse, assemble, and ship products to
customers, provide sales, service and marketing functions and maintain vehicles
to deliver products to customers, who are generally within a 150-mile radius of
each center. The distribution centers are operated as stand-alone profit
centers. Major supplier purchasing negotiations are controlled centrally in
order to obtain the best prices for total volume purchased and to minimize
inventory levels.
Additionally, the Company has relationships with approximately 200 independent
distributors and home improvement center chains, which, in 1995, purchased
approximately 80% of the products manufactured by the Company's manufacturing
unit. The Company does not have formal distribution agreements with any of its
independent distributors or home improvement center chains. Such distribution
relationships may generally be terminated by either party at any time. The
Company's largest independent distributor purchased approximately 11% of the
products manufactured by the Company, accounting for approximately 3% of total
Company sales. The Company's largest home improvement center chain customer
purchased approximately 23% of the products manufactured by the Company,
accounting for slightly less than 10% of total Company sales. The Company is
unable to predict whether the loss of one or more independent distributors or
home improvement center chains would have a material adverse effect on the
Company.
Many of the products distributed by the Company, including Andersen products,
are modified and assembled at the Company's distribution centers before
shipping. Such products include pre-hung doors purchased from the Company and
other suppliers; bay and bow window systems; and half-round, octagon, and
specialty-shaped windows. The Company's assembly operations allow the builder,
contractor or consumer to install pre-assembled units at a lower cost than
modifying and assembling component parts at the job site. The Company has also
developed the capability to provide complete job site installation for repair
and remodeling projects.
Sales and Marketing
Most of the Company's advertising and promotion for its manufactured products
is directed to the wholesale and retail trade through catalogs, brochures,
retail product displays, newspapers, trade magazines and trade shows. In
addition, the Company engages in a cooperative advertising program with its
distributors and dealers through brochures, product displays, radio and
television. Through its advertising program, the Company emphasizes the
residential improvement, maintenance and repair markets and promotes the Morgan
Doorman, the Morgan name and logo, and the Nicolai name and logo. Certain of
the Company's suppliers, especially Andersen, advertise both to the trade and
directly to the consumer through nationwide print and television advertising.
In 1995, the Company added Morgan National Accounts, which serves large home
center chains, marketing and merchandising millwork and specialty building
products for Morgan Manufacturing and Morgan Distribution. As of December 31,
1995, the Company employed approximately 95 salespersons,
who sell directly to independent distributors, building supply dealers, builders
and remodelers, home improvement centers and factory home manufacturers. The
Company trains independent distributors and building supply dealers through
seminars held at its Oshkosh, Wisconsin marketing and training facility.
Raw Materials
The Company's primary raw material is wood. The Company purchases softwoods
from a variety of suppliers located in Idaho, Washington, Oregon and California
and hardwoods from various suppliers in Tennessee and in the Great Lakes region.
During 1992 and 1993, the cost of solid, long clear lengths of the Company's
traditional softwoods and hardwoods increased dramatically. This increase in
cost has generally been the result of the cessation of logging on almost all
U.S. government owned land. As a result the Company continues to expand the
utilization, where appropriate, of veneered and laminated solid wood components
in the manufacture of its products. The prices of pine lumber declined 18.5% in
1995 from 1994 and oak prices dropped 12.8%, while fir prices were relatively
unchanged. In addition, the Company has developed foreign sources for some of
its raw material requirements. Glass, hardware and miscellaneous components are
purchased from suppliers located in proximity to the Company's manufacturing
facilities. The Company believes that it is not dependent upon any single
supplier for any of its raw material.
Backlog
The Company's backlogs of orders for manufactured products at December 31,
1995 and 1994 were approximately $6.5 million in 1995 and $7.3 million in 1994.
The Company anticipates that substantially all of the backlog orders in
existence on December 31, 1995 will be delivered by the end of the current
fiscal year. All of such current backlog orders are cancelable prior to
shipment from the factory. Backlog levels vary during the course of the year
because of the seasonality of the Company's business. Customer orders at the
Company-operated distribution centers are generally filled within one to five
days and, accordingly, there is no appreciable backlog level.
Seasonal Nature of Business
The building products industry is seasonal, particularly in the Northeast and
Midwest regions of the United States, where inclement weather during the winter
months usually reduces the level of building activity in the improvement,
maintenance and repair markets and in the new construction markets. The
Company's lowest sales traditionally occur during the first and fourth quarters.
Competition
Manufacturers of residential specialty millwork products in the United States
are a highly fragmented group and include approximately 2,000 companies with
annual revenues ranging from less than $1 million to several hundred million
dollars. Competition in the residential specialty building products market is
substantial. The Company's distribution centers compete principally with other
distributors of window systems, distributors of specialty building products
manufactured by companies other than the Company and manufacturers of specialty
building products which sell directly to the Company's target customers. The
Company believes that it competes primarily on the basis of the breadth of its
product lines, the quality and design of its products and the quality and speed
of its service. The Company's manufactured product lines are positioned
primarily at the premium end of their respective markets. The Company believes
that producers and distributors of lower priced or lower cost products may enjoy
a competitive advantage where price is the consumer's primary concern.
The Company has approximately 18 major competitors at the manufacturers' level
in the interior and exterior premium wood door market and believes that it has
the largest market share among such manufacturers of interior and exterior
premium wood panel doors. The Company further believes that Andersen has 5
principal competitors in the premium wood window markets in which it competes.
The Company also believes that it has a leading position in premium interior and
exterior doors and wood windows in the market areas surrounding most of its
distribution centers.
Trademarks and Name
The Company's name, the Morgan Doorman, "Marquis," "GlassWrap," "Compression
Glazed," "MOR-TRIM," and the Nicolai name and logo are registered trademarks.
The Company also uses its trademarks "Centry," "SwingSet," "Energy Guard,"
"Fire-Guard," "Sureguard," "Triomphe," "NORTHWOODS," and "WHERE QUALITY COMES
NATURALLY" in connection with the sale of Company manufactured products. The
Company considers its trademarks and logos to be valuable to the conduct of its
business. The Company also owns certain patents which it does not consider
material to the operation of its business.
Employees
As of December 31, 1995, the Company employed 1,329 persons, of whom 583 were
employed at the Company's manufacturing facilities, 736 were employed at the
Company's distribution centers, and 10 were employed at the corporate
headquarters. Approximately 500 employees are represented by labor unions.
During 1995, the Company negotiated labor agreements at Birch Run, Michigan;
Decatur, Illinois; Shawnee Kansas; Mechanicsburg, Pennsylvania; and Oshkosh,
Wisconsin. These agreements were negotiated without any work interruption.
ITEM 2. Properties
The Company owned the following manufacturing facilities as of February 1,
1996:
Approximate
Square Feet
Location Occupied
Oshkosh, Wisconsin (28 buildings; 27.6 acres) . . . . 512,000
Lexington, North Carolina (1 building; 20 acres) . . 216,000
The Oshkosh, Wisconsin facility is subject to a mortgage in connection with
certain industrial revenue bonds. See Note 5 of Notes to Consolidated Financial
Statements which appears on page 15 of the Company's 1995 Annual Report to
Stockholders and is incorporated by reference in this Form 10-K Annual Report.
The Company leased the following facilities as of February 1, 1996:
Approximate
Square FootLease
Location OccupiedExpiring
Birch Run, Michigan . . . . . . . . . . . . . . 113,022 2005
Chesapeake, Virginia . . . . . . . . . . . . . 30,000 1999(1)(5)
West Columbia (Cayce), South Carolina . . . . . 89,480 1996
Denver, Colorado . . . . . . . . . . . . . . . 39,970 1997
Decatur, Illinois . . . . . . . . . . . . . . . 93,000 2007(1)
Gainesville, Virginia . . . . . . . . . . . . . 79,500 2006(1)
Harrisburg (Mechanicsburg), Pennsylvania
(2 facilities):
Office . . . . . . . . . . . . . . . . . . . 15,569 1998(1)
Warehouse . . . . . . . . . . . . . . . . . 134,906 2002(1)
Kansas City (Shawnee), Kansas . . . . . . . . . 79,500 2000(1)
Williamsburg, Virginia: Corporate Headquarters 6,909 2002
Oshkosh, Wisconsin:
Manufacturing Division Office . . . . . . . 16,000 2000(2)
Scranton (Dunmore), Pennsylvania . . . . . . . 80,917 1998(4)
Weed, California . . . . . . . . . . . . . . . 417,604(3) 1999(2)
West Chicago, Illinois . . . . . . . . . . . . 86,172 1996(2)
Wilmington (Newark), Delaware . . . . . . . . . 97,421 2000(2)
____________________
(1) Optional renewal term in excess of five years.
(2) Optional renewal term of five years or less.
(3) In 1990, the Company ceased production of fir doors at this facility. In
May 1994, the Company ceased production of veneer at this location. The
Company continues to use approximately 50,000 square feet for patio door
assembly and warehousing. The Company sublet 50,000 square feet to Mt.
Shasta Veneer, Inc.
(4) In October 1994, the Company sublet 31,025 square feet to Hadden
Craftsman.
(5) The Company recently renewed the lease reducing the square footage from
94,500.
Distribution center leases generally provide for fixed monthly rental
payments, plus the payment, in most cases, of real estate taxes, utilities,
liability insurance and maintenance. In a few locations, the leases provide
escalation clauses requiring the payment of additional rent according to certain
indices or in specified amounts. The termination dates of these leases vary
widely. See Note 6 of Notes to Consolidated Financial Statements which appears
on page 16 of the Company's 1995 Annual Report to Stockholders and is
incorporated by reference in this Form 10-K Annual Report.
The Company believes that its distribution facilities and manufacturing
capacity are sufficient to serve its existing markets.
ITEM 3. Legal Proceedings
The Company is not involved in any material pending legal proceedings.
ITEM 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders since the last annual
meeting held May 17, 1995.
ITEM 4A. Executive Officers of the Registrant
In respect of information as to the Company's executive officers, see caption
"Executive Officers of the Company" in Part III, Item 10 of this Form 10-K
Annual Report.
PART II
ITEM 5. Market for the Company's Common Equity and Related Stockholder Matters
(a) The information set forth under "Common Stock Market Price Range and
Dividend Policy" which appears on page 18 of the Company's 1995 Annual Report to
Stockholders is incorporated by reference in this Form 10-K Annual Report.
(b) Note: The number of shares of the Company's Common Stock held by
non-affiliates shown on the cover of this Form 10-K Annual Report was calculated
on the assumption that there were no affiliates other than officers and
directors of the Company and Saugatuck (as defined below).
ITEM 6. Selected Financial Data
The selected financial data for the five years ended December 31, 1995 which
appears on page 1 of the Company's 1995 Annual Report to Stockholders is
incorporated by reference in this Form 10-K Annual Report.
ITEM 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The information set forth under "Management's Discussion and Analysis of
Financial Condition and Results of Operations" which appears on pages 6 through
9 of the Company's 1995 Annual Report to Stockholders, is incorporated by
reference in this Form 10-K Annual Report.
ITEM 8. Financial Statements and Supplementary Data
The financial statements, together with the report thereon of Price Waterhouse
LLP dated January 25, 1996, appearing on pages 10 through 19 of the Company's
1995 Annual Report to Stockholders, including Note 13 (page 18), which includes
unaudited quarterly financial data, are incorporated by reference in this Form
10-K Annual Report.
ITEM 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
PART III
ITEM 10. Directors and Executive Officers of the Company
The information in the Company's Proxy Statement for the Annual Meeting of
Stockholders to be held on May 15, 1996 under "Election of Directors" is
incorporated by reference in this Form 10-K Annual Report.
EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth the names and ages of the executive officers of
the Company as of December 31, 1995. Company officers are appointed by the
Board of Directors and such appointments are effective until resignation or
earlier removal by the Board of Directors.
NAME AGE POSITION
Frank J. Hawley, Jr . . . . . 68 Chairman of the Board
Larry R. Robinette . . . . . 52 President and Chief Executive Officer
Douglas H. MacMillan . . . . 49 Vice President, Chief Financial
Officer and Secretary
Dennis C. Hood . . . . . . . 58 Senior Vice President - Human
Resources and Administration
Peter Balint . . . . . . . . 46 Vice President; President - Morgan
Manufacturing
Dawn E. Neuman . . . . . . . 33 Treasurer and Assistant Secretary
Mr. Hawley has been Chairman of the Board of the Company since December 1983.
Since 1982, he has been a Managing Partner of Laurel Partners, the General
Partner of Saugatuck Capital Company Limited Partnership ("Saugatuck"), a
venture capital partnership and an affiliate of the Company. Since September
1986, he has been a Managing Partner of Bedford Partners, the General Partner of
Saugatuck Capital Company Limited Partnership II ("Saugatuck II"), a venture
capital partnership. Since October 1992, he has been a Managing Partner of
Greyrock Partners Limited Partnership, the General Partner of Saugatuck Capital
Company Limited Partnership III ("Saugatuck III"), a venture capital
partnership. Since September 1986, he has been President and principal
stockholder of Saugatuck Associates, Inc., a risk capital management firm which
provides investment advice and assistance to Saugatuck, Saugatuck II and
Saugatuck III.
Mr. Robinette was appointed President and Chief Executive Officer of Morgan
Products Ltd. on September 6, 1994. He is the former President and CEO of
Anchor Hocking Packaging of Cincinnati, Ohio, a subsidiary of CarnaudMetalbox.
Previous positions include a series of executive assignments at Newell Company,
and prior to that, he was employed at General Motors.
Mr. MacMillan joined the Company in August 1991 as Vice President, Chief
Financial Officer and Secretary of the Company. From 1987 to July 1991, he was
the Chief Financial Officer of Varlen Corporation, a diversified manufacturer
serving the scientific instrument, automotive, heavy truck and railroad markets.
From 1981 to 1987, he held various executive financial positions with Sealy
Incorporated.
Mr. Hood was appointed Senior Vice President Human Resources and
Administration in December 1994. Mr. Hood joined the Company as Vice
President Human Resources in June 1986. From January 1985 until he joined the
Company, Mr. Hood was Vice President Human Resources of the Air Systems Division
of the Trane Company, a subsidiary of American Standard, Inc., engaged in the
manufacture of commercial and residential heating and air conditioning
equipment. From March 1978 until January 1985, Mr. Hood was manager of
industrial relations, branch operations of the Trane Company.
Mr. Balint joined the Company in May 1995 as a Vice President of the Company
and President of the Company's Morgan Manufacturing unit. From 1992 to May
1995, he was Vice President of Sales and Marketing for the SNE Enterprises
Division of Plygem Industries. From 1983 to 1992, Mr. Balint held various
marketing and management positions with Sherwin-Williams Corporation.
Ms. Neuman was appointed Treasurer and Assistant Secretary in May 1995. From
May 1994 to May 1995, she was Assistant Treasurer and Assistant Secretary, from
July 1989 to May 1994 she was the Company's Tax Manager, and from May 1988 to
June 1989 she was the Senior Tax and Benefits Specialist. Prior to joining the
Company, she was a tax consultant with Price Waterhouse from August 1984 to May
1988.
Family Relationships
To the best of the Company's knowledge and belief, there is no family
relationship between any of the Company's directors, executive officers or
persons nominated or chosen by the Company to become a director or an executive
officer.
ITEM 11. Executive Compensation
The information in the Company's Proxy Statement for the Annual Meeting of
Stockholders to be held on May 15, 1996 under "Executive Compensation" is
incorporated by reference in this Form 10-K Annual Report.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management
The information in the Company's Proxy Statement for the Annual Meeting of
Stockholders to be held on May 15, 1996 under "Security Ownership of Certain
Beneficial Owners and Management" is incorporated by reference in this Form 10-K
Annual Report.
ITEM 13. Certain Relationships and Related Transactions
The information in the Company's Proxy Statement for the Annual Meeting of
Stockholders to be held on May 15, 1996 under "Certain Transactions" is
incorporated by reference in this Form 10-K Annual Report.
PART IV
ITEM 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) The following documents are filed as part of this report:
1. Financial Statements:
Page In
Annual Report*
Consolidated Income Statements for the
three years ended December 31, 1995 10
Consolidated Balance Sheets at December
31, 1995 and 1994 . . . . . . . . . 11
Consolidated Statements of Cash Flow for the
three years ended December 31, 1995 12
Consolidated Statements of Stockholders'
Equity for the three years ended
December 31, 1995 . . . . . . . . 13
Notes to Consolidated Financial
Statements . . . . . . . . . . . 14-18
Report of Management and
Report of Independent Accountants 19
2. Financial Statement Schedule: . . . Page
Schedule VIII - Valuation and
Qualifying Accounts. . . . . . . . . . 18
Report of Independent Accountants on Financial
Statement Schedule . . . . . . . . . . . 17
* Incorporated by reference from the indicated pages of the 1995 Annual Report
to Stockholders.
All other schedules are omitted because they are not applicable or the
required information is shown in the financial statements or notes thereto.
3. Exhibits (Filed herewith or incorporated by reference; see
index to exhibits). An "*" indicates a compensatory plan or
arrangement in accordance with Instruction (3) to item 14.
3.1 Restated Certificate of Incorporation, as amended (incorporated by
reference to Exhibit 3.1 to the Company's Form 10-K for the Fiscal
Year ended December 31, 1987 (Commission File No. 0-13911)).
3.2 By-laws of the Company, as amended (incorporated by reference to
Exhibit 3.2 to the Company's Form 10-K for the Fiscal Year ended
December 31, 1987 (Commission File No. 0-13911)).
4.1 Stockholders Agreements [Restated] among the Company, Saugatuck
Capital Company Limited Partnership, George T. Brophy and certain
other stockholders of the Company, dated as of January 13, 1984,
as amended (incorporated by reference to Exhibits 4.12 and 4.13 to
the Company's Registration Statement (Registration No. 33-00344),
Exhibit 4.16 to the Company's Quarterly Report for the Quarter
ended March 29, 1986 (Commission File No. 0-13911) and Exhibit 4.9
of the Company's Form 10-K for the Fiscal Year ended December
31, 1986 (Commission File No 0-13911)).
4.2 Rights Agreement, dated as of March 15, 1989, between the Company
and Manufacturers Hanover Trust Company, as Rights Agent
(incorporated by reference to Exhibit I-2 to the Company's Form
8-A Registration Statement on Form S-1 (Commission File No.
1-9843)).
10.1 Loan and Security Agreement among the Company, certain banks, and
Barclay's Business Credit, Inc. as agent, dated as of July 14,
1994 (incorporated by reference to Exhibit 10.1 to the Company's
Form 10-K for the Fiscal Year ended December 31, 1994 (Commission
File No. 1-9843)).
10.2 Trust Indenture, dated as of December 1, 1991, by and between the
City of Oshkosh, Wisconsin and Marine Bank of Springfield, as
Trustee (incorporated by reference to Exhibit 10.11 to the
Company's Form 10-K for the Fiscal Year ended December 31, 1991
(Commission File No. 1-9843)).
10.3 Loan Agreement, dated as of December 1, 1991, by and between the
City of Oshkosh, Wisconsin and the Company (incorporated by
reference to Exhibit 10.12 to the Company's Form 10-K for the
Fiscal Year ended December 31, 1991 (Commission File No. 1-9843)).
10.4 Mortgage and Security Agreement with Assignment of Rents, dated as
of December 1, 1991, from the Company to Harris Trust and Savings
Bank (incorporated by reference to Exhibit 10.18 to the Company's
Form 10-K for the Fiscal Year ended December 31, 1991 (Commission
File No. 1-9843)).
*10.5 Letter Agreement regarding termination of employment between the
Company and Arthur L. Knight, Jr. dated May 31, 1994 (incorporated
by reference to Exhibit 10.8 of the Company's Form 10-K for the
Fiscal Year ended December 31, 1994 (Commission File No. 1-9843)).
*10.6 Employment Agreement and Trust Under Employment Agreement between
the Company and Larry R. Robinette dated August 19, 1994
(incorporated by reference to Exhibit 10.9 of the Company's Form
10-K for the Fiscal Year ended December 31, 1994 (Commission File
No. 1-9843)).
*10.7 Severance policy for certain Covered Executives (incorporated by
reference to Exhibit 10.13 of the Company's Form 10-K for the
Fiscal Year ended December 31, 1992 (Commission File No. 1-9843)).
*10.8 Consulting and Management Assistance Agreement between the Company
and Hawley Management Company (now named Saugatuck Associates,
Inc.) dated as of January 13, 1984 (incorporated by reference to
Exhibit 10.14 to the Company's Registration Statement on Form S-1
(Registration No. 33-00344)).
*10.9 Amended 1994 Executive Performance Incentive Pln (incorporated by
reference to Exhibit 10.14 of the Company's Form 10-K for the
Fiscal Year ended December 31, 1994 (Commission File No. 1-9843)).
*10.10 Convertible Appreciation Rights Plan, dated June 1, 1992
(incorporated by reference to Exhibit 10.1 to the Company's
Quarterly Report for the Quarter ended July 4, 1992 (Commission
File No. 1-9843)).
*10.11 Morgan Products Ltd. 1992 Non-employee Director Stock Option
Plan (incorporated by reference to Exhibit 10.19 of the
Company's Form 10-K for the Fiscal Year ended December 31, 1992
(Commission File No. 1-9843)).
*10.12 The Company's Incentive Stock Option Plan (1995) (incorporated
by reference to Exhibit 10.19 of the Company's Form 10-K for
the Fiscal Year ended December 31, 1994 (Commission File No.
1-9843)).
10.13 The Company's 1988 Stock Purchase Plan (incorporated by
reference to the Appendix to the Prospectus contained in Post-
Effective Amendment No. 1 to the Company's Registration
Statement on Form S-8 (Registration No. 33-23882)).
10.14 Amendments and modifications to the Severance Agreements of
Messrs. LaCroix, Schlegel, MacMillan, and Hood.
10.15 Change in Control Severance Policy between the Company and
Larry R. Robinette dated September 13, 1995.
10.16 Updated and revised Special Severance/ Retention Plan for
Executive Officers.
10.17 Employment agreement between the Company and Peter Balint dated
May 1, 1995.
10.18 Amendments dated May 17, 1995 to the Company's 1995 Incentive
Stock Option Plan.
10.19 Amendments dated December 20, 1995 to the Morgan Products Ltd.
Deferred Compensation Plan.
10.20 Agreement between Morgan Distribution, Mechanicsburg,
Pennsylvania and the United Steelworkers of America, AFL-CIO-
CLC, Local 7415, dated February 18, 1995.
10.21 Agreement between Morgan Distribution, Shawnee, Kansas and the
International Brotherhood of Teamsters, Local 541, dated
April 1, 1995.
10.22 Agreement between Morgan Products Ltd., Oshkosh, Wisconsin and
the Midwestern Industrial Council and affiliated Local 1363 of
the United Brotherhood of Carpenters and Joiners of America,
dated May 7, 1995.
10.23 Agreement between Morgan Products Ltd., Oshkosh, Wisconsin and
the Teamsters "General", Local 200, dated May 21, 1995.
10.24 Agreement between Morgan Products Ltd., Decatur, Illinois and
the International Brotherhood of Teamsters, AFL-CIO, Local 279,
dated July 15, 1995.
10.25 Agreement between Morgan Distribution, Birch Run, Michigan and
the International Brotherhood of Teamsters, Local 486, dated
November 4, 1995.
10.26 Form of Indemnification Agreement, dated November 3, 1994
between the Company and each of William R. Holland; Alton F.
Doody, Jr.; Patrick J. McDonough, Jr.; Larry R. Robinette;
Byron H. Stebbins; Edward T. Tokar; Douglas H. MacMillan; and
Dawn E. Neuman; and dated October 30, 1995 between the Company
and Peter Balint.
10.27 Amendment #4, dated October 30, 1995, to the Loan and Security
Agreement among the Company, certain banks and Barclay's
Business Credit, Inc. (succeeded by Fleet Capital), dated July
14, 1994.
10.28 Lease for office space in Williamsburg, Virginia, between the
Company and Jim Griffith Builder, Inc. dated March 2, 1995 and
amended October 3, 1995.
10.29 Letter agreement exercising Morgan Products Ltd.'s option to
extend the current lease at the Morgan Manufacturing facility
in Weed, California.
10.30 Office lease for Morgan Manufacturing Division Office in
Oshkosh, Wisconsin, dated October 13, 1995.
10.31 Letter Agreements, dated December 1994, between each of the
Company's eleven distribution centers and Andersen Corporation.
13 Items incorporated by reference to the 1995 Annual Report to
Stockholders.
23 Consent of Price Waterhouse LLP.
27 Financial Data Schedule
(b) No reports on Form 8-K were filed with the Commission during the
last quarter of the Company's 1995 fiscal year
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Company has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
MORGAN PRODUCTS LTD.
By /s/ Douglas H. MacMillan
Vice President, Chief Financial
Officer and Secretary
March 27, 1996
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 Company
and in the capacities and on the dates indicated.
Signatures Title Date
Frank J. Hawley, Jr. Chairman of the Board March 27, 1996
and Director
Larry R. Robinette President, March 27, 1996
Chief Executive Officer
and Director
(Principal Executive
Officer)
Douglas H. MacMillan Vice President, Chief March 27, 1996
Financial Officer and
Secretary
(Principal Financial
Officer)
John S. Crowley Director March 27, 1996
Howard G. Haas Director March 27, 1996
William R. Holland Director March 27, 1996
Patrick J. McDonough, Jr. Director March 27, 1996
Alton F. Doody, Jr. Director March 27, 1996
Byron H. Tony Stebbins Director March 27, 1996
Edward T. Tokar Director March 27, 1996
REPORT OF INDEPENDENT ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULE
To the Board of Directors
of Morgan Products Ltd.
Our audits of the consolidated financial statements referred to in our report
dated January 25, 1996 appearing on page 19 of the 1995 Annual Report to
Stockholders of Morgan Products Ltd., (which report and consolidated financial
statements are incorporated by reference in this Annual Report on Form 10-K)
also included an audit of the Financial Statement Schedule listed in Item 14(a)
of this Form 10-K. In our opinion, this Financial Statement Schedule presents
fairly, in all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements.
PRICE WATERHOUSE LLP
Milwaukee, Wisconsin
January 25, 1996
MORGAN PRODUCTS LTD.
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
Accounts Receivable
Allowance for doubtful accounts consisted of the following
(in thousands of dollars):
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Balance at beginning of period $ 953 $1,448 $1,672
Provision charged to expense 214 (54) 697
Write-offs (468) (422) (759)
Recoveries/other 23 (19) (162)
Balance at end of period $ 722 $ 953 $1,448
</TABLE>
EXHIBIT INDEX
(including exhibits not incorporated by reference
see item 14 for incorporated exhibits)
Exhibit Page No.
10.14 Amendments and modifications to the Severance Agreements of Messrs.
LaCroix, Schlegel, MacMillan, and Hood.
10.15 Change in Control Severance Policy between the Company and Larry R.
Robinette dated September 13, 1995.
10.16 Updated and revised Special Severance/ Retention Plan for Executive
Officers.
10.17 Employment agreement between the Company and Peter Balint dated May 1,
1995.
10.18 Amendments dated May 17, 1995 to the Company's 1995 Incentive Stock
Option Plan.
10.19 Amendments dated December 20, 1995 to the Morgan Products Ltd. Deferred
Compensation Plan.
10.20 Agreement between Morgan Distribution, Mechanicsburg, Pennsylvania and
the United Steelworkers of America, AFL-CIO-CLC, Local 7415, dated
February 18, 1995.
10.21 Agreement between Morgan Distribution, Shawnee,
Kansas and the International Brotherhood of Teamsters, Local 541,
dated April 1, 1995.
10.22 Agreement between Morgan Products Ltd., Oshkosh, Wisconsin and the
Midwestern Industrial Council and affiliated Local 1363 of the United
Brotherhood of Carpenters and Joiners of America, dated May 7, 1995.
10.23 Agreement between Morgan Products Ltd., Oshkosh, Wisconsin and the
Teamsters "General", Local 200, dated May 21, 1995.
10.24 Agreement between Morgan Products Ltd., Decatur, Illinois and the
International Brotherhood of Teamsters, AFL-CIO, Local 279, dated July
15, 1995.
10.25 Agreement between Morgan Distribution, Birch Run, Michigan and the
International Brotherhood of Teamsters, Local 486, dated November 4,
1995.
10.26 Form of Indemnification Agreement, dated November 3, 1994 between the
Company and each of William R. Holland; Alton F. Doody, Jr.; Patrick J.
McDonough, Jr.; Larry R. Robinette; Byron H. Stebbins; Edward T. Tokar;
Douglas H. MacMillan; and Dawn E. Neuman; and dated October 30, 1995
between the Company and Peter Balint.
10.27 Amendment #4, dated October 30, 1995, to the Loan and Security Agreement
among the Company, certain banks and Barclay's Business Credit, Inc.
(succeeded by Fleet Capital), dated July 14, 1994.
10.28 Lease for office space in Williamsburg, Virginia between the Company and
Jim Griffith Builder, Inc. dated March 2, 1995 and amended October 3,
1995.
10.29 Letter agreement exercising Morgan Products Ltd.'s option to extend the
current lease at the Morgan Manufacturing facility in Weed, California.
10.30 Office lease for Morgan Manufacturing Division Office in Oshkosh,
Wisconsin, dated October 13, 1995.
10.31 Letter Agreements, dated December 1994, between each of the Company's
eleven distribution centers and Andersen Corporation.
13 Items incorporated by reference to the 1995 Annual Report to
Stockholders.
23 Consent of Price Waterhouse LLP.
27 Financial Data Schedule
Exhibit 10.14
[Letterhead & Logo
75 Tri-State International
Suite 222
Lincolnshire, Illinois 60069
708-317-2400
FAX: 708-317-1900]
Morgan Products Ltd.
March 14, 1995
(REVISED April 20, 1995)
(REVISED May 10, 1995)
Joseph G. LaCroix
1102 E. Powderhorn Drive
Mechanicsburg, PA 17055
Dear Joe:
This letter sets forth our discussions regarding your separation of employment
from Morgan Products Ltd. and its subsidiaries (collectively, the "Company") and
represents the entire agreement between you and the Company with respect to any
and all severance benefits to which you are entitled from the Company. This
Agreement incorporates the terms and provisions of the Special
Severance/Retention Plan for Executive Officers, dated March 30, 1994 (the
"Plan"), including the modifications/enhancements dated April 13, 1994, which
shall be incorporated herein by reference.
1. In consideration of the benefits set forth herein, you agree to forfeit
your right to any and all payments and benefits under the terms of the
Plan. Notwithstanding the preceding sentence, except as specifically
provided herein to the contrary, you shall be entitled to the benefits set
forth in Section 3.3 (including the modifications/enhancements to the Plan
dated April 13, 1994) and Article 5 of the Plan. In addition, the terms
and provisions of Articles 4, 6, 7, 8, and 9 (with the exception of
Sections 9.4 and 9.8) of the Plan shall apply for the purposes of this
Agreement.
2. Tuesday, March 14, 1995 shall serve as your date of notice under the Plan.
The effective date of your termination will be Friday, May 12, 1995.
3. Effective March 14, 1995 you are being placed on unrestricted paid leave at
your current bi-weekly rate of pay. During such leave, you will have no
authority or responsibility to act for or on behalf of the Company.
Outplacement services are being made available to you effective
immediately, and you are free to begin to seek new employment or to pursue
other self interests.
4. The Company will continue to pay you on a bi-weekly basis through May 12,
1995. You will receive your final regular paycheck on May 19, 1995. The
total balance of your Deferred Compensation Account will be paid to you on
June 2, 1995.
5. On May 12, 1995 you will become eligible for certain severance payouts
which shall be determined according to Section 3.3(a) of the Plan
(including the modification/ enhancement to the Plan dated April 13, 1994).
You have elected that such payment be made in a lump sum on June 30,
1995. The amount of that payment as determined in accordance with the plan
is $451,543.
6. Short-term and long-term disability coverage, participation in the
Company's 401(k) plan, CAR plan, and Deferred Compensation plan, will
terminate on Friday, May 12, 1995.
7. Any Company equipment you may have in your possession, such as, computers,
software, electronic and communications equipment, is to be returned to the
Company.
8. You agree to forfeit to the Company effective with the signing of this
agreement all outstanding options that have been granted to you as of March
15, 1995.
9. While you are not eligible for any payout or deferred bonus reimbursement
under the CAR Plan, the Company agrees to pay you those amounts of your
bonuses that were deferred to that plan for purchases of CARS. That
amount is $4,835.
10. The Company will also agree to provide you with an additional lump sum
payment of $30,000, which along with the amount in number 9 above, will be
added to your final payment on June 30, 1995.
11. In consideration of 3, 9 and 10 above you agree as follows:
(a) You will not, for two years after March 14, 1995 directly or
indirectly, engage or participate in or become employed by or render
advisory or other services to, or have any ownership in any firm,
person, corporations or business enterprise which is primarily engaged
in the distribution of millwork - wood windows, wood flush doors, wood
stile and rail doors, pre-hung door units, steel door units,
stairparts, and lineal molding - which significantly does or may
compete with or against any of Morgan Products Ltd. distribution
centers, or which is primarily engaged in the business of
manufacturing, importing, and selling residential woodstile and rail
doors that compete against Morgan Manufacturing.
(b) For two years after March 14, 1995, you will not engage in
solicitation of the Company's employees, and
(c) You will not directly or indirectly use, attempt to use, disclose, or
otherwise make known to any person or entity any knowledge or
information, including without limitation, lists of customers or
suppliers, trade secrets, know-how, inventions, discoveries, and
processes, as well as any data and records pertaining thereto,
which you may have acquired in the course of your employment; or any
knowledge or information of a confidential nature (including all
unpublished matters) relating to, without limitation, the business,
properties, accounting, books and records, trade secrets, or memoranda
of the company or its affiliates, unless the company agrees in
advance in writing to allow you to do so.
(d) You agree to fully cooperate and to assist Morgan Distribution and its
counsel in responding to the Justice Department's investigation of
Andersen Corporation and its distributors. That cooperation is to
include, but is not limited to: assisting in the production and
interpretation of documents, providing information about the
relationships between and among Andersen Corporation, Morgan
Distribution, and other Andersen corporation distributors and Morgan
Distribution customers as well as their respective employees, and
meeting and talking with Morgan Distribution's counsel when requested
to do so. Where appropriate you will be reimbursed for any out-of-
pocket expenses and/or lost wages associated with providing such
cooperation and assistance. Morgan Distribution agrees to
provide the same cooperation and assistance to you if the justice
department initiates any individual investigation or action against
you relative to Andersen Corporation and its distributors. To the
extent that liability is alleged or found against you in connection
with events that occurred prior to your termination for which there is
a potential for D & 0 coverage, the Company agrees to promptly submit
to the appropriate carrier a claim for coverage.
(e) With the exception of obligations set forth in this letter and the
fulfillment of same by the Company, you hereby waive and release the
Company, its successors and assigns, their Officers, Directors, and
employees from all liabilities, obligations, damages, claims, causes
of action and demands, whatsoever, and agree not to sue or file any
claim against the company or the Company's successors or assigns,
their Officers, Directors, and employees which you now have or
hereafter can, shall or may have, including but not limited to any
claims or rights under federal, state or local laws prohibiting age
(including but not limited to all claims or rights arising under any
statutes, including but not limited to the Age Discrimination in
Employment Act), race, sex, national origin, religion, or other forms
of discrimination, any common law contract, tort or other claims. In
the waiver of your rights arising under the Age Discrimination in
Employment Act, it is understood that you are not waiving any right
that arises after this agreement is executed.
12. You agree that you have read this agreement carefully, and that you were
given a period of at least 21 days from its date of issuance in which to
execute this agreement, and that you understand you also may revoke this
agreement at any time during a seven-day period following the date of
execution in which case this agreement will have no force and effect.
13. You are advised to consult with an attorney prior to executing this
agreement, and you acknowledge you have been given a reasonable opportunity
to do so.
Dennis C. Hood
Senior Vice President
Human Resources & Administration
ACCEPTED AND AGREED:
_____________________________ _________________
J. G. LaCroix Date
[Letterhead & Logo
75 Tri-State International
Suite 222
Lincolnshire, Illinois 60069
708-317-2400
FAX: 708-317-1900
Morgan Products Ltd.]
May 9, 1995
(Revised June 2, 1955)
Mr. Donald E. Schlegel
2789 Fox Run
Appleton, WI 54915
Dear Don:
This letter sets forth our discussions regarding your separation of employment
from Morgan Products Ltd. and its subsidiaries (collectively, the "Company") and
represents the entire agreement between you and the Company with respect to any
and all severance benefits to which you are entitled from the Company. This
Agreement incorporates the terms and provisions of the Special
Severance/Retention Plan for Executive officers, dated March 30, 1994 (the
"Plan"), the terms and conditions of which, except as specifically modified and
stated herein, apply to this agreement.
1. Your separation from the Company will be considered a Qualifying
Termination under Section 3.2 of the Plan. Friday, May 19, 1995, shall be
your termination date under the Plan.
2. You agree to forfeit your right under Section 3.2 to at least sixty (60)
days notice prior to the date on which your termination shall become
effective.
3. Payout of cash payments set forth in Section 3.3(d) are hereby revised as
stated further herein.
4. On May 19, 1995 you will become eligible for certain severance payouts
which shall be determined according to Section 3.3(a) of the Plan. The
company's payout obligation under Section 3(a)(i) will be made to you in
thirty-nine biweekly payments through the pay period ending on or about
November 19, 1996. The payout under Section 3.3(a)(ii) shall be made to
you in a lump sum within thirty days of your termination date.
5. Short-term and long-term disability coverage, payments into the Company's
401(k) plan, CAR plan, and Deferred Compensation plan, will terminate on
Friday, May 19, 1995. Reimbursement of the 401(k) plan will be made at
such time as you direct it into a new employer's plan or other directions
of your choosing.
6. Return of credit cards, telephone cards, and keys, should be taken care of
on your last day of work. Any Company equipment you may have in your
possession, such as computers, software, electronic and communications
equipment, is to be returned to the Company.
7. You agree to forfeit to the Company effective with the signing of this
agreement all outstanding options that have been granted to you as of June
2, 1995.
8. In the event of inquiry from prospective employers or prospective
consulting clients, the Company will respond to such reference inquiries
and will refrain from making negative comments about you or your
performance and will generally offer the explanation of your departure as
indicated in Exhibit A attached hereto.
9. While you are not eligible for any payout or deferred bonus reimbursement
under the CAR Plan, the Company agrees to pay you those amounts of your
bonuses that were deferred to that plan for purchases of CARS. That amount
is $4,967.79 and shall be paid to you within thirty days of your
termination date.
10. The Company will also agree to provide you with an additional six months of
salary continuation at your current biweekly rate. Such continuation will
be made in thirteen biweekly payments beginning with the pay period
following that ending on or about November 19, 1996, and continuing through
the pay period ending on our about May 19, 1997.
11. The Company agrees to pay you an additional one-half (.5) multiplied by the
average of your bonus awards earned over the past three years. Such
payment shall be made within thirty days of your termination.
12. In addition, the Company agrees to extend the fringe benefit program
referred to in Section 3.3(c) paragraph two of the Plan, from November 19,
1996 through the pay period ending on or about May 19, 1997.
13. The Company will also agree to provide you with an additional lump sum
payment of $10,000.which shall be paid to you within 30 days of your
termination date.
14. In consideration of 9, 10, 11, 12 and 13 above, you agree as follows:
(a) You will not, for two years after the date you execute this agreement,
without the written consent of the Company, directly or indirectly,
engage or participate in or become employed by or render advisory or
other services to, or have any ownership in any firm, person,
corporations or business enterprise which is engaged in the business
of manufacturing, importing and selling of residential stile and rail
type wood panel doors which compete against Morgan Manufacturing, or
in any business corporation or business enterprise which is primarily
engaged in the wholesale distribution of millwork, - wood windows,
wood flush doors, wood panel doors, pre-hung door units, steel door
units and stairparts - which compete with or against any of the Morgan
Products Ltd. distribution centers.
(b) For two years after the date that you execute this agreement, you will
not engage in solicitation of the Company's employees, and
(c) You will not directly or indirectly use, attempt to use, disclose or
otherwise make known to any person or entity, including without
limitation, lists of customers or suppliers, trade secrets, know-how,
inventions, discoveries, and processes, as well as any data and
records pertaining thereto, which you may have acquired in the course
of your employment; or any knowledge or information of a confidential
nature (including all unpublished matters) relating to, without
limitation, the business, properties, accounting, books and records,
trade secrets, business strategies or memoranda of the Company or its
affiliates, unless the Company agrees in advance in writing to allow
you to do so.
(d) With the exception of obligations set forth in this letter and the
fulfillment of same by the Company, you hereby waive and release the
Company, its successors and assigns, their Officers, Directors, and
employees from all liabilities, obligations, damages, claims, causes
of action and demands, whatsoever, and agree not to sue or file any
claim against the Company or the Company's successors or assigns,
their Officers, Directors, and employees which you now have or
hereafter can, shall or may have, including but not limited to any
claims or rights under federal, state or local
laws prohibiting age (including but not limited to all claims or
rights arising under any statutes, including but not limited to the
Age Discrimination in Employment Act), race, sex, national origin,
religion, or other forms of discrimination, any common law contract,
tort or other claims. In the waiver of your rights arising under the
Age Discrimination in Employment Act,, it is understood that you are
not waiving any right that arises after this agreement is executed.
15. You agree that any violation of you by this Agreement will entitle the
Company to offset any amount owed to you hereunder, in an amount equal to
the unpaid balance owed under this Agreement as of the date of the breach
by you of this Agreement except that, to no extent, will payments be
withheld in excess of actual damages sustained by the Company.
Furthermore, before any unpaid balance is withheld, you will be given
thirty days written notice of such intent to offset and an opportunity to
explain why such action should not be taken. In addition, you agree that
monetary damages under Section 11 herein are not susceptible to precise
calculation, and therefore, in addition to the monetary damages set forth
herein, the Company will be entitled to obtain equitable relief (including,
but not limited to, an injunction) in response to such a breach.
16. It is agreed that the Plan, as it specifically applies to you, may be
modified by this letter upon mutual consent of you and the Company,
Sections 9.4 and 9.8 notwithstanding.
17. You agree that you have read this agreement carefully, and that you were
given a period of at least 21 days from its date of issuance in which to
execute this agreement, and that you understand you also may revoke this
agreement at any time during a seven-day period following the date of
execution in which case this agreement will have no force and effect.
18. You are advised to consult with an attorney prior to executing this
agreement, and you acknowledge you have been given a reasonable opportunity
to do so.
Dennis C. Hood
Senior Vice President
Human Resources & Administration
ACCEPTED AND AGREED
_________________________ _________________
Donald E. Schlegel Date
EXHIBIT A
EXCERPT FROM LARRY R. ROBINETTE
LETTER TO ALL EMPLOYEES DATED MAY 9, 1995:
Don Schlegel will be leaving Morgan Products to pursue other opportunities.
Earlier this year Don, and I had discussions concerning the direction of the
company and the changes we were making. At that time Don expressed his desire
to continue his career as President and or CEO of a stand-alone business. As a
result of that discussion, Don and I had an understanding that absent a major
acquisition he would be leaving Morgan at a time that would be mutually
convenient.
I want to thank Don for his fine efforts over the past six years. The
manufacturing group faced a number difficult external obstacles in pursuing its
goals. Don and his team were successful in restructuring the business and
positioning it for profitable growth.
Don will be leaving after a brief transition period. We wish him the best in
his future endeavors.
Larry R. Robinette
President
Chief Executive Officer
Exhibit 10.15
[Letterhead & Logo
469 McLaws Circle
Williamsburg, Virginia 23606
804-564-1700
FAX: 804-564-1714]
TO: Larry Robinette DATE: October 4, 1995
FROM: Dennis Hood
SUBJECT:
As a result of action taken by the Board of Directors on September 13, 1995, you
are now covered by Morgan Products Ltd. Change-in-Control Severance Policy. A
copy of that plan, which includes modifications approved by the Committee and
the Board on September 13, 1995, is attached hereto.
Also attached is a copy of the Special Severance Retention Plan for Executive
Officers. On September 13, 1995 the Board approved your participation in that
plan including enhancements made to the plan on April 13, 1994 for certain other
key executives. Those enhancements are as follows:
Section 3.3 of the Plan is modified as it applies to you as follows:
- The multiplier to be used in determining the base salary
award referred to in 3.3(a) has been changed from one and
one-half (1.5) to two (2).
- The eighteen (18) month period for continuation of benefits
referred to in 3.3(c) has been changed to a twenty-four (24)
month period.
For the record, please acknowledge your receipt of these documents by signing
below and returning a copy to my attention.
Dennis C. Hood
Senior Vice President
Human Resources & Received and Acknowledged
Administration
______________________________
Larry R. Robinette
CHANGE-IN-CONTROL
SEVERANCE POLICY
Morgan Products Ltd.
December 1992
(Amended September 1995)
MORGAN PRODUCTS LTD.
CHANGE-IN-CONTROL
SEVERANCE POLICY
The Board of Directors of Morgan Products Ltd. ("Morgan" or the "Company")
has adopted a special policy providing for severance payments to certain Covered
Executives in the event their service is severed as the result of an Acquisition
of Morgan. You have been selected to be a Covered Executive in the program.
Because of its unusual nature, you are requested to keep this matter extremely
confidential. Only those listed above have been selected to participate, and
the program should not be discussed with others. For purposes of this policy,
an "Acquisition" is defined as follows:
The occurrence of (i) any transaction or series of transactions which
within a 12-month period constitute a change of management or control,
which shall be deemed to have occurred whenever (A) at least
thirty-five percent (35%) of the then outstanding shares of Common
Stock of the Company are (for cash, property (including, without
limitation, stock in any corporation), or indebtedness, or any
combination thereof) redeemed by the Company or purchased by any
person(s), firm(s) or entity(ies), or exchanged for shares in any other
corporation whether or not affiliated with the Company, or any
combination of such redemption, purchase or exchange, or (B) at least
fifty-one percent (51%) of the Company's assets are acquired by any
person(s), firm(s) or entity(ies) whether or not affiliated with the
Company for cash, property (including, without limitation, stock in any
corporation) or indebtedness or any combination thereof, or (C) during
any period of two (2) consecutive years (not including any period prior
to the execution of this severance policy), individuals who at the
beginning of such period constitute the Board (and any new Director,
whose election by the Company's stockholders was approved by a vote of
at least two-thirds (2/3) of the Directors then still in office who
either were Directors at the beginning of the period or whose election
or nomination for election was so approved), cease for any reason to
constitute a majority thereof, or (D) the Company is merged or
consolidated with another corporation regardless of whether the company
is the survivor, or (ii) any substantial equivalent of any such
redemption, purchase, exchange, transaction or series of transactions,
acquisition, merger or consolidation, which the Board of Directors
reasonably determines constitutes such a change of management or
control. For purposes of the foregoing definition the term "control"
shall have the meaning ascribed thereto under the Securities Exchange
Act of 1934, as amended, and the regulations thereunder, and the term
management shall mean both the chief executive officer and the chief
operating officer of the Company.
The Company's severance policy for Covered Executives in the event of an
Acquisition (as defined above) shall be as follows:
Subject to the terms of this severance policy, in the event that a
Covered Executive's employment is terminated within thirty (30) months
following an Acquisition, the Executive will be paid a severance
benefit equal to his monthly base salary rate then in effect,
multiplied by thirty (30). In addition, the Covered Executive shall be
paid a severance benefit equal to his three-year average bonus award
(determined as the average annual bonus earned in the three full fiscal
years prior to the fiscal year in which employment termination occurs),
multiplied by 2.5. Such payment shall be made to the Covered Executive
in cash, in one lump sum, within sixty (60) days following the
effective date of a termination.
Regardless of any other provision herein, or any other plan or policy
providing for compensation and/or benefits following a Change in Control, the
limitations set forth in Appendix A attached hereto shall apply.
For purposes of this severance policy, an employment "termination" shall
include any of the following which results in the Covered Executive resigning
his or her employment within such thirty (30) months period: (i) any reduction
in the Covered Executive's annual rate of salary below the amount in effect
immediately prior to the Acquisition, or any significant reduction in the
Executive's benefits package; (ii) any assignment of new duties that requires
the Covered Executive to relocate his or her domicile; and (iii) any significant
reduction or diminution in the duties, responsibilities, or position of the
Covered Executive from that in effect immediately prior to the Acquisition,
other than a change that results directly from a change in the organization or
form of entity of the Company.
In addition to the payments of base salary, any unpaid vacation for the
fiscal year, including that portion of vacation to which the Covered Executive
would have been entitled had he been employed for the entire fiscal year in
which employment termination occurs as well as any unused vacation not taken in
the prior fiscal year, will be paid in cash at the date of termination. The
full fringe benefit program of the Covered Executive will be continued for the
thirty (30) month period after termination, except that: (1) group medical
benefits will continue beyond the time at which the Covered Executive becomes
gainfully employed by and covered under the group insurance program of another
firm only to the extent of preexisting conditions not covered by the successor
employer's group medical program and only for such thirty (30) month period, and
(2) salary continuation insurance, under terms of the Company's insurance
policy, will terminate on the last day a Covered Executive shall work.
In addition, those Covered Executives who are eligible for participation in
the Executive Performance Incentive Plan of the Company will receive certain
bonus payments under said plan in the event of an Acquisition under the
following circumstances; if in connection with or following any Acquisition the
covered Executive is terminated, the Covered Executive shall receive payment for
a full year's bonus at least at the level set as standard by the Company for the
Executive in the year in which the employment termination occurs (whether or not
the target is actually achieved), without any proration for the period of the
Covered Executive's full-time services.
The salary, bonus, vacation, and fringe benefit payments are dependent on
the Covered Executive staying with the Company until released. The Company will
seek to accommodate any special needs with regard to termination dates, but in
any event, the decision of the Board of Directors will be final.
Each Covered Executive shall be entitled to obtain outplacement assistance
of his or her choice following a qualifying termination, and shall be reimbursed
for the full cost of such outplacement assistance; provided, however, that the
maximum cost which shall be reimbursed by the Company is fifteen percent (15%)
of the Covered Executive's base salary; and, provided further, that such
obligation by the Company to reimburse such costs shall terminate on the second
anniversary of the effective date of termination. Covered Executives shall be
required to submit fee vouchers corresponding to the outplacement assistance,
and, subject to the preceding sentence, shall be reimbursed in cash for each
qualifying voucher, within forty-five (45) days following the submission of the
voucher to the Company.
To the extent permitted by law, the Company shall pay all legal fees, costs
of litigation, prejudgment interest, and other expenses incurred in good faith
by a Covered Executive as a result of the Company's refusal to provide severance
benefits to which the Covered Executive becomes entitled under this severance
policy, or as a result of the Company's contesting the validity, enforceability,
or interpretation of this severance policy, or as a result of any conflict
between the parties pertaining to this severance policy.
Without the prior written consent of the Company, during the term of this
severance policy, and for a period of twenty-four (24) calendar months
thereafter, the Covered Executive shall not, directly or indirectly:
(a) Use, attempt to use, disclose, or otherwise make known to any person
or entity (other than the Board of Directors of the Company or
otherwise in the course of the business of the Company and its
affiliates):
(i) Any knowledge or information, including without limitation,
lists of customers or suppliers, trade secrets, know-how,
inventions, discoveries, and processes, as well as any data
and records pertaining thereto, which he may acquire in the
course of his employment; or
(ii) Any knowledge or information of a confidential nature
(including all unpublished matters) relating to, without
limitation, the business, properties, accounting, books and
records, trade secrets, or memoranda of the Company or its
affiliates.
(b) Engage or become interested (whether as an owner, general partner,
officer, employee, consultant, or otherwise) in the business of
selling, leasing, manufacturing, designing, or otherwise producing or
distributing products or systems, or any other business or businesses
then conducted by the Company or its subsidiaries in the United States
of America, except that nothing in this subparagraph shall be deemed
to prohibit the acquisition or holding of not more than two percent
(2%) of the shares or other securities of a publicly owned corporation
if such securities are regularly traded on a national securities
exchange or over the counter.
(c) Employ, retain, or arrange to have any other person, firm, or other
entity employ, retain, or otherwise participate in the employment or
retention of any person who is an employee or consultant of the
company or its affiliates.
(d) As used in this severance policy, the term "affiliate" shall mean any
corporation, partnership, or business enterprise owned or controlled
by the Company or by a corporation which, directly or indirectly, owns
or controls the Company.
This severance policy is intended to provide benefits to the Covered
Executives that may be greater, with respect to certain benefits, than benefits
presently provided for in employment agreements between the Company and one or
more of such Covered Executives. To the extent that any particular benefit
provided for in this severance policy exceeds any benefits in any such
employment agreement, the provisions of this severance policy shall govern and
control the Company's obligations to the extent of such excess only. To the
extent that any benefits in any such employment agreement are greater than those
provided in this policy with respect to particular items, then the Covered
Executive shall receive no benefits under this policy with respect to such items
and shall receive only said greater benefits payable under the employment
agreement.
In the event of an Acquisition, uncertainties can be created for everyone.
It is the Board's desire to let you focus on your management responsibilities in
such a situation. Therefore, this policy has been designed to provide you with
additional personal financial security in the event that any new owners of the
Company should decide your service is no longer required. We do not expect
severances to occur in such a situation, but appropriate transition payments
have been provided for on the off chance they do occur.
Appendix A
Limitation on Termination Payment
Notwithstanding any other provision of this severance policy, if any portion of
the severance benefits or any other payment under this severance policy, or
under any other agreement with or plan of the Company (in the aggregate "Total
Payments") would constitute an "excess parachute payment," then the payments to
be made to the Covered Executive under this severance policy shall be reduced
such that the value of the aggregate Total Payments that the Covered Executive
is entitled to receive shall be one dollar ($l) less than the maximum amount
which the Covered Executive may receive without becoming subject to the tax
imposed by Section 4999 of the Internal Revenue Code of 1986 (the "Code"), or
which the Company may pay without loss of deduction under Section 28OG(a) of the
Code.
However, the payments to be made to the Covered Executive under this severance
policy shall be reduced if and only if so reducing the payments results in the
Covered Executive receiving a greater net benefit than he would have received
had a reduction not occurred and an excise tax been paid pursuant to Code
Section 4999.
For purposes of this severance policy, the terms "excess parachute payment" and
"parachute payments" shall have the meanings assigned to them in Section 28OG of
the Code, and such "parachute payments" shall be valued as provided therein.
Procedure for Establishing Limitation an Termination Payment
Within sixty (60) days following delivery of the notice of termination or notice
by the Company to the Covered Executive of its belief that there is a payment or
benefit due to the Covered Executive which will result in an "excess parachute
payment" as defined in Section 28OG of the Code, the Covered Executive and the
Company, at the Company's expense, shall obtain the opinion of such legal
counsel, which need not be unqualified, as the Covered Executive may choose,
which sets forth: (i) the amount of the Covered Executive's "annualized
includible compensation for the base period" (as defined in Code Section
28OG(d)(1)); (ii) the present value of the Total Payments; and (iii) the amount
and present value of any "excess parachute payment." The opinion of such legal
counsel shall be supported by the opinion of a certified public accounting firm
and, if necessary, a firm of recognized executive compensation consultants.
Such opinion shall be binding upon the Company and the Covered Executive.
In the event that such opinion determines that there would be an "excess
parachute payment," the severance benefits hereunder or any other payment
determined by such counsel to be includible in Total Payments shall be reduced
or eliminated as specified by the A-1 Covered Executive in writing delivered
to the Company within thirty (30) days of his receipt of such opinion, or, if
the Covered Executive fails to so notify the Company, then as the Company
shall reasonably determine, so that under the basis of calculations set
forth in such opinion, there will be no "excess parachute payment."
The calculations, notices, and opinion provided for herein shall be based upon
the conclusive presumption that; (i) the compensation and benefits provided for
herein; and (ii) any other compensation earned prior to the effective date of
termination by the Covered Executive pursuant to the Company's compensation
programs (if such payments would have been made in the future in any event, even
though the timing of such payment is triggered by the Change in Control), are
reasonable.
Subsequent Imposition of Excise Tax
If, notwithstanding compliance with the provisions herein, it is ultimately
determined by a court or pursuant to a final determination by the Internal
Revenue Service that any portion of the Total Payments is considered to be a
"parachute payment," subject to excise tax under Section 4999 of the Code, which
was not contemplated to be a "parachute payment" at the time of payment (so as
to accurately determine whether a limitation should have been applied to the
Total Payments to maximize the net benefit to the Covered Executive), the
Covered Executive shall be entitled to receive a lump sum cash payment
sufficient to place the Covered Executive in the same net after-tax position,
computed by using the "Special Tax Rate" as such term is defined below, that the
Covered Executive would have been in had such payment not been subject to such
excise tax, and had the Covered Executive not incurred any interest charges or
penalties with respect to the imposition of such excise tax. For purposes of
this severance policy, the "Special Tax Rate" shall be the highest effective
Federal and state marginal tax rates applicable to the Covered Executive in the
year in which the payment contemplated under this severance policy is made.
Exhibit 10.16
[Letterhead & Logo
469 McLaws Circle
Williamsburg, Virginia 23606
804-564-1700
FAX: 804-564-1714]
MORGAN PRODUCTS LTD.
TO: DATE: October 4, 1995
FROM: Dennis Hood
SUBJECT:
On September 13, 1995, the Board of Directors approved certain
modifications/clarifications to the Morgan Products Ltd. Change-in-Control
Severance Policy which apply to you. Attached is the updated and revised policy
document which supersedes and replaces that document provided you in December of
1992.
Please acknowledge receipt of this policy by signing this letter below and
returning a copy for our records.
Dennis C. Hood
Senior Vice President
Human Resources & Administration
Received and Acknowledged
______________________________
CHANGE-IN-CONTROL
SEVERANCE POLICY
Morgan Products Ltd.
December 1992
(Amended September 1995)
For:
MORGAN PRODUCTS LTD.
CHANGE-IN-CONTROL
SEVERANCE POLICY
The Board of Directors of Morgan Products Ltd. ("Morgan" or the
"Company") has adopted a special policy providing for severance payments to
certain Covered Executives in the event their service is severed as the result
of an Acquisition of Morgan. You have been selected to be a Covered Executive
in the program. Because of its unusual nature, you are requested to keep this
matter extremely confidential. Only those listed above have been selected to
participate, and the program should not be discussed with others. For purposes
of this policy, an "Acquisition" is defined as follows:
The occurrence of (i) any transaction or series of
transactions which within a 12-month period constitute a
change of management or control, which shall be deemed to
have occurred whenever (A) at least thirty-five percent (35%)
of the then outstanding shares of Common Stock of the Company
are (for cash, property (including, without limitation, stock
in any corporation), or indebtedness, or any combination
thereof) redeemed by the Company or purchased by any
person(s), firm(s) or entity(ies), or exchanged for shares in
any other corporation whether or not affiliated with the
Company, or any combination of such redemption, purchase or
exchange, or (B) at least fifty-one percent (51%) of the
Company's assets are acquired by any person(s), firm(s) or
entity(ies) whether or not affiliated with the Company for
cash, property (including, without limitation, stock in any
corporation) or indebtedness or any combination thereof, or
(C) during any period of two (2) consecutive years (not
including any period prior to the execution of this severance
policy), individuals who at the beginning of such period
constitute the Board (and any new Director, whose election by
the Company's stockholders was approved by a vote of at least
two-thirds (2/3) of the Directors then still in office who
either were Directors at the beginning of the period or whose
election or nomination for election was so approved), cease
for any reason to constitute a majority thereof, or (D) the
Company is merged or consolidated with another corporation
regardless of whether the company is the survivor, or (ii)
any substantial equivalent of any such redemption, purchase,
exchange, transaction or series of transactions, acquisition,
merger or consolidation, which the Board of Directors
reasonably determines constitutes such a change of management
or control. For purposes of the foregoing definition the
term "control" shall have the meaning ascribed thereto under
the Securities Exchange Act of 1934, as amended, and the
regulations thereunder, and the term management shall mean
both the chief executive officer and the chief operating
officer of the Company.
The Company's severance policy for Covered Executives in the event of
an Acquisition (as defined above) shall be as follows:
Subject to the terms of this severance policy, in the event
that a Covered Executive's employment is terminated within
thirty (30) months following an Acquisition, the Executive
will be paid a severance benefit equal to his monthly base
salary rate then in effect, multiplied by thirty (30). In
addition, the Covered Executive shall be paid a severance
benefit equal to his three-year average bonus award
(determined as the average annual bonus earned in the three
full fiscal years prior to the fiscal year in which
employment termination occurs), multiplied by 2.5. Such
payment shall be made to the Covered Executive in cash, in
one lump sum, within sixty (60) days following the effective
date of a termination.
Regardless of any other provision herein, or any other plan or policy
providing for compensation and/or benefits following a Change in Control, the
limitations set forth in Appendix A attached hereto shall apply.
For purposes of this severance policy, an employment "termination"
shall include any of the following which results in the Covered Executive
resigning his or her employment within such thirty (30) months period: (i) any
reduction in the Covered Executive's annual rate of salary below the amount in
effect immediately prior to the Acquisition, or any significant reduction in the
Executive's benefits package; (ii) any assignment of new duties that requires
the Covered Executive to relocate his or her domicile; and (iii) any significant
reduction or diminution in the duties, responsibilities, or position of the
Covered Executive from that in effect immediately prior to the Acquisition,
other than a change that results directly from a change in the organization or
form of entity of the Company.
In addition to the payments of base salary, any unpaid vacation for
the fiscal year, including that portion of vacation to which the Covered
Executive would have been entitled had he been employed for the entire fiscal
year in which employment termination occurs as well as any unused vacation not
taken in the prior fiscal year, will be paid in cash at the date of termination.
The full fringe benefit program of the Covered Executive will be continued for
the thirty (30) month period after termination, except that: (1) group medical
benefits will continue beyond the time at which the Covered Executive becomes
gainfully employed by and covered under the group insurance program of another
firm only to the extent of preexisting conditions not covered by the successor
employer's group medical program and only for such thirty (30) month period, and
(2) salary continuation insurance, under terms of the Company's insurance
policy, will terminate on the last day a Covered Executive shall work.
In addition, those Covered Executives who are eligible for
participation in the Executive Performance Incentive Plan of the Company will
receive certain bonus payments under said plan in the event of an Acquisition
under the following circumstances; if in connection with or following any
Acquisition the covered Executive is terminated, the Covered Executive shall
receive payment for a full year's bonus at least at the level set as standard by
the Company for the Executive in the year in which the employment termination
occurs (whether or not the target is actually achieved), without any proration
for the period of the Covered Executive's full-time services.
The salary, bonus, vacation, and fringe benefit payments are dependent
on the Covered Executive staying with the Company until released. The Company
will seek to accommodate any special needs with regard to termination dates, but
in any event, the decision of the Board of Directors will be final.
Each Covered Executive shall be entitled to obtain outplacement
assistance of his or her choice following a qualifying termination, and shall be
reimbursed for the full cost of such outplacement assistance; provided, however,
that the maximum cost which shall be reimbursed by the Company is fifteen
percent (15%) of the Covered Executive's base salary; and, provided further,
that such obligation by the Company to reimburse such costs shall terminate on
the second anniversary of the effective date of termination. Covered Executives
shall be required to submit fee vouchers corresponding to the outplacement
assistance, and, subject to the preceding sentence, shall be reimbursed in cash
for each qualifying voucher, within forty-five (45) days following the
submission of the voucher to the Company.
To the extent permitted by law, the Company shall pay all legal fees,
costs of litigation, prejudgment interest, and other expenses incurred in good
faith by a Covered Executive as a result of the Company's refusal to provide
severance benefits to which the Covered Executive becomes entitled under this
severance policy, or as a result of the Company's contesting the validity,
enforceability, or interpretation of this severance policy, or as a result of
any conflict between the parties pertaining to this severance policy.
Without the prior written consent of the Company, during the term of
this severance policy, and for a period of twenty-four (24) calendar months
thereafter, the Covered Executive shall not, directly or indirectly:
(a) Use, attempt to use, disclose, or otherwise make known to any person
or entity (other than the Board of Directors of the Company or
otherwise in the course of the business of the Company and its
affiliates):
(i) Any knowledge or information, including without limitation,
lists of customers or suppliers, trade secrets, know-how,
inventions, discoveries, and processes, as well as any data
and records pertaining thereto, which he may acquire in the
course of his employment; or
(ii) Any knowledge or information of a confidential nature
(including all unpublished matters) relating to, without
limitation, the business, properties, accounting, books and
records, trade secrets, or memoranda of the Company or its
affiliates.
(b) Engage or become interested (whether as an owner, general partner,
officer, employee, consultant, or otherwise) in the business of
selling, leasing, manufacturing, designing, or otherwise producing or
distributing products or systems, or any other business or businesses
then conducted by the Company or its subsidiaries in the United States
of America, except that nothing in this subparagraph shall be deemed
to prohibit the acquisition or holding of not more than two percent
(2%) of the shares or other securities of a publicly owned corporation
if such securities are regularly traded on a national securities
exchange or over the counter.
(c) Employ, retain, or arrange to have any other person, firm, or other
entity employ, retain, or otherwise participate in the employment or
retention of any person who is an employee or consultant of the
company or its affiliates.
(d) As used in this severance policy, the term "affiliate" shall mean any
corporation, partnership, or business enterprise owned or controlled
by the Company or by a corporation which, directly or indirectly, owns
or controls the Company.
This severance policy is intended to provide benefits to the Covered
Executives that may be greater, with respect to certain benefits, than benefits
presently provided for in employment agreements between the Company and one or
more of such Covered Executives. To the extent that any particular benefit
provided for in this severance policy exceeds any benefits in any such
employment agreement, the provisions of this severance policy shall govern and
control the Company's obligations to the extent of such excess only. To the
extent that any benefits in any such employment agreement are greater than those
provided in this policy with respect to particular items, then the Covered
Executive shall receive no benefits under this policy with respect to such items
and shall receive only said greater benefits payable under the employment
agreement.
In the event of an Acquisition, uncertainties can be created for everyone.
It is the Board's desire to let you focus on your management responsibilities in
such a situation. Therefore, this policy has been designed to provide you with
additional personal financial security in the event that any new owners of the
Company should decide your service is no longer required. we do not expect
severances to occur in such a situation, but appropriate transition payments
have been provided for on the off chance they do occur.
Appendix A
Limitation on Termination Payment
Notwithstanding any other provision of this severance policy, if any portion of
the severance benefits or any other payment under this severance policy, or
under any other agreement with or plan of the Company (in the aggregate "Total
Payments") would constitute an "excess parachute payment," then the payments to
be made to the Covered Executive under this severance policy shall be reduced
such that the value of the aggregate Total Payments that the Covered Executive
is entitled to receive shall be one dollar ($l) less than the maximum amount
which the Covered Executive may receive without becoming subject to the tax
imposed by Section 4999 of the Internal Revenue Code of 1986 (the "Code"), or
which the Company may pay without loss of deduction under Section 28OG(a) of the
Code.
However, the payments to be made to the Covered Executive under this severance
policy shall be reduced if and only if so reducing the payments results in the
Covered Executive receiving a greater net benefit than he would have received
had a reduction not occurred and an excise tax been paid pursuant to Code
Section 4999.
For purposes of this severance policy, the terms "excess parachute payment" and
"parachute payments" shall have the meanings assigned to them in Section 28OG of
the Code, and such "parachute payments" shall be valued as provided therein.
Procedure for Establishing Limitation an Termination Payment
Within sixty (60) days following delivery of the notice of termination or notice
by the Company to the Covered Executive of its belief that there is a payment or
benefit due to the Covered Executive which will result in an "excess parachute
payment" as defined in Section 28OG of the Code, the Covered Executive and the
Company, at the Company's expense, shall obtain the opinion of such legal
counsel, which need not be unqualified, as the Covered Executive may choose,
which sets forth: (i) the amount of the Covered Executive's "annualized
includible compensation for the base period" (as defined in Code Section
28OG(d)(1)); (ii) the present value of the Total Payments; and (iii) the amount
and present value of any "excess parachute payment." The opinion of such legal
counsel shall be supported by the opinion of a certified public accounting firm
and, if necessary, a firm of recognized executive compensation consultants.
Such opinion shall be binding upon the Company and the Covered Executive.
In the event that such opinion determines that there would be an "excess
parachute payment," the severance benefits hereunder or any other payment
determined by such counsel to be includible in Total Payments shall be reduced
or eliminated as specified by the A-1
Covered Executive in writing delivered to the Company within thirty (30) days of
his receipt of such opinion, or, if the Covered Executive fails to so notify the
Company, then as the Company shall reasonably determine, so that under the basis
of calculations set forth in such opinion, there will be no "excess parachute
payment."
The calculations, notices, and opinion provided for herein shall be based upon
the conclusive presumption that; (i) the compensation and benefits provided for
herein; and (ii) any other compensation earned prior to the effective date of
termination by the Covered Executive pursuant to the Company's compensation
programs (if such payments would have been made in the future in any event, even
though the timing of such payment is triggered by the Change in Control), are
reasonable.
Subsequent Imposition of Excise Tax
If, notwithstanding compliance with the provisions herein, it is ultimately
determined by a court or pursuant to a final determination by the Internal
Revenue Service that any portion of the Total Payments is considered to be a
"parachute payment," subject to excise tax under Section 4999 of the Code, which
was not contemplated to be a "parachute payment" at the time of payment (so as
to accurately determine whether a limitation should have been applied to the
Total Payments to maximize the net benefit to the Covered Executive), the
Covered Executive shall be entitled to receive a lump sum cash payment
sufficient to place the Covered Executive in the same net after-tax position,
computed by using the "Special Tax Rate" as such term is defined below, that the
Covered Executive would have been in had such payment not been subject to such
excise tax, and had the Covered Executive not incurred any interest charges or
penalties with respect to the imposition of such excise tax. For purposes of
this severance policy, the "Special Tax Rate" shall be the highest effective
Federal and state marginal tax rates applicable to the Covered Executive in the
year in which the payment contemplated under this severance policy is made.
A-2
Exhibit 10.17
[Letterhead & Logo
75 Tri-State International
Suite 222
Lincolnshire, Illinois 60069
708-317-2400
FAX: 807-317-1900
Morgan Products Ltd.]
Mr. Peter Balint
1720 Crestview Drive
Wausau, WI 54403
Dear Pete,
This will confirm our discussion concerning your employment arrangement with
Morgan Products Ltd.
- Your title will be President - Morgan Manufacturing. In addition to
Morgan Manufacturing, you will also have responsibility for Morgan
National Accounts. You will be a corporate officer in these capacities
reporting directly to me.
- Your base salary will be $7,693 bi-weekly, which on an annualized basis
is approximately $200,000.
- You will be a participant in our Executive Performance Incentive Plan
which has a target of 50% and a maximum of 70% of your base salary. One
half of your bonus will be determined on the basis of the corporation's
performance to its Cash Flow Return on Investment (CFOI) objective, and
the other half will be on the basis of Morgan Manufacturing's CFOI
performance. For 1995, your bonus will be calculated on those salary
dollars earned in this calendar year with a guaranteed minimum bonus of
$40,000.
- You will be eligible for the same benefit package as all other senior
executives. That package includes health and dental coverage, life
insurance, travel accident insurance, long-term disability, and a 401(K)
savings and profit sharing plan. We also have a deferred compensation
program in which you will be eligible to participate.
- During this calendar year, you will be eligible for two (2) weeks of
vacation. Beginning in 1996, you will be eligible for four (4) weeks of
vacation.
- Expenses associated with moving, home sale and home purchase, and
temporary living will be handled in accordance with Morgan Products
Ltd. Employee Relocation policy.
- You will be eligible for an initial offering of 50,000 shares of stock
options which will vest over a two year period. The first 33-1/3% will
be made available following the May 17, 1995 meeting of the Board of
Directors. The price for the options shall be the market price on the
day the Board approves the option grant. The second and third vesting
at 33-1/3% each shall follow at twelve (12) and twenty-four (24) months
respectively.
- If you are terminated at any time during the next twenty-four (24) month
period, you will be eligible for severance pay equal to your bi-weekly
base pay then in effect payable over the balance of the twenty-four (24)
month period or for twelve (12) months, whichever is greater. After
twenty-four (24) months, you will be eligible for twelve (12) months of
bi-weekly pay in the event of termination. This severance arrangement
will not be applicable if your employment is terminated for cause, or
because of death, disability, voluntary retirement, or resignation.
- You are eligible for a Company-provided automobile (Buick Park Avenue,
or equivalent), which will be grossed up for personal use so as to
off-set the tax impact.
- The Company will also provide you with a Company-paid country club
membership.
Pete, I believe this covers all the items we discussed. While we have expanded
the scope of the position from our earlier discussions, I am confident that you
can provide the leadership on the Manufacturing side as well as in the National
Accounts area. As we have discussed, it is critical that we move quickly to
develop and implement category management and other new program initiatives that
will enable us to be a more viable and profitable player with the large
retailers.
I believe there are some tremendous opportunities for Morgan, and I am looking
forward to you being on our team. If you have any questions on any of the
various programs above, please contact Dennis Hood.
Best Regards,
Larry R. Robinette
President
Chief Executive Officer
cc: Dennis C. Hood
Exhibit 10.18
Incentive Stock Option Plan
(Amended as of May 1995)
Morgan Products Ltd.
Contents
_________________________________________________________________
Page
Section 1. Definitions
Section 2. Purposes
Section 3. Shares Reserved for the Plan
Section 4. Administration of the Plan
Section 5. Eligibility
Section 6. Option Agreements
Section 7. Option Price
Section 8. Terms of Options
Section 9. Termination of Options
Section 10. Annual Limitation
Section 11. Exercise of Options
Section 12. Payment
Section 13. Nontransferability
Section 14. Purchase for Investment: Compliance with Securities Laws
Section 15. Adjustment of Shares
Section 16. Registration or Qualification of Shares
Section 17. Withholding Tax
Section 18. Suspension, Amendment, or Termination of Plan
Section 19. Effective Date and Duration of Plan
Section 20. Nonqualified Options
Section 21. Successors
Section 22. Governing Law
Incentive Stock Option Plan
(Amended as of May 1995)
Morgan Products Ltd.
Section 1. Definitions
As used herein, the following words and phrases shall have the following
meanings:
(a) Board: The Board of Directors of the Company.
(b) Change of Control shall mean the occurrence of any one or more of the
following:
(i) Any transaction or series of transactions which, within a twelve
(12) month period, constitute a change of management or control,
which shall be deemed to have occurred whenever;
(1) At least thirty-five percent (35%) of the then outstanding
shares of Common Stock of the Company are (for cash,
property (including, without limitation, stock in any
corporation), or indebtedness, or any combination thereof
redeemed by the Company or purchased by any person(s),
firm(s) or entity(ies), or exchanged for shares in any
other corporation whether or not affiliated with the
Company, or any combination of such redemption, purchase or
exchange, or
(2) At least fifty-one percent (51%) of the Company's assets
are acquired by any person(s), firm(s) or entity(ies)
whether or not affiliated with the Company for cash,
property (including without limitation, stock in any
corporation) or indebtedness or any combination thereof, or
(3) During any period of two (2) consecutive years (not
including any period prior to the effective date of this
Plan, individuals who at the beginning of such period
constitute the Board (and any new Director, whose election
by the Company's stockholders was approved by a vote of at
least two-thirds (2/3) of the Directors then still in
office who either were Directors at the beginning of the
period or whose election or nomination for election was so
approved), cease for any reason to constitute a majority
thereof, or
(4) The Company is merged or consolidated with another
corporation regardless of whether the Company is the
survivor.
(ii) Any substantial equivalent of any such redemption,, purchase,
exchange, transaction or series of transactions, acquisition,
merger or consolidation, which the Board of Directors reasonably
determines constitutes such a change of management or control.
For purposes of the foregoing definition the term "control" shall have
the meaning ascribed thereto under the Securities Exchange Act of
1934, as amended, and the regulations thereunder, the term
"management" shall mean both the Chief Executive Officer and the Chief
Operating Officer of the Company, and the "effective date of this
Plan" shall be deemed to be the date shareholders approve this Plan at
the 1995 annual shareholders meeting.
(c) Code: The Internal Revenue Code of 1986, as amended.
(d) Committee: The Morgan Products Ltd. Compensation Committee, which
shall be appointed by the Chairman of the Board of the Company and
shall be composed of not fewer than two (2) Directors who meet the
"disinterested administration" rules of Rule 16b-3 under the
Securities Exchange Act of 1934, as amended.
(e) Common Stock: The Common Stock of the Company.
(f) Company means Morgan Products Ltd., a Delaware corporation (including
any and all subsidiaries), or any successor thereto.
(g) Employee: Any employee of the Company.
(h) Incentive Stock Option: A stock option meeting the requirements of
Section 422 of the Code.
(i) Option: The right and privilege granted pursuant to this Plan to
acquire Common Stock pursuant to the terms of an Option Agreement.
(j) Option Agreement: The agreement by which the Company grants an Option
to an Employee and which identifies the specific terms and conditions
of that Option.
(k) Optionee: An Employee holding an Option.
(l) Plan: The Morgan Products Ltd. Incentive Stock Option Plan, as herein
set forth.
Section 2. Purposes
The purposes of the Plan are:
(a) To encourage the sense of proprietorship on the part of the Employees
who will be largely responsible for the continued growth of the Company;
(b) To furnish the Employees with further incentive to develop and promote
the business and financial success of the Company;
(c) To induce the Employees to continue in the service of the Company, by
providing a means by which such Employees may be given an opportunity to
purchase Common Stock;
(d) To give the Employees an opportunity to share in the growth of the
Company; and
(e) To obtain for the Employees, in the case of Incentive Stock Options
granted hereunder, the favorable tax treatment accorded Incentive
Stock Options.
Section 3. Shares Reserved for the Plan
Subject to adjustment as provided in Section 15 herein, there is hereby
reserved for issuance to Employees under the Plan an additional one hundred
fifty thousand (150,000) shares of Common Stock (in addition to the seven
hundred fifty thousand (750,000) shares originally authorized in 1985, one
hundred three thousand two hundred (103,200) of which have been exercised since
1985). Such shares available for grants of Options shall be increased by the
number of shares available under this Section 3 which are covered by Options
which have lapsed, expired, terminated, or been canceled. In addition, any
shares originally reserved for issuance under this Plan in 1985 (including the
1990 amendment to the Plan) (the 'Original Authorized Shares") in excess of the
number of shares granted under Option hereunder prior to the effective date of
this Plan (i.e., the date of the 1995 annual shareholders meeting) plus any such
shares in connection with Options granted under the Original Authorized Shares
which lapse, expire, terminate, or are canceled, shall also be reserved and
available for issuance or reissuance under this Section 3. Any outstanding
Options covering Original Authorized Shares shall continue to remain outstanding
in accordance with the terms hereof. If any Option granted under this Plan is
canceled, terminates, expires, or lapses for any reason, any shares subject to
such Option again shall be available for the grant of an Option Award under the
Plan.
Section 4. Administration of the Plan
(a) The Plan shall be administered by the Committee. In administering the
Plan, the Committee will be subject to the provisions of the By-Laws of the
Company generally applicable to the operation of committees of the Board.
(b) Subject to the express provisions of the Plan, the Committee shall
have full power and authority, in its discretion, to determine initially and
from time to time those Employees to whom Options are to be granted and, subject
to the limitations imposed by Section 18 hereof, the times when such Options
shall be granted, the terms and conditions of each Option (including whether
such Option shall be an Incentive Stock Option or a nonqualified stock option),
and the number and purchase price of shares to be covered by each Option.
(c) Subject to the express provisions of the Plan, the Committee shall
also have the power and authority to construe and interpret the Plan and the
Option Agreements entered into thereunder and to make all other determinations
necessary or advisable for administering the Plan. The determination of the
Committee on all matters referred to in this section shall be final and
conclusive.
Section 5. Eligibility
Options may be granted to any Employee who is selected in accordance with
the provisions of this Plan by the Committee; provided, however, that no Option
may be granted to an Employee if the sum of the number of shares of Common Stock
subject to the Option plus the number of shares owned, directly or indirectly,
within the meaning of Section 318(a) of the Code, by the Employee as of the date
the Option is granted exceeds three percent (3%) of the issued and outstanding
Common Stock as of said date.
Section 6. Option Agreements
As a condition to the granting of an Option pursuant to this Plan, the
Committee will require each Optionee to execute a written Option Agreement. The
Option Agreement shall specify terms and conditions not inconsistent with this
Plan under which the Option is granted.
Section 7. Option Price
The per share purchase price of the Common Stock under each Option shall be
stated in the Option Agreement and, in all cases, shall be at least equal to the
fair market value of one (1) share of Common Stock on the date of grant of such
Option, as determined by the Committee.
Section 8. Terms of Options
Notwithstanding any other provision of this Plan, no Incentive Stock Option
granted hereunder shall be exercisable more than ten (10) years from the date of
grant of such Option, and no other Option granted hereunder shall be exercisable
more than ten (10) years and one (1) day from the date of grant of the Option.
Section 9. Termination of Options
Each Optionee's Option Agreement shall set forth the extent to which the
Optionee shall have the right to exercise the Option following termination of
the Optionee's employment with the Company and its subsidiaries. Such
provisions shall be determined in the sole discretion of the Committee, shall be
included in the Option Agreement entered into with Optionees, need not be
uniform among all Options issued pursuant to the Plan, and may reflect
distinctions based on the reasons for termination of employment.
Section 10. Annual Limitation
Notwithstanding any other provision of this Plan, the aggregate fair market
value (determined as of the time the Option is granted) of the Common Stock with
respect to which Incentive Stock Options are exercisable for the first time by
any Employee in any one (1) calendar year (under all incentive stock option
plans of the Company and its parent and any subsidiaries, including this Plan)
shall not exceed one hundred thousand dollars ($100,000). Subject to the
preceding sentence, the Committee shall have discretion in determining the
number of shares of Common Stock subject to Options granted to each Optionee;
provided, however, that the maximum number of shares subject to Options which
may be granted under this Plan to any single Employee during any calendar year
is seventy-five thousand (75,000).
Section 11. Exercise of Options
(a) Subject to the terms and conditions of the Plan and of the Option
Agreements entered into hereunder, Options may be exercised only by:
(i) Delivery of notice of exercise to the Company at its principal
office, attention of the Secretary, together with
(ii) Payment for the shares of Common Stock being so acquired.
(b) Except as otherwise provided in Section 9 hereof, each Option granted
hereunder shall be exercisable during the term thereof in accordance with such
terms and conditions as the Committee shall, in its sole discretion, impose;
provided, however, that no such term or condition shall be inconsistent with any
express provision of the Plan.
(c) On the exercise of and payment for an Option, a certificate or
certificates evidencing the shares of Common Stock as to which the Option is
exercised shall be delivered to the Optionee.
(d) An Option may be exercised during the Optionee's lifetime only by the
Optionee. In the event of the death of an Optionee, the Option or Options
theretofore granted to him may be exercised by the estate of the Optionee or by
a person who is the Optionee's spouse or surviving child and who acquired the
rights under the Option or Options by bequest or inheritance; provided, however,
that such exercise may be made only to the extent of the Optionee's right to
exercise the Option or Options at the time of his death.
(e) Notwithstanding the provisions of Section 11(b) hereof, in the event
of a Change of Control during the term of one (1) or more Options, each such
Option granted on or after February 14, 1990 and outstanding as of the effective
time of such Change of Control shall, effective as of the effective time of such
Change of Control, become exercisable with respect to all unexercised shares
thereunder for the remainder of its term; provided, however, in the event the
Optionee's employment with the Company (or any successor company) is terminated
after a Change of Control, such Option granted on or after February 14, 1990
shall remain exercisable for a period equal to the lesser of (i) seven (7)
calendar months after such termination of employment; or (ii) the remainder of
its term. Upon exercise of any Option subsequent to a Change of Control, the
Optionee shall be entitled to receive the securities or other such consideration
he would have been entitled to receive had he been entitled to exercise, and had
he exercised, such Option immediately prior to such Change of Control.
(f) Notwithstanding the provisions of Section I 1 (b) hereof, each Option
granted on or after February 14, 1990 and outstanding for at least one hundred
eighty (180) days during any fiscal year of the Company, commencing with the
fiscal year ended December 31, 1990, shall immediately become exercisable in
full by the holder thereof upon a determination that the Company has met one
hundred percent (100%) of budgeted Income Before Income Taxes for such fiscal
year. Such budgeted Income Before Income Taxes shall be as set annually by the
Board in connection with the adoption of the Company's budget for each fiscal
year, and the determination that the Company has met one hundred percent (100%)
of such budgeted Income Before Income Taxes shall be based upon the Company's
audited financial statements for such fiscal year, with the date of such
determination being the date of certification of such financial statements by
the independent accountants for the Company.
Section 12. Payment
Payment of the purchase price for shares purchased under Options must be
made in full by certified or bank cashier's check, or such other method as is
authorized by the Committee, including but not limited to, the tender of
previously held shares and broker-assisted "cashless" exercises.
Section 13. Nontransferability
An Option may not be transferred except by will or the laws of descent and
distribution. The exercise of any Option so transferred shall be subject to the
terms of this Plan.
Section 14. Purchase for Investment: Compliance with Securities Laws
Each Optionee and each other person who shall exercise an Option shall
acknowledge, represent, and agree, as the case may be, that:
(a) The Company shall not be obligated to transfer Common Stock pursuant
to the exercise of an Option unless the exercise of such Option and the
transfer of such Common Stock shall comply with all relevant provisions of
law, including, without limitation, the Securities Act of 1933, as amended,
the Securities Exchange Act of 1934, as amended, the rules and regulations
promulgated thereunder, and applicable state securities laws;
(b) The Company shall be entitled to rely upon an opinion of counsel
selected by the Company as to whether any such transfer would be lawful;
(c) All Common Stock purchased pursuant to an Option is being purchased
for investment and not with a view to the distribution or resale thereof;
and
(d) Common Stock purchased pursuant to an Option will not be sold,
assigned, or transferred except in compliance with applicable federal and
state securities laws.
Section 15. Adjustment of Shares
In the event of any change in corporate capitalization, such as a stock
split, or a corporate transaction, such as any merger, consolidation,
separation, including a spin-off, or other distribution of stock or property of
the Company, any reorganization (whether or not such reorganization comes within
the definition of such term in Internal Revenue Code Section 368) or any partial
or complete liquidation of the Company, such adjustment shall be made in the
number and class of shares of Common Stock which may be delivered under the
Plan, and in the number and class of and/or price of shares of Common Stock
subject to outstanding Options granted under the Plan, as may be determined to
be appropriate and equitable by the Committee, in its sole discretion, to
prevent dilution or enlargement of rights; provided, however, that the number of
shares subject to any Option shall always be a whole number.
Section 16. Registration or Qualification of Shares
Notwithstanding anything herein to the contrary, no Option granted
hereunder may be exercised, and no shares shall be issued with respect to an
Option, unless at the time of exercise either (A) (i) a registration statement
has been filed with the Securities and Exchange Commission which has become
effective with respect to the shares subject to the Option; (ii) appropriate
registration or qualification has been effected under applicable state
securities laws; (iii) the exercise of such Option and the issuance and delivery
of such shares pursuant thereto shall comply with all applicable provisions of
law and the requirements of any stock exchange upon which the shares may then be
listed; or (B) the Committee shall have determined, based upon the advice of
counsel, that an exemption from registration shall be available with respect to
the issuance of shares subject to an Option, and the issuance and delivery of
such shares pursuant thereto shall comply with all applicable provisions of law.
Any such exercise of an Option and the issuance of shares with respect thereto
shall be further subject to the approval of counsel for the Company with respect
to such compliance.
Section 17. Withholding Tax
The Company may make such provisions as it may deem appropriate for the
withholding of any taxes which the Company determines it is required to withhold
in connection with the grant or exercise of any Option or the disposition of any
Common Stock acquired pursuant to the exercise of an Option, and may authorize
Optionees to satisfy such withholding obligations by having the Company withhold
the number of shares of Common Stock under Option necessary to satisfy all or
part of the withholding liability.
Section 18. Suspension, Amendment, or Termination of Plan
The Board shall have the right, at any time, to suspend, amend, or
terminate the Plan; provided, however, that unless duly approved by the holders
of a majority of the Common Stock of the Company, no amendment shall increase
the total number of shares that shall be subject to the Plan; and, provided
further, that no termination of the Plan or action by the Board amending or
suspending the Plan shall affect or impair the rights of an Optionee under any
Option previously granted and still outstanding under the Plan, except as
otherwise provided herein. No Option may be granted under the Plan during any
suspension thereof or after the termination thereof.
Section 19. Effective Date and Duration of Plan
This Plan originally became operative and effective on its adoption by the
holders of a majority of the outstanding shares of Common Stock of the Company
at the 1985 annual shareholders meeting. The Plan was originally scheduled to
terminate on the tenth (10th) anniversary of its effective date. As amended
herein, the Plan's duration shall be extended for ten years after the date of
adoption of this amended Plan by the Company's shareholders at the 1995 annual
shareholders meeting. The termination of this Plan shall not affect or impair
the rights of an Optionee under any Option previously granted and still
outstanding under the Plan, except as otherwise provided herein.
Section 20. Nonqualified Options
Options issued under the Plan may be Incentive Stock Options or
nonqualified stock Options. Any other provision of the Plan to the contrary
notwithstanding, nonqualified stock options granted hereunder shall be subject
to such terms and conditions and be exercisable at such price as the Committee,
in its sole discretion, determines to be appropriate; provided, however, that
each such nonqualified Option shall clearly be identified as such. No
subsequent determination that an Option granted hereunder which is intended to
be an Incentive Stock Option fails to qualify as such shall affect the validity
or enforceability of such Option, which shall be considered a validly issued
nonqualified Option. To the extent any Option granted hereunder as an Incentive
Stock Option exceeds the limit set forth in the first sentence of Section 10
hereof, such Option shall be bifurcated, and as to the number of shares, the
aggregate price of which would not exceed such limit, the Option shall be
considered an Incentive Stock Option, and as to the excess, such Option shall be
considered a nonqualified Option.
Section 21. Successors
All obligations of the Company under the Plan with respect to Options
granted hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.
Section 22. Governing Law
To the extent not preempted by Federal law, the Plan, and all agreements
hereunder, shall be construed in accordance with and governed by the laws of the
State of Delaware.
CERTAIN TRANSACTIONS
See "Compensation Committee Interlocks and Insider Participation" for a
discussion of Certain Transactions.
2. PROPOSAL TO AMEND AND RESTATE THE MORGAN PRODUCTS LTD.
1990 INCENTIVE STOCK OPTION PLAN
In June 1985, the Company's Board of Directors and stockholders approved
the Incentive Stock Option Plan (referred to in this section of the proxy as the
"Plan") which was amended in 1990. Pursuant to the Plan, incentive stock
options which meet the requirements of Section 422 of the Code and nonqualified
stock options may be granted. The total number of shares of Common Stock which
were originally authorized for grant under options under the Plan was 750,000
(103,200 of which have been exercised since 1985). The 1985 Stock Option Plan
will expire in June, 1995 and will be replaced with a new Stock Option Plan
("the Stock Option Plan"). This amendment to the Plan seeks shareholder
approval of an additional authorization to grant one hundred fifty thousand (
150,000) shares of Common Stock under options. Any unused shares under the
original authorization of seven hundred fifty thousand (750,000) shares shall
also remain available for grant under the Plan. In addition, any shares under
options which expire, terminate, lapse, or are forfeited (whether pursuant to
options granted under the original share authorization or this 1995 additional
share authorization) shall once again be available for grant under the Plan.
All salaried employees of the Company (currently approximately 500
individuals) are eligible to receive grants of options under the Plan, including
all named executive officers appearing within this proxy statement. Members of
the Board of Directors who are not employees are not eligible to participate in
the Plan. As of the date of this proxy statement, neither the individuals who
are to receive options, nor the number of shares under option that will be
granted to any individual or group of individuals have been determined.
Full payment for shares purchased upon exercise of an option, along with
payment of any required tax withholding, must be made at the time of exercise.
This amendment to the Plan allows the Compensation Committee to authorize the
surrender of previously held shares and the use of a broker-assisted.
"cashless" exercises, to satisfy the exercise price.
This amendment to the Plan clarifies that the Plan will be administered by
a committee of members of the Board of Directors, all of whom are "disinterested
administrators" as defined under Rule 16b of the Securities Exchange Act of
1934. The Plan shall be administered by the Compensation Committee (the
"Committee"). The Committee has sole discretion to determine, subject to the
express provisions of the Plan, the employees to whom options are granted, the
terms and conditions of such options. whether the options will be incentive
stock options or nonqualified stock options, the time or times at which options
are granted, the option price of the options (which, pursuant to this amendment,
must at least equal the fair market value of Company stock on the date the
option is granted), when such options are exercisable (provided that the maximum
life of an option is ten years and one day), and the number of shares covered by
such options.
No option may be granted to an employee if the sum of the number of shares
of Common Stock subject to the option, plus the number of shares owned directly
or indirectly by the employee as of the date the option is granted exceeds 3% of
the issued and outstanding Common Stock as of such date.
The Plan provides that each option granted on or after February 14, 1990
and outstanding as of the time of a Change of Control shall, effective as of the
effective date of such Change of Control, become exercisable in full for the
remainder of its term; provided, however, in the event the optionee's employment
with the Company (or any successor company) is terminated after a Change of
Control, such option granted on or after February 14, 1990 shall remain
exercisable for a period equal to the lesser of (i) seven (7) calendar months
after such termination of employment or (ii) the remainder of its term. Upon
exercise of any option subsequent to a Change of Control, the optionee shall be
entitled to receive the securities or other consideration he would have been
entitled to receive had he been entitled to exercise, and had he exercised, such
option immediately prior to such Change of Control.
This amendment revises the definition of events which will be deemed to
constitute a Change in Control. Under the amended definition, a Change in
Control will be deemed to exist if: (i) at least 35% of the shares of Common
Stock are acquired by one individual or entity, or are redeemed by the Company,
(ii) at least 51 % of the Company's assets are purchased by one individual or
entity; (iii) a majority of the members of the Board of Directors are replaced;
(iv) the Company is merged or consolidated with another company; or (v) any
substantially equivalent event which is deemed by the Board of Directors to
constitute a change in management or control occurs.
The Plan provides that each option granted on or after February 14, 1990
and outstanding for at least 180 days during any fiscal year of the Company
shall also become exercisable in full by the holder thereof upon a determination
that the Company has met 100% of budgeted Income Before Income Taxes for such
fiscal year. Such budgeted Income Before Income Taxes shall be as set annually
by the Board of Directors in connection with the adoption of the Company's
annual budget.
This amendment to the Plan provides that the per share purchase price of
the Common Stock under each stock option must be at least equal to the fair
market value of Company stock on the date of grant. With respect to incentive
stock options, the aggregate fair market value (determined as of the date the
option is granted) of the Common Stock with respect to which such options are
exercisable for the first time by any one employee in any one calendar year may
not exceed $100,000. This amendment to the Plan preserves the ability to
qualify for full tax deductibility in connection with option exercises (under
Internal Revenue Code Section 162(m)) by adding the restriction that the total
number of shares which may be granted to any one optionee in any calendar year
is seventy-five thousand.
This amendment provides that the Committee shall determine, with respect to
each grant of options, how the options may be exercised following employment
termination. This amendment also extends the term of the Plan until May 16,
2005, clarifies that successors to the business of the Company shall remain
subject to liabilities under the Plan, and makes several other minor revisions
necessary to satisfy various technical requirements.
The shares of Common stock available for purchase under the Plan are the
Company's Common Stock, par value $0.10, and on March 1, 1995, the closing price
of Common Stock was $6.13.
Federal Income Tax Consequences
The following is a general description of Federal income tax consequences
to participants and the Company relating to nonqualified and incentive stock
options that may be granted under the Plan. This discussion does not purport to
cover all tax consequences relating to stock options.
An optionee will not recognize income upon the grant of a nonqualified
stock option to purchase shares of Common Stock. Upon exercise of the option,
the optionee will recognize ordinary compensation income equal to the excess of
the fair market value of the Company's Common Stock on the date the option is
exercised over the option price for such stock. The tax basis of the option
stock in the hand of the optionee will equal the option price for the stock plus
the amount of ordinary compensation income the optionee recognizes upon exercise
of the option, and the holding period for the stock will commence on the day the
option is exercised. An optionee who sells option stock will recognize capital
gain or loss measured by the difference between the tax basis of the stock and
the amount realized on the sale. Such gain or loss will be long term if the
stock is held for more than one year after exercise. The Company will be
entitled to a deduction equal to the amount of ordinary compensation income
recognized by the optionee. The deduction will be allowed at the same time the
optionee recognizes the income.
An optionee will not recognize income upon the grant of an incentive stock
option to purchase shares of the Company Common Stock, and will not recognize
income upon exercise of the option, provided such optionee was an employee of
the Company or a subsidiary at all times from the date of grant until three
months prior to exercise (or one year prior to exercise in the event of death or
disability). Generally, the amount by which the fair market value of the
Company's Common Stock on the date of exercise exceeds the option price will be
includable in alternative minimum taxable income for purposes of determining
alternative minimum tax and such amount will be added to the tax basis of such
stock for purposes of determining alternative minimum taxable income in the year
the stock is sold. Where an optionee who has exercised an incentive stock
option sells the shares acquired upon exercise more than two years after the
grant date and more than one year after exercise, long-term capital gain or loss
will be recognized equal to the difference between the sales price and the
option price. An optionee who sells such shares within two years after the
grant date or within one year after exercise will recognize ordinary
compensation income in an amount equal to the lesser of the difference between
(a) the option price and the fair market value of such shares on the date of
exercise or (b) the option price and the sales proceeds. Any remaining gain or
loss will be treated as a capital gain or loss. The Company or a subsidiary
will be entitled to a deduction equal to the amount of ordinary compensation
income recognized by the optionee in this case. The deduction will be allowable
at the same time the optionee recognizes the income.
If, as a result of a Change in Control event, a participant's options
become immediately exercisable, the additional economic value, if any,
attributable to the acceleration or issuance may be deemed a "parachute payment"
under Section 28OG of the Code. In such case, the participant may be subject to
a 20% nondeductible excise tax as to all or a portion of such economic value, in
addition to any income tax payable. The Company will not be entitled to a
deduction for that portion of any parachute payment that is subject to the
excise tax.
Notwithstanding any of the foregoing discussion with respect to the
deductibility of compensation under the Plan, Section 162(m) would render
nondeductible to the Company certain compensation in excess of $1,000,000 in any
year to certain executive officers of the Company, unless such excess
compensation is "performance based" (as defined) or is otherwise exempt from
Section 162(m). The applicable conditions of an exemption for a
performance-based compensation plan include, among others, a requirement that
the stockholders approve the material terms of the plan, and a requirement that
shareholders approve a maximum number of shares which may be granted to any one
optionee within a given period of time (this requirement is satisfied pursuant
to one of the amendments to the Plan, described above). Stock options that may
be granted under the Plan are intended to qualify for the exception for
performance-based compensation under Section 162(m).
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT YOU VOTE "FOR" THE
AMENDMENT AND RESTATEMENT OF THE MORGAN PRODUCTS LTD. 1990 INCENTIVE STOCK
OPTION PLAN AS DESCRIBED IN THIS PROXY STATEMENT.
3. INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Price Waterhouse LLP, independent
accountants, to examine the financial statements of the Company for the fiscal
year ending December 31, 1995. In accordance with a resolution of the Board of
Directors, this selection is being presented to the stockholders for
ratification at the Meeting.
A representative of Price Waterhouse LLP will attend the Meeting and will
be available to respond to appropriate questions; however, no statement shall be
made by such representative on behalf of the Company.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT YOU VOTE "FOR"
RATIFICATION OF THE SELECTION OF PRICE WATERHOUSE LLP AS THE INDEPENDENT
ACCOUNTANTS OF THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31, 1995.
ANNUAL REPORT AND FINANCIAL INFORMATION
A copy of the Company's Annual Report on Form 10-K for the year ended
December 31, 1994 as filed with the Securities and Exchange Commission will be
furnished without charge (except for exhibits) to orders upon written request
sent to Investor Relations, Morgan Products Ltd, 469 McLaws Circle,
Williamsburg, Virginia 23185.
Exhibit 10.19
MORGAN PRODUCTS LTD.
DEFERRED COMPENSATION PLAN
(Revised 12/20/95)
1. Purpose of Plan.
The purpose of the Morgan Products Ltd. Deferred Compensation Plan (the
"Plan") is to provide enhanced benefits for the present management and highly
compensated key employees of Morgan Products Ltd. and its subsidiaries
(collectively the "Company") in order to provide for their retirement or other
needs. The effective date of the Plan shall be October 1, 1988.
2. Administration.
The Plan shall be administered by, or under the direction of the committee
(the "Committee") appointed by the Compensation Committee of the Board of
Directors of the Company. The Committee shall have all the power and authority
necessary to administer the Plan and to interpret the Plan. No committee member
shall be entitled to act on or decide any matter relating solely to himself or
any of his rights under the Plan.
3. Eligibility and Participation.
The Committee, in its sole discretion, shall designate those employees who
are key employees and thereby are eligible to become participants in the Plan.
In no event, however, shall an employee be eligible to participate or continue
to participate unless effective January 1, 1990 (a) the employee's grade is E-9
or above (or such equivalent grade level designated by the Committee), (b) the
employee's regular pay including bonus and commission earned as of the end of
the preceding calendar year is at least the current year's IRS total
compensation limit of the 401(k) highly compensated top 20% group rounded up to
the next $000 (i.e., for the 1992 $63,000, this number will continue to be
indexed in succeeding years) and (c) the employee's regular base pay as of the
end of the preceding calendar year is at least 80% of (b) (i.e., for 1992
$50,000). Participation shall be limited to key employees who are considered
within a select group of management or highly compensated employees within the
meaning of the Employee Retirement Income Security Act of 1974 ("ERISA"). Each
such key employee who submits a Deferral Agreement to the Company (the
"Participant") shall commence participation in the Plan as of the date specified
in the Deferral Agreement. The Committee reserves the right to revoke or
discontinue participation of any employee who the Secretary of Labor determines
by regulation or ruling in the Committee's opinion is not either within a select
group of management employees or a highly compensated employee. The Committee
shall determine, from time to time, the amount of salary and/or bonus deferral
each Participant shall be eligible to defer; provided that (a) such salary
deferral amount is at least $3,000 per year and that any deferrals in excess of
$3,000 be made in $1,000 increments, (b) any deferral of bonus amounts shall be
made in whole percentages of such bonus, and (c) any deferral of bonus amounts
with respect to 1988 shall not exceed 25% and deferral of bonus amounts for 1989
and thereafter shall not exceed 80%.
4. Deferral Elections.
(a) Election. Each eligible employee shall submit a Deferral Agreement to
the Committee prior to March 1 of the calendar year for which the agreement is
to be effective; provided that (i) in the year that the Plan is first adopted,
Deferral Agreements must be submitted no later than October 1, 1988, and will be
effective only as to compensation earned and paid after that date and (ii) newly
eligible Participants who submit Deferral Agreements within 30 days of first
being eligible to participate under the Plan may begin deferrals on a date other
than March 1, at the discretion of the Committee, but only as to compensation
earned and payable after the date specified in the Deferral Agreement. Subject
to approval of the Committee, a deferral election as to salary may be increased
in increments of $1,000 effective March 1 of any calendar year but only as to
compensation earned and payable after such date. Except as provided in Sections
4(b) and 6(d) below, a Participant's deferral election pursuant to his Deferral
Agreement may not be revoked or otherwise reduced for a period of either five or
eight years, as specified in the Deferral Agreement; provided that if a
Participant is at least 62 years of age on the date he is first eligible to
participate in the Plan, the Committee may, in its sole discretion, substitute a
shorter period for the five year period. Notwithstanding the foregoing
sentence, a Participant who has elected to defer bonus amounts for 1992 and/or
thereafter may change such bonus deferral election only if, and to the extent,
such Participant is eligible to and makes a corresponding deferral for such
bonus under the Morgan Products Ltd. Convertible Appreciation Rights Plan.
Effective for calendar years beginning with January 1, 1994, if an eligible
employee expects, in the ensuing calendar year, to earn compensation, as defined
in the Morgan Products Ltd. Profit Sharing and Savings Retirement Plan ("PSSR"),
in excess of the limits for such year imposed by Section 401(a)(17) of the
Internal Revenue Code of 1986 ("Code"), he may elect to defer from his salary
and/or bonus for such year an amount equal to the difference between (a) six (6)
percent of his PSSR compensation disregarding the limits imposed by Section
401(a) (17) of the Code and (b) the eligible employee's actual dollar amount of
basic contributions made to the PSSR for such year. Such deferral elections
shall be (i) conditioned upon and remain effective during the period for which
the eligible employee makes contributions to the PSSR to the maximum permitted
extent including any contribution limitation rules promulgated by the PSSR
administrative committee and (ii) made on a form approved by the Committee and
submitted prior to the beginning of the calendar year of deferral. Such
deferral shall be for a period ending on the earliest of his retirement, death
or termination of employment and, except as provided in Section 4(b) and 6(d)
below, such deferral election may not be revoked or otherwise reduced
retroactively. For Plan Purposes, such deferrals shall be referred to as Excess
401(k) Contributions.
Notwithstanding any other term or provision of this Plan to the contrary, a
Participant may elect an early withdrawal of any or all of his or her Deferred
Account balance; provided, however, that any such withdrawal shall cause
immediate forfeiture of a portion of the Participant's Deferral Account. The
portion of the Deferral Account forfeited pursuant to the preceding sentence
shall equal ten percent (10%) of the total amount the Participant elects to
withdraw early. Such forfeiture shall first be immediately deducted from the
Participant's Account balance (provided there exists sufficient remaining funds
in said account), and/or next from the funds distributed early to the
participant (to the extent not deducted from the Account balance).
(b) Hardship. (i) Upon the request of a Participant, the Committee, in
its sole discretion, upon demonstration of a hardship by the Participant, may
permit modification of a Participant's deferral election to suspend or to reduce
the amount deferred for subsequent periods. Such a request must be submitted in
writing, with evidence of a hardship, to the Committee before March 1 of the
year in which the requested reduction is to take effect. If such a request is
approved by the Committee, it shall be effective for all future periods of
deferral except as provided in (ii) below. A hardship is defined as a
substantial financial need of the participant due to family health, education,
or housing needs.
(ii) A Participant whose deferral has been reduced due to hardship, as
provided in (i) above, may elect, prior to termination of employment, to
increase future deferrals by an amount equal to the difference between the
amount deferred pursuant to the initial unreduced Deferral Agreement and the
amount deferred pursuant to the reduced hardship Deferral Agreement. Such
increase in the amount of future deferrals shall be effective upon approval of
such election by the Committee and shall be effective only as to future
compensation to be earned.
(c) Deferral Election Arrangements. The Committee is authorized to make
any and all necessary arrangements with the Company in order to implement the
Participants deferral elections under Section 4(a).
5. Accounts.
(a) Establishment. The Committee shall establish and maintain a
bookkeeping account ("Account") in the name of each Participant. Each
Participant's Account shall be credited with the deferrals elected by the
Participant (as specified in the Participant's Deferral Agreement) at the time
such compensation would have been paid but for the deferral plus interest at the
applicable interest rate. In addition, each Participant's Account shall be
credited with an amount equal to (a) the difference between his actual allocated
share of the Company's annual profit sharing contribution, if any, under the
Morgan Products Ltd. Profit Sharing and Savings Retirement Plan ("PSSR") and the
amount such share would have been if he had not deferred any compensation under
this Plan, including Excess 401(k) Contributions, or if his annual profit
sharing contribution to the PSSR had not been limited due to the annual
compensation limits for such year imposed by Section 401(A)(17) of the Code, (b)
the amount of Company matching contributions, attributable to his deferrals, he
would have had credited to him under the PSSR if he had not deferred any
compensation under this Plan, other than Excess 401(k) Contributions, (c) the
amount of the Participant's Excess 401(k) Contributions, if any, and (d) an
amount equal to fifty (50) percent of the Participant's Excess 401(k)
Contributions. The amounts referred to in the preceding sentence ("additional
amounts") shall be credited at the time such amounts would have been credited to
him under the PSSR and shall be credited with interest thereafter at the
applicable interest rate. The Participant shall have, from time to time, the
same degree of nonforfeitable interest in the additional amounts (including
interest attributable thereto) as he has in his corresponding accounts under the
PSSR. The Committee shall also establish an Account to be credited with (or
credit to a Participant's existing Account) any payments to the Participant
under the Morgan Products Ltd. Convertible Appreciation Rights Plan which have
been elected for deferral and transfer to this Plan. Each Participant's Account
shall be reduced by any distributions made plus any expenses properly chargeable
to such Account.
(b) Interest. Each Account, until fully distributed, shall be credited
with interest, for each calendar month as of the last day of each month.
Interest will be calculated by applying the Interest Yield to the balance of the
Account on such date, taking into account deferrals and distributions to be
credited or deducted on that date. "Interest Yield" means for each twelve
consecutive calendar months ending after March 1, interest in an amount equal to
the Moody's Long-Term Bond Rate in effect on such March 1 (or the last business
day immediately preceding such date if it is a Saturday, Sunday or holiday)
divided by twelve.
(c) Reports. Following the close of each year, the Committee will
provide statements of Account to each Participant or his Beneficiary.
6. Benefits.
(a) Termination Benefit. Upon a Participant's termination of employment,
for any reason other than death or retirement, the Participant shall be entitled
to receive the amount credited to his Account (excluding any amount in which he
does not have a nonforfeitable interest) as of the last day of the month in
which employment is terminated. Payment of such benefit will be made in a
single lump sum amount within 30 days following the last day of the month of
employment termination.
(b) Pre-Retirement Death Benefit. (i) Upon the death of a Participant
prior to termination of employment and before the commencement of any periodic
payments under the Plan, the Company will pay to the Participant's designated
Beneficiary, as defined in Section 7, a pre-retirement death benefit. In the
case of death other than as a result of suicide, such benefit shall be equal to
the greater of (1) the entire amount credited to the decedent's Account as of
the last day of the month coincident with or immediately preceding the date of
death or (2) the Participant's deferral commitment in effect at the date of
death, as determined by the Committee. If a Participant's death is a result of
suicide, such benefit shall be equal only to the amount specified in clause (1)
in the preceding sentence. For purposes of determining a decedent's Account
balance, hardship distributions, if any, under Section 6(d) and any deferral
transfer from the Morgan Products Ltd. Convertible Appreciation Rights Plan
under Section 5(a) will be taken into account.
(ii) Payment of the pre-retirement death benefit will be made in three
equal annual installments commencing within 30 days of the date of death.
Additional earnings will be credited to the Account of the decedent during the
installment payment period in the same manner as earnings are credited during
the Participant's employment under Section 5(b) above. The Committee reserves
the right to authorize the payment of any pre-retirement death benefit in a
single lump sum form.
(c) Retirement Benefit. If a Participant terminates employment (i) at or
after age 55 with at least 7 years of service or (ii) at or after age 62
regardless of service, such Participant shall be eligible to receive payment of
his entire Account balance in annual installments commencing within 30 days of
the date of such termination of employment, over not more than ten years.
Additional earnings will be credited to the Account during the installment
payment period in the same manner that such earnings are credited while the
Participant is employed by the Company in accordance with Section 5(b). If a
retired Participant dies prior to receiving all payments under the Plan, the
remaining payments (or if the Committee so authorizes the remaining balance in
single lump sum) shall be paid to the Participant's designated Beneficiary, as
defined in Section 7.
(d) Hardship. Upon the request of a Participant or Beneficiary, the
Committee, in its sole discretion, upon demonstration that the Participant or
Beneficiary has suffered a hardship, as defined in Section 4(b)(i), may
distribute to the Participant or Beneficiary that portion of the Participant's
Account balance needed to alleviate the hardship. Such a request must be
submitted to the Committee in writing with evidence of a hardship. All such
determinations of the Committee shall be final and binding on all interested
parties.
7. Beneficiaries.
Each Participant shall from time to time designate one or more persons as
his Beneficiary under the Plan. Such beneficiary designation shall be made in
writing and shall be acknowledged by the Committee. If the designated
Beneficiary dies before receiving all payments due under the Plan, the remaining
payments (or if the Committee so authorizes, the remaining balance in single
lump sum) will be made to the estate of the designated Beneficiary. If the
designated Beneficiary does not survive the Participant, is otherwise
unavailable to receive payment, or if such designation conflicts with law, or no
beneficiary designation is in force when Plan benefits become payable on account
of death, the Beneficiary under this Plan shall be deemed to be the
Participant's surviving spouse, if any, and, if none, his estate.
8. Prohibition Against Funding.
The Company shall not segregate or physically set aside any funds or assets
as a result of the Plan. Should any insurance contract or other investment be
acquired in connection with the liabilities assumed by the Company under this
Plan, it is expressly understood and agreed that the Participants and
Beneficiaries shall not have any right with respect to, or claim against, such
assets nor shall any such purchase be construed to create a trust of any kind or
a fiduciary relationship between the Company and the Participants, their
Beneficiaries or any other person. Any such assets shall be and remain a part
of the general, unpledged, unrestricted assets of the Company, subject to the
claims of its general creditors. Each Participant and Beneficiary shall be
required to look to the provisions of this Plan and to the Company itself for
enforcement of any and all benefits due under this Plan and to the extent any
such person acquires a right to receive payment under this Plan, such right
shall be no greater than the right of any unsecured general creditor of the
Company. The Company shall be designated owner and beneficiary of any insurance
contract acquired in connection with its obligation under this Plan. Each
Participant shall, however, cooperate in any application by the Company for such
insurance including without limitation submitting to a physical examination.
9. Taxes and Expenses.
Any taxes imposed on Plan benefits shall be the sole responsibility of the
Participant or his Beneficiary. The Company shall deduct from Plan benefits any
federal (including FICA), state or local taxes required to be withheld. All
Plan administration expenses incurred by the Company or Committee shall be borne
by the Company. Starting in 1994, the Company shall be entitled to deduct,
either from a deferral under the Plan or any other compensation payable by the
Company to a Participant, any taxes required by law to be withheld.
10. No Assignment.
No benefit or payment under this Plan shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or
charge, whether voluntary or involuntary, and no attempt so to anticipate,
alienate, sell, transfer, assign, pledge, encumber or charge the same, shall be
valid, nor shall any such benefit or payment be in any way liable for or subject
to the debts, contracts, liabilities, engagement or torts of any person entitled
to such benefit or payment, except to such extent as may be required by law. If
any person entitled to a benefit or payment under this Plan becomes bankrupt or
attempts to anticipate, alienate, sell, transfer, assign, pledge, encumber or
charge any benefit or payment under this Plan, in whole or in part, or if any
attempt is made to subject any such benefit or payment, in whole or in part, to
the debts, contracts, liabilities, engagements or torts of the person entitled
to any such benefit or payment, then such payment or benefit, in the discretion
of the Committee shall cease and terminate with respect to such person, and the
Committee, in such case, shall hold or apply the same or any part thereof for
the benefit of any dependent, relative or beneficiary or such person, in such
manner or proportion as the Committee may deem proper.
11. No Employment Rights.
Neither the establishment of this Plan nor Plan participation shall be
construed to confer upon any participant any legal right to be retained in the
employment of the Company or any subsidiary, or give a Participant or
Beneficiary, or any other person, any right to any payment whatsoever, except to
the extent of the benefits provided for hereunder. Each Participant shall
remain subject to discharge to the same extent as if the Plan had never been
adopted.
12. Incompetence.
If the Committee determines that any person to whom a benefit is payable
under this Plan is incompetent or unable to care for his affairs by reason of
age or physical and mental disability, the Committee shall have the power to
cause the payments becoming due to such person to be made to another for his
benefit, without responsibility of the Committee or the Company to see to the
application of such payments. Any payments made pursuant to such power shall,
as to such payment, operate as a complete discharge of the Company.
13. Identity.
If, at any time, any doubt exists as to the identity of any person entitled
to any payment hereunder or the amount or time of or right to such payment, the
Company shall be entitled to hold such sum until such identity or amount or time
or right is determined or until an order of a court of competent jurisdiction is
obtained. The Company shall also be entitled to pay such sum into court in
accordance with the appropriate rules of law.
14. Other Benefits.
The benefits of each Participant or any other person hereunder shall be in
addition to any benefits paid or payable to or on account of the Participant
or such other person under any other pension, disability, annuity or retirement
plan or policy whatsoever. Participation in the Plan shall not reduce any
employee benefit coverage offered by the Company except that, by law, the
amounts deferred shall not be considered as "Compensation" for purposes of any
Company qualified retirement plan.
15. Liability Limitations.
The Company shall be solely responsible for the payment of Plan benefits.
No liability shall attach to or be incurred by any officer or director of the
Company or any member of the Committee under or by reason of the terms,
conditions and provisions contained in this Plan, or for the acts or decisions
taken or made thereunder or in connection therewith; and as a condition
precedent to the establishment of this Plan or the receipt of benefits
thereunder, or both, such liability, if any, is expressly waived and released by
each Participant and by any and all persons claiming under or through any
Participant or any other person. Such waiver and release shall be conclusively
evidenced by any act or participation in or the acceptance of benefits or the
making of any election under this Plan.
16. Amendment and Termination.
The Company shall have the sole authority to amend or terminate this Plan
at any time, without prior notice; provided, however, that any amendment or
termination of this Plan shall not reduce, alter or impair, without the consent
of the Participant or Beneficiary, the right to any payments to which such
person was entitled under this Plan on the day before the effective date of such
amendment or termination.
17. Claims Procedure.
Consistent with the requirements of ERISA and the regulations thereunder of
the Secretary of Labor, the Committee, as the named fiduciary under ERISA for
the review of denied claims shall:
(a) provide adequate notice in writing to any Participant, former
Participant, or Beneficiary (referred to collectively in this Section as
"Participant") whose claim for benefits under the Plan has been denied, setting
forth specific reasons for such denial, written in a manner calculated to be
understood by such Participant, and
(b) afford a reasonable opportunity to any Participant whose claim for
benefits has been denied to a full and fair review of the decision denying the
claim. All decisions of the Committee shall be final and binding on all
interested parties.
18. Governing Law.
Except to the extent this Plan may be subject to ERISA, this Plan shall be
governed by, construed and administered under the laws of the State of Wisconsin
(other than the conflict of laws provisions).
19. Severability.
If any Plan provision or any Deferral Agreement provision of a Participant
is held invalid or unenforceable, such invalidity or unenforceability shall not
effect any other provisions of this Plan, any other Deferral Agreement or
provision, or any other Participant, and this Plan shall be construed and
enforced as if such provision had not been included therein.
20. Binding Agreement.
This Plan (including any Deferral Agreement hereunder) shall be binding
upon the Company and Participants and their respective successors, assigns,
heirs, executors, and beneficiaries.21. Headings.
The article headings contained herein are inserted only as a matter of
convenience and for reference and in no way define, limit, enlarge or describe
the scope or intent of this Plan nor in any way shall they affect this Plan or
the construction of any provisions thereof.
22. Terms.
Capitalized terms shall have meanings as defined herein. Singular nouns
shall be read as plural, masculine pronouns shall be read as feminine, and vice
versa, as appropriate.
APPENDIX
MORGAN PRODUCTS LTD.
DEFERRED COMPENSATION PLAN
Definition-Deferral Commitment
For purpose of determining a pre-retirement death benefit under Section 6
of the Plan, "deferral commitment" shall mean the sum of (a) the Participant's
salary deferral amount projected over the deferral period and (b) the bonus
deferral amount (if any) projected over the deferral period and based on the
Participant's target bonus and salary rate in effect at the time the election to
defer becomes operative. A Participant's "deferral commitment" shall be subject
to adjustment. The salary deferral component of the deferral commitment shall
be adjusted for hardship distributions, if any, and for subsequent reductions or
increases, if any, in the salary deferrals elected by the Participant during the
deferral period. The bonus deferral component of the deferral commitment shall
be adjusted for changes, if any, in the target bonus and for subsequent
increases, if any, in the bonus deferral percentage elected by the Participant
during the deferral period but not for salary increases during the deferral
period.
Exhibit 10.20
TABLE OF CONTENTS
ARTICLE PAGE
I RECOGNITION 1
II UNION SHOP 1
III NON-DISCRIMINATION 2
IV CHECK - OFF 2
V MANAGEMENT 2
VI PLANT VISITATION 3
VII BULLETIN BOARD 3
VIII WAGES 3
IX HOURS OF WORK AND OVERTIME 4
X UNION REPRESENTATION 5
XI GRIEVANCE PROCEDURE AND ARBITRATION 6
XII STRIKES AND LOCKOUTS 7
XIII INSURANCE 7
XIV HOLIDAYS 8
XV VACATIONS 8
XVI SENIORITY 10
XVII MISCELLANEOUS 14
XVIII PENSION PLAN 16
XIX SAFETY & HEALTH 16
XX DURATION 17
SIGNATURES 18
APPENDIX A - HOURLY WAGE RATES 19-20
APPENDIX B - HEALTH PLAN COVERAGE 21-26
APPENDIX C - DENTAL PLAN 27
AGREEMENT
THIS AGREEMENT, entered into the 18th day of February 1995, by and between
MORGAN DISTRIBUTION, "its successors or assign, Mechanicsburg, Pennsylvania,
(hereinafter referred to as the "Company") and the UNITED STEEL WORKERS OF
AMERICA, AFL-CIO-CLC, on behalf of LOCAL #7415 (hereinafter called the "Union").
WITNESSETH:
That in consideration of the mutual and reciprocal promises of the parties
hereto, the parties convenant and agree as follows:
Section 1
PURPOSE:
The purpose of this Agreement is to provide orderly collective bargaining
relations to secure prompt and equitable disposition of grievances, to maintain
a harmonious relationship between the Union and the Company. Further, in such
connection, the Union and the employees pledge their full efforts to cooperate
with the company in the achievement of a high level of efficiency and in
establishing and maintaining sound working practices throughout the Plant.
Section 2
It is agreed that this written contract reflects the entire Agreement between
the parties. Amendments of clarification of this Agreement mutually agreed upon
shall be reduced to writing, attached to, and shall become a part of this
contract.
ARTICLE I - RECOGNITION
Section 1
The Company recognizes the Union as the sole and exclusive Collective Bargaining
Agent for purposes of collective bargaining in regard to wages, hours and other
terms and conditions of employment for all production and maintenance employees
and truck drivers, but excluding all supervisory personnel, office clerical and
guards.
ARTICLE II - UNION SHOP
Section 1
It shall be a condition of employment that all employees of the Company covered
by this Agreement who are members of the Union in good standing on the effective
or execution date of this Agreement, whichever is the later, shall remain
members in good standing and those who are not members on the effective or
execution date of the agreement, whichever is the later shall on the thirtieth
(30th) day following the effective or execution date of this Agreement, whichev-
er is the later, become and remain members in good standing in the Union. It
shall also be a condition of employment that all employees covered by this
Agreement and hired on or after its effective or execution date, whichever is
the later, shall on the thirtieth (30th) day following the beginning of such
employment become and remain members in good standing in the Union.
ARTICLE III - NON-DISCRIMINATION
Section 1
The provisions of this Agreement shall be applied by the Company and the union
without discrimination with regard to age, race, color, creed, sex, handicap,
national origin, or religion, with respect to selection, placement, Union
Membership, training, promotion, wage rates and other conditions of employment.
Wherein the text of this Agreement, words of masculine gender are used, they
shall be interpreted to denote either masculine or female gender.
ARTICLE IV -CHECK-OFF
Section 1
The membership dues, including initiation fees and assessments of United
Steelworkers of America, AFL-CIO-CLC, as authorized and approved by the National
Administrative Officers of the Union shall be checked off the wages of such
employees as file proper assignments with the Company and shall be remitted by
the Company to United Steelworkers of America, AFL-CIO-CLC, c/o Treasurer, Five
Gateway Center - Pittsburgh, Pennsylvania 15222. In the case of the Union's
prescribed initiation fee, the employer shall deduct upon completion of thirty
(30) days and submittal of properly prepared deduction authorization fifty
percent (50%) during the first week following the thirty (30) day period, fifty
percent (50%) during the second week.
Such remittance shall be accompanied by an itemized statement showing the name
of each employee and the amount checked off for dues, initiation fees or
assessment.
Section 2
The Union shall indemnify and save the Company harmless against any and all
claims, demands, suits, or other forms of liability that shall arise out of, or
by reason of action taken or not taken by the company, in reliance upon
authorized cards furnished by the Union to the Company, or for the purpose of
complying with any of the provisions of this Article.
Section 3
Pursuant to the rules and regulations of the United Steelworkers of America,
AFL-CIO-CLC, no assessments may be levied by a local Union against its members
without the approval of the International office of the Union
ARTICLE V - MANAGEMENT
Section 1
The right to hire, promote, transfer, discharge or discipline for just cause,
and to maintain discipline and efficiency of employees, the determination of
type of products to be manufactured, the location of plants, the planning and
scheduling of production, the methods, processes and means of manufacturing are
the sole responsibility and prerogative of the Company, except as otherwise
provided in this agreement.
ARTICLE VI - PLANT VISITATION
Section 1
Authorized representatives of the International Union shall be permitted to
visit the plant or operations of the Company during working hours. The
representative will notify the Company prior to entering the plant or operation,
but such permission will not be granted if such visitation would result in
interference with production in the judgment of the management.
ARTICLE VII - BULLETIN BOARDS
Section 1
The Company agrees to furnish a Bulletin Board located near the time clock for
the use of the Union in posting official union notices restricted to Union
meetings, Union elections, and results, thereof, and the Union's social affairs.
All other notices shall be signed by an official of the Union and be approved by
the Management before posting.
ARTICLE VIII - WAGES
Section 1. Rates of Pay
A wage schedule setting forth the rates of pay of the various classifications
shall be attached hereto and made a part of this Agreement. The wage schedule
shall be known as "Appendix A."
Section 2. New Classifications
In the event the Company installs machinery or equipment or creates jobs
different from those set forth in the Schedule attached hereto, the Company
agrees to meet with the Union in order to classify and set rates to be paid in
connection with said new machinery and equipment or new jobs.
Section 3. Shift Differential
All employees working on the second shift shall be paid twenty-five ($0.25) per
hour in addition to their regular rate. All employees working on the third
shift shall be paid thirty cents ($0.30) per hour in addition to their regular
rate.
Section 4. Call -In Pay
When an employee is called in to work at any time other than his regularly
designated or scheduled shift, he shall be given no less than four (4) hours
work at straight time or, if such work does not extend four (4) hours, he
nevertheless shall be paid for four (4) hours work at straight time.
Section 5. Reporting Pay
Employees ordered to report to work and who do so report, and who are not
offered work shall be paid four (4) hours straight time pay, except where they
cannot be provided with work by reason of bad weather, breakdown of machinery or
other conditions beyond the Company's control. Failure to notify an employee
not to report to work shall be considered as an order to report to work.
The Company will notify employees by local TV. station, Channel 8 and/or radio
station FM-93.5 when above conditions develop which are beyond their control.
Section 6. Temporary Transfer
Any employee may be temporarily transferred to another job without adjustment of
rate but an employee transferred for more than one (1) week will be paid the
rate of the job to which the employee is assigned with such payment being
retroactive to the first hour of the temporary assignment. For purposes of this
Article, one (1) week is as defined in Article IX - Hours of Work and Overtime -
Paragraph 1.
If an employee is transferred to a lower rated job and his rate is reduced in
accordance with the above, such employee upon being returned to his former job
will receive his old job rate immediately.
ARTICLE IX - HOURS OF WORK AND OVERTIME
Section 1
The work week of all employees shall consist of six (6) consecutive work days
beginning at 12:01 a.m. Monday and ending at 12:00 midnight of the next
following Saturday.
Section 2
Eight (8) hours shall constitute a normal day's work and forty (40) hours a
normal week's work. This is not to be construed as a guarantee of hours to be
worked.
Section 3
The Company will not reduce the normal forty (40) hour work week when there are
temporary or probationary employees still working. Such reduction in hours
shall be discussed with the Union in advance and shall be confined to production
or business difficulties that are expected to be short term.
Section 4
All time worked by an hourly paid employee in excess of eight (8) hours in any
work day, or in excess of forty (40) hours in any work week shall be paid for at
the rate of time and one-half.
Section 5
Time and one-half shall be paid for all hours worked on Saturday. If the
employee was off during the work week for personal reasons the time worked on
Saturday equal to the time taken off will be paid at the straight time rate.
Section 6
Double the regular hourly rate shall be paid for all work performed on Sunday or
holidays, except for the regularly scheduled night loading whose work begins or
extends into Sunday or holiday.
Section 7
All work performed on the seventh consecutive day worked in any work week shall
be paid for at double the regular rates of pay. Days on which the employee is
prevented from working by action of the employer, shall be counted as days
worked in determining the sixth and seventh consecutive day. Vacation days
shall be counted as days worked in determining the sixth and seventh consecutive
day.
Section 8
An employee shall not be paid both daily and weekly overtime premium pay for the
same hours worked. Neither shall there be duplication of premium pay for
Sundays and Holidays.
Section 9
The Company will endeavor to divide overtime work, other than in emergencies,
equally among the employees regularly assigned to such work. Employees who
decline voluntary overtime shall have such offered overtime credited as if they
had worked.
Section 10
Employees having worked overtime shall not be required to lay-off to equalize
their overtime compensation.
Section 11
If an employee is absent for three consecutive working days without proper
notification to the management, he shall be subject to discharge unless
satisfactory reason for his absence is given upon his return.
ARTICLE X - UNION REPRESENTATION
Section 1
For purposes of collective bargaining and the orderly processing of grievances
as required by the terms of this agreement the Union shall be represented by
Unit Chairperson, Unit Secretary, and Unit Griever. The Union shall provide the
Company with written current information identifying the Local Committee
members.
Section 2
Members of the Local Committee investigating or adjusting grievances or engaged
in collective bargaining with the Company during their working hours shall be
paid as in the past.
Section 3
Any of the elected union officers when delegated or elected to transact business
on matters pertaining to the Union, locally or nationally, shall be granted a
leave of absence without pay with the provision that such leave shall not
constitute a break in the employee's record of continuous service. Permission
by the Company shall not be unreasonably denied, but the highest degree of
cooperation shall be extended between the parties in the mutual expediting of
work schedules.
ARTICLE XI - GRIEVANCE PROCEDURE AND ARBITRATION
Section 1
Should differences arise between the Company and the Union as to the meaning and
application of this Agreement, there shall be no suspension of work or slowdown
by the employees on account of such differences nor any lockout by the Company,
but an earnest effort shall be made to settle such differences promptly by the
following methods of procedure:
Section 2
First: Between the aggrieved employee and the Supervisor of the Department
involved or a member of management within three (3) days of the event. A Local
Committee member may accompany the aggrieved employee.
Section 3
Second: The Grievance shall be reduced to writing and may be taken up by the
members of the Local Committee, designated by the Union and the Supervisor of
the Department or member of Management.
Section 4
Third: Between the representatives of the International Union, Local Committee
and the Representatives of the executives of the Company. Management decisions
under Grievance procedure outlined in Step 1 above will be made within two (2)
working days after the 1st Step Meeting. The decision of Management at the 2nd
Step and 3rd Step will be made in writing within five (5) working days after the
2nd and 3rd Step Meetings, respectively. In the event the Union fails to appeal
the decision of management within five (5) working days from the date of receipt
of such decision in any one of these steps, a Grievance shall be considered as
settled on the basis of the company's answer.
Section 5
Fourth: In the event the dispute shall have not been satisfactorily adjusted
within ten (10) working days after the Step 3 Meeting, the matter may be
submitted upon the written request of either party to an Arbitrator selected
through the Mediation and Conciliation Service of the United States or the
American Arbitration Association.
Section 6
Fifth: Arbitrator: The Union shall have the right to refer to an Arbitrator
any difference, grievance, or dispute involving the interpretation and
application of this Agreement which has not been satisfactorily adjusted by
means of the foregoing procedure.
The authority of any Arbitrator under this Article shall be confined to a
determination of the rights the parties have or do not have by virtue of this
Agreement and no Arbitrator shall have a right to add to or to take from or in
any manner alter or change the terms of this Agreement.
The Arbitrator must be present to act upon any matter submitted for arbitration;
the Arbitrator shall render his award in writing within thirty (30) days from
the date on which the difference, grievance or dispute is referred to it. His
decision shall be final and binding upon each of the parties hereto.
The expenses of the Arbitrator shall be borne and paid equally by the Union and
the Company.
ARTICLE XII - STRIKES AND LOCKOUTS
Section 1
The Union will not authorize, instigate, condone or permit any strike of any
kind, boycott, work stoppage, slowdown, interruption or impediment of production
or any other type of interference with the Company's business or curtailment of
work during the life of the Agreement. In the event of such a work stoppage,
strike, boycott, picketing, or other curtailment, the Union shall immediately
instruct the involved employees in writing that the conduct is in violation of
this Agreement, that they may be disciplined up to and including discharge and
direct all such persons to cease the offending conduct.
All disputes or differences shall be taken up under the Grievance and
Arbitration procedure of this Agreement.The Company agrees that there shall be
no lockouts during the term of this Agreement
ARTICLE XIII - INSURANCE
Section 1. Life Insurance
The Company shall furnish life insurance and accidental death and dismemberment
insurance to all employees in the bargaining unit in the amount of:
Effective February 19, 1996 $16,000
Effective February 19, 1997 $17,000
Accidental Death and Dismemberment is double the above amounts.
Employees have the option of purchasing supplemental life insurance in a like
amount of Basic and AD & D at $0.24/$1,000/month ($3.60/month 2/19/95,
$3.84/month 2/19/96 and $4.08/month 2/19/97.
Section 2. Accidental/Sickness Benefits
The Company shall furnish accident and health insurance which shall pay to the
employee, the eighth (8th) day of sickness and from the first (1st) day of off
the premises accident of hospitalization, the sum of Two Hundred Five ($205.00)
dollars per week for a period of twenty-six (26) weeks. Two Hundred Ten
($210.00) dollars per week for a period of twenty-six weeks effective February
19, 1996 and Two Hundred Fifteen ($215.00) dollars per week for a period of
twenty-six (26) weeks effective February 19, 1997. This benefit includes truck
drivers, warehouse and shop employees.
Section 3
(a) The Company and the Union have agreed to a program of benefits for
employees in the bargaining unit represented by the Union and covered by this
Agreement.
(b) The insurance program for the employees and their dependents as set forth
in Appendix "B" and "C" attached shall be continued for the life of this
Agreement.
(c) The Company shall provide for the employees in the Unit Medical Insurance
at the Company's expense for the employees only, and shall make available to the
employees, Medical Insurance coverage for the employee's dependents with the
employee contributing to the premium. (See Appendix "B")
ARTICLE XIV - HOLIDAYS
Section 1
Employees shall be paid double time plus straight time for all work performed on
the following holidays: (1) New Year's Day, (2) Memorial Day, (3) Independence
Day, (4) Labor Day, (5) Thanksgiving Day, (6) Christmas Day, (7) the Day prior
to Christmas Day, (8) Good Friday, (9) the first day of deer hunting season,
(10) the employee's birthday. Each such holiday shall be deemed to start at
12:01 AM on the holiday itself, and to end at 12:00 midnight on the same day.
If a holiday falls on a Saturday, it shall be observed on the preceding Friday.
If a holiday falls on a Sunday, it shall be observed on the following Monday.
When employees are not scheduled to work by the Company on any of the
above-mentioned holidays, they shall be paid for that day at their regular rates
(eight (8) hours at their base pay), and this day shall be computed as a day's
work for the computation of the sixth and seventh days worked in any work week.
If a holiday falls during a vacation week, the employee is entitled to the
holiday and shall be paid for the holiday at his regular rate (eight (8) hours
times base pay) in addition to the vacation pay to which he is entitled.
Section 2
Any employee who has completed his probationary period and who has worked his
last scheduled work day preceding and his first scheduled work day succeeding
the holiday shall be entitled to holiday pay for such holiday even though no
work is performed. The requirement that employees work the day before and the
day after the holiday shall be without exception unless excused by the Company
for good cause shown.
ARTICLE XV - VACATIONS
1. Vacations:
a.) All employees who have been continuously in the employ of the Company
for one (1) year but less than four (4) years as of December 31st,
shall be granted a paid vacation of one (1) week and shall receive as
vacation pay, 2% of W-2 earnings excluding premium dollars for the
period, January 1st through December 31st of the prior year. (Minimum
of forty (40) hours vacation pay at the employee's regular
straight-time hourly wage rate.)
b) All employees who have been continuously in the employ of the Company
for four (4) years but less than eight (8) years as of December 31st,
shall be granted a paid vacation of (2) weeks and shall receive as
vacation pay, 4% of W-2 earnings excluding premium dollars for the
period, January 1st through December 31st of the prior year (Minimum
of eighty (80) hours vacation pay at the employee's regular
straight-time hourly wage rate.)
c) All employees who have been continuously in the employ of the Company
for eight (8) years but less than (19) years as of December 31st,
shall be granted a paid vacation of three (3) weeks and shall receive
as vacation pay, 6% of W-2 earnings excluding premium dollars for the
period January 1st through December 31st of the prior year. (Minimum
of one-hundred twenty (120) hours vacation pay at the employee's
regular straight-time hourly wage rate.)
d) All employees who have been continuously in the employ of the Company
for nineteen (19) years or more as of December 31st, shall be granted
a paid vacation of four (4) weeks and shall receive as vacation pay,
8% of W-2 earnings excluding premium dollars for the period January
1st through December 31st of the prior year. (Minimum of one-hundred
sixty (160) hours vacation pay at the employee's regular straight-time
hourly wage rate.)
e) An employee with less than one (1) year of service on January 1st of
the current year but who has actually been at work at some time during
the current vacation period shall be eligible for vacation days as
follows:
Number of Paid
Month of Hire Vacation Days
January 5
February 5
March/April 4
May 3
June 3
July 3
August 2
September 2
October 1
November 1
December 0
Vacation entitlement days under this schedule are not earned nor can
they be taken until after January 1 of the calendar year following
an employee's date of hire.
f) Holiday and vacation hours for which the employees have been paid
shall be counted in computing hours worked in any year. No employee
will receive less than forty (40) hours of vacation pay provided the
employee has worked a minimum of forty (40) weeks for the period
between January 1st through December 31st of the prior year.
Section 2
2. All paid vacations shall be granted during the months January to December
inclusive, in the calendar year in which such vacation is earned unless
otherwise agreed by the Company and the individual employee. Employees
entitled to three (3) weeks or more of vacation shall be required to take
one (1) week of such vacation during the months from December to March.
Section 3
3. Any employee deemed necessary in the operations of the plant, may by mutual
agreement between the employee and the Company, forego his vacation and in
such event, he shall be paid his vacation pay in addition to the pay earned
during the week.
Section 4
(a) All vacations shall be approved in advance by the Company. A schedule
for showing vacation preference shall be posted by the Company by
January 1st. Employees who have expressed their preference for
vacation weeks by the preceding December 22nd shall receive first
consideration; in the event of conflict of preferences, the desires of
the senior employee of employees shall prevail. In all cases,
scheduling of vacations is subject to the requirements for efficiency
of operation.
(b) Employees will have the right to schedule up to five (5) day-at-a-time
vacation days provided they have advanced approval. Additional
day-at-a-time vacation can also be taken with advanced approval,
provided production efficiencies allow.
(c) Single days of vacation may be taken on a sick day provided each such
day taken is approved by the Plant Superintendent or his designee.
(d) Employees with two (2) or more weeks vacation eligibility must
schedule a minimum of one (1) week vacation to be taken in five (5)
consecutive days.
(e) The Company shall determine the number of employees working in each
department who will be permitted to be on vacation during a given work
week.
Article XVI - SENIORITY
Section 1
The Company recognized the principle of seniority, namely, employees having the
greatest time of service in the employment of the Company shall have preference
for advancement, retaining and regaining employment in case of curtailment or
expansion of operations subject to the individual qualifications of the
employees.
Section 2. Lay-Off Recall
(a) Layoffs will be made by inverse order of plant-wide seniority provided
those employees retained have the necessary qualifications to perform
the available work.
(b) Employees will be recalled to work in order of seniority except as
follows:
(1) Deviations from recall by seniority can be made by the Company
only where a junior laid-off employee is qualified for the
available work and no employee on lay-off with more seniority is
qualified to perform the available work.
Section 3
It is understood and agreed that in all cases of promotion, increase or decrease
of personnel or recall after lay-off, seniority shall be determined by
consideration of the following factors:
(a) Ability, efficiency, and qualifications of employee for available work
with the Company.
(b) Physical Fitness.
(c) Length of continuous service.
(d) In considering the availability and qualifications of employees
considered for promotions, no weight will be given to work performed
in the job in which the vacancy occurs to any junior employee for
experience gained in that job while temporarily employed in it.
Where factors (a) and (b) are relatively equal, (c) length of service with the
Company shall govern. Management shall be the judge of the employee's ability.
Any disagreement with the judgment of the Company shall be subject to the
Grievance Procedure.
Section 4
Employees who are laid off for lack of work shall be advised as soon as the
Company is aware of intent to do so.
When employees are called to work or laid off the members of the Local Committee
shall be given the names and order of layoff or recall.
Section 5 Bidding Procedure
(a) The Company agrees to establish a Bidding Procedure whereby an
employee may submit a bid request in writing to a position outside his
present job classification or department.
(1) Window Shop
(2) Steel Door Shop
(3) Wood Door Shop
(4) Warehouse
(5) Truck Drivers
It is understood and agreed that an employee may submit bids on more than
one job classification.
(b) When a position opens, the Company will select an employee to fill
said opening from the submitted bid requests according to the factors outlined
in Section 5, Article XVI - "Seniority".
(c) If an employee is selected to fill an opening and refuses, said
employee is not eligible to apply for any other opening for a period
of six (6) months.
(d) Also, successful transferred employees may not apply for another
transfer for a period of twelve (12) months unless agreed to by the
Company.
(e) If a position opens within a job classification in which no one has
submitted a bid, or in the case of the tractor/trailer position, no
one possesses the required qualifications, the Company may hire from
the outside.
(f) The above procedure does not apply to the lead person classification
whereby the Company has the sole right of selection. If the number of
lead positions exceeds five (5), the Company will discuss the matter
with the Union.
(g) Present employees will be given the opportunity to fill job vacancies
created by the job bid before new employees are hired.
(h) In the case of a job bid the employee shall have a qualifying work
period as follows:
Minimum Maximum
Warehouse and Shop
Position - 5 actual work days 15 actual work days
Lead Person and
Warehouse Leaders 20 actual work days 60 actual work days
The above times may be extended by mutual consent
Section 6 Loss of Seniority
An employee shall lose his seniority and will be taken off the seniority list
if:
1. He quits.
2. He is discharged for cause.
3. Absence from work due to lay off or absence due to bonafide injury or
illness non work related which renders the employee incapable to work
shall retain seniority if the employee returns to work within thirty
consecutive months after the absence commenced or within a period
equal to their seniority which they had when the absence commenced
whichever is shorter.
4. He fails to return to work within three (3) working days after being
notified to return to work and does not give satisfactory reason for
such failure to report.
5. Absence exceeding the period for which a leave of absence has been
granted or extended unless the employee's excuse is satisfactory to
the Company.
6. Absence for three (3) consecutive scheduled working days without prior
notice to the Company.
7. Acceptance of other employment while on leave of absence unless agreed
to in writing by the company.
8. Retirement.
Section 7
Employees may be recalled from lay-off by telephone if mutually agreed to
between the Company and the Union. If an employee is recalled by telephone, a
certified or registered letter will be sent to the last known address furnished
to the Company by said employee. Employee must respond to the Company's notice
within three (3) days from date of mailing unless they are unable to for reasons
beyond their control, it being understood that the laid off employees shall keep
themselves available for recall by the Company.
(1.) Employee must report for work within ten (10) calendar days of mailing
unless other-wise mutually agreed to or beyond the control of the
employee.
(2.) In the event the employee fails to comply with the above listed steps,
the employee shall lose all seniority rights under this Agreement.
(3.) The Company has the right to utilize the next senior laid off employee
during the time period between notifying (phone or mailing) the senior
laid-off employee of recall and their actual reporting date.
(4.) The employee shall be required to furnish the Employer with a current
phone number (if employee has a phone and a current address.)
(5.) The right of an employee to recall shall lapse after thirty (30)
months from the date of lay-off.
Section 8. Seniority Lists
" A copy of an up-to-date seniority list shall be given to the local Union every
six (6) months or twice a year."
Section 9. Warehouse Temperature
The Company agrees to maintain the heat in the warehouse during the cold months
at a minimum of fifty (50) degrees F.
ARTICLE XVII - MISCELLANEOUS
Section 1. Funeral Leave
In case of death in the immediate family of an employee, such employee shall be
given a three (3) day leave of absence to start on such day of death or on the
day following such death as the employee may request. If such leave of absence
is a day or days on which such employee was scheduled to work (or but for the
leave of absence would normally have scheduled to work) at straight time pay,
then such employee, up to said maximum of three (3) days shall be paid eight
hours straight time for work so missed. Hours so paid for while on such leave
of absence shall count as hours worked for purpose of compiling overtime pay.
The phrase "immediate family" as used in this section means and includes the
spouse, parents, children, brother, sister, mother-in-law, father-in-law, step
brother and step sister of the employee.
In the event of a death other than the immediate family (grandparents,
brother-in-laws or sister-in-laws ) the employee shall be given eight (8) hours
of pay to attend the funeral if the funeral falls on a scheduled work day.
Section 2. Legality
In the event that any provision of this Agreement shall at any time be declared
invalid by any court of competent jurisdiction, the decision shall not
invalidate the entire agreement, it being the express intention of the parties
that all other provisions shall remain in full force and effect.
Section 3. Uniforms
The Company agrees to supply three (3) winter uniforms and three (3) summer
uniforms to all newly hired drivers but in any subsequent years drivers will
receive two (2) sets each of summer and winter uniforms consisting of two (2)
shirts and three (3) pair of trousers. However, if the Company changes the
uniform color for the initial year of the change only, each driver will receive
(3) sets of each summer and winter uniforms.
Section 4. Military Leave
Military leave of absence will be handled in accordance with applicable
governmental regulations.
Section 5. Credit Union
Credit Union payroll deduction program will be made available to all Local Unit
Members.
Section 6. Disciplinary Action
Any disciplinary warnings or suspensions shall not remain in effect for more
than twelve (12) months against their record.
Section 7. Safety Shoes
Beginning in 1995, employees will be reimbursed up to sixty (60) dollars per
year for safety shoes (receipt required.)
Section 8. Safety Glasses
Upon presentation of lens prescription employees will be reimbursed 100% for
their first pair of approved safety frames and lenses. Reimbursement for
replacement units will be at 50% after the initial purchase. Approved safety
frames and lens are defined as safety glasses that meet the ANSI Standard
287.1-1968 and are approved by the Company. Maximum cost of the glasses will
not exceed $150.00 per set of frames and lens.
Section 9. Temporary and Part time Employees
A. Summer Temporary Employees:
1. Will be paid in accordance with Appendix - "A" Paragraph 1 (d).
2. Will be employed between June 1st and September 30th of any given
year.
3. Will not be eligible for benefits provided by the Agreement including,
holidays, vacation and, insurance except where required by law, nor
will such employees have any rights or protection under Article XVI.
4. Will be required to join the Union in accordance with the provisions
of Article II.
5. Will not be assigned to a truck driver classification.
6. Will be eligible for departmental overtime only after all regular full
time department employees have been given the opportunity to work the
required overtime.
7. Will not be eligible for safety awards nor will their accident record,
if any, nullify the record of regular full-time employees.
8. No summer temporary employees will be hired if there are regular
permanent employees on layoff.
B. Regular Temporary Employees
1. Will be paid in accordance with the hourly wage rate progression
schedules outlined in Appendix "A"
2. Will not be eligible for benefits provided by the Agreement including
holiday's, vacation and insurance except where required by law, nor
will such employee have any rights or protection under Article XVI.
3. Will be required to join the Union in accordance with the provisions
of Article II.
4. Will not be assigned to a truck drivers classification except where
the parties mutually agree to do so.
5. Will be eligible for departmental overtime only after all regular
full-time department employees have been given the opportunity to work
the required overtime. However, qualified employees outside the
department who wish to work weekend overtime that would normally be
worked by the temporary employee, will be eligible to work provided
they notify the department supervisor of their desire at the start of
the work week.
6. Will not be eligible for safety awards nor will their accident record,
if any, nullify the record of regular full-time employees.
7. Will not exceed 15% of the workforce except by the mutual agreement of
the parties.
C. No temporary employees will be hired or retained if there are regular
permanent employees on layoff.
ARTICLE XVIII - PENSION PLANSection 1
The Company shall continue in effect a program of pension benefits at the rate
of:
(a) Nineteen Dollars ($19.00) per year of credited service effective February
19,1995. (Per month for each year of service.)
(b) Twenty Dollars ($20.00) per year of credited service effective February
19,1996. (Per month for each year of service.)
Disability Retirement - 10 years of service with no age requirement.
ARTICLE XIX - SAFETY & HEALTH
The Company and the Union will cooperate in the continuing objective to
eliminate accidents and health hazards.
The Company will establish a Safety Committee consisting of both Union and
Company personnel who will conduct a regularly scheduled plant inspection not
less than once a month.
Copies of the completed Worker's Compensation forms involving fatalities or
disabling injuries shall be granted by the Company upon request to the Unit
Chairperson of the Local Union.
All new employees shall be given orientations to the Company Safety and Health
Program.
ARTICLE XX - DURATION
This Agreement shall become effective on the 19th day of February 1995, and
shall remain in full force and effect to and including the 19th day of February
1998, and shall continue in full force from year to year thereafter unless
either party to this Agreement desires to change or modify any of the terms or
provisions of this Agreement. The party desiring the change or modification
must notify the other party to this Agreement in writing not less than sixty
(60) days prior to any subsequent anniversary hereof. Should either party to
this Agreement serve such notice upon the other party, a joint conference of the
Company and the Union shall commence not later than thirty (30) days prior to
the expiration date in the year in which the notice is given.
IN WITNESS WHEREOF, The parties hereto have caused this Agreement to be signed
by their duly authorized representatives as of the day and year first above
written.
UNITED STEELWORKERS OF AMERICA
AFL-CIO-CLC MORGAN DISTRIBUTION
[5 signatures ________________________
George Becker D.C. Hood
Vice President Human Resources
Leo W. Gerard
________________________
Richard H. Smith C. J. Williams
Director of Human Resources
Leon Leonard
Andrew V. Palmer] _________________________
C.J. Traxler
Vice President-Eastern Region
________________________________
Joseph B. Pozza, III
Staff Representative
NEGOTIATING COMMITTEE:
________________________________
Gary Mowery
Stephen A. Haas
Scott Musser
APPENDIX A
HOURLY WAGE RATES
1. This appendix represents the hourly wage rates for employees included in
the classifications listed below.
A. Effective February 19, 1995
Length of
Employment Shop Truck T/Trailer
(Months) Mechanic Warehouse Driver Driver
0 - 6 8.50 8.50 8.78 9.02
6 - 12 9.04 9.04 9.33 9.59
12 - 18 9.57 9.57 9.41 10.15
18 - 24 10.10 10.10 10.43 10.72
24 + 10.93 10.93 11.28 11.58
An employee hired prior to February 18, 1995 who is still in progression will
receive $0.30 per hour in addition to the rate of his progression step until he
reaches the 24 month maximum rate.
B. Effective February 19, 1996 (New Hire Hourly Rate)
Length of
Employment Shop Truck T/Trailer
(Months) Mechanic Warehouse Driver Driver
0 - 6 (80%) 8.50 8.50 8.78 9.02
6 - 12 (85%) 9.04 9.04 9.33 9.59
12 - 18 (90%) 9.57 9.57 9.41 10.15
18 - 24 (95%) 10.10 10.10 10.43 10.72
24 + (100%) 11.18 11.18 11.53 11.83
An employee hired prior to February 18, 1995 who is still in progression will
receive $0.55 per hour in addition to the rate of his progression step until he
reaches the 24 month maximum rate.
C. Effective February 17, 1997 (New Hire Hourly Rate)
Length of
Employment Shop Truck T/Trailer
(Months) Mechanic Warehouse Driver Driver
0 - 6 8.50 8.50 8.78 9.02
6 - 12 9.04 9.04 9.33 9.59
12 - 18 9.57 9.57 9.41 10.15
18 - 24 10.10 10.10 10.43 10.72
24 + 11.43 11.43 11.78 12.08
D. Summer Temporary Employee Hourly Wage Rate = $7.60 per hour
2. The Lead Persons will receive an additional $0.40 per hour over the
applicable Job Rate. This is a Lead Person doing productive work.
3. Warehouse Leaders (who handle tickets) will receive an additional $0.30 per
hour over the warehouse rate.
4. If employees are unable to work as a result of an "on the job" lost time
injury certified by a licensed physician, they will receive their regular
base daily pay for a maximum of five (5) days in any one calendar year,
minus whatever payment may be made from worker's Compensation by applicable
law.
5. Road drivers on overnight trips will be allowed three (3) meals which must
be taken forty (40) miles from the Plant.
6. An employee who is assigned to the nightshift and is responsible for the
positioning of tractor/trailers in the parking lot to facilitate loading
will be entitled to a $0.25 per hour addition to his regular hourly wage
rate.
COMPARISON OF BENEFITS FOR THE EMPLOYEES OF
MORGAN PRODUCTS - MECHANICSBURG HOURLY
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COVERAGE PROVISIONS MORGAN HEALTH PLAN J HEALTH AMERICA
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* How are benefits covered? Free choice of providers. All services must be
100% coverage with no provided by your
deductible for certain affiliated HealthAmerica
benefits noted below per provider (see Referrals).
calendar year. Can self refer to
gynecologist for annual
exam.
* Maximum Lifetime Coverage - $ 550,000 Refer to specific
- $ 650,000 after 1/1/96 benefits for dollar and
With $ 4,000 per year day limitations.
reinstatement.
* Deductibles/Copayments - $ 250 Individual See Prescription Drugs,
- $ 450 Family Family Planning, and
per calendar year Emergency Care.
* Copayments/% Charges Covered - 80% of the first $4,500 - 100% coverage except
Individual, 100% where minimal Copayments
thereafter. are indicated.
- 80% of the first $9,000
Family, 100% thereafter.
* Out-of-Pocket Maximum - $ 1,150 Individual
- $ 2,250 Family
* Coordination of Benefits See Footnote 5, Page 6 See Footnote 5, Page 6
COVERAGE PROVISIONS MORGAN HEALTH PLAN J HEALTH AMERICA
* Employee Weekly Contributions Eff. Date Single Family Eff. Date Single Family
1/1/95 $ 2.25 $ 5.45 1/1/95 $ 1.73 $ 12.47
NOTE: Employees Contributions 2/18/95 $ 3.25 $ 7.00 2/18/95 $ 6.25 $ 14.50
will be made on 2/18/96 $ 4.00 $ 8.25 2/18/96 $ 7.00 $ 15.75
pretax dollars 2/18/97 $ 4.75 $ 9.50 2/18/97 $ 7.75 $ 17.00
* WHAT IS COVERED? ALL ELIGIBLE CHARGES MUST BE DEEMED MEDICALLY NECESSARY
* Hospital Services
Room Accommodations and After deductible, 80% 100% semi-private,
Miscellaneous copayment to the out-of intensive care and pocket
maximum for semi- coronary care.
private, coronary care and
intensive care. (See
Footnotes 1 and 2, Page 6)
* EMERGENCY CARE
Local First $300 for accidental Covered for life
injury covered in full, threatening emergencies,
then after deductible, emergency room $25
80% copayment to the copayment unless
out-of-pocket maximum. admitted.
Services must be rendered
within 31 days of accident.
Out-of-Service Area Same as Local Emergency Covered when medically
Care. necessary, $25 copayment
for emergency room unless
admitted.
COVERAGE PROVISIONS MORGAN HEALTH PLAN J HEALTH AMERICA
Ambulance Same as Local Emergency 100% coverage.
Care
* DOCTOR'S SERVICES
Surgery/Anesthesia - Inpatient: After 100% coverage.
deductible, 80% copayment
to the out-of-pocket maximum.
- Outpatient: 100% coverage
(See Footnotes 1 and 2, Page 6)
Doctor's In-Hospital Visit After deductible, 80% 100% coverage
copayment to the out-of-
pocket maximum. (See
Footnotes 1 and 2, Page 6)
Consultation - Inpatient After deductible, 80% 100% coverage
copayment to the out-of-
pocket maximum. (See
Footnotes 1 and 2, Page 6)
Maternity Care After deductible, 80% 100% coverage
copayment to the out-of-
pocket maximum. (See
Footnotes 1 and 2, Page 6)
COVERAGE PROVISIONS MORGAN HEALTH PLAN J HEALTH AMERICA
Diagnostic X-Ray/Lab After deductible, 80% 100% coverage
copayment to the out-of-
pocket maximum. Pre-
admission testing covered at
100%. (See Footnotes 1 and
2, Page 6)
Office Visits After deductible, 80% 100% coverage after
copayment to the out-of- $10 copayment.
pocket maximum. (See
Footnotes 1 and 2, Page 6)
Immunizations No coverage. 100% coverage.
Well Baby Care No coverage. 100% coverage.
Selected Oral Surgery After deductible, 80% No coverage.
copayment to the out-of-
pocket maximum for specific
procedures. (See Footnotes 1
and 2, Page 6)
Allergy Testing/Treatment After deductible, 80% 100% coverage, No
copayment to the out-of- coverage for serum.
pocket maximum.
Routine Physical Exams NO coverage. 100% coverage.
(No Third Party Exams)
Routine Mammogram No coverage. 100% coverage with
referral.
COVERAGE PROVISIONS MORGAN HEALTH PLAN J HEALTH AMERICA
Routine Pap Test 100% coverage, not subject 100% coverage.
to deductible, 1 exam
covered annually.
Prescriptions - Generic - 100% Subject to $10 copayment
per prescription, Must
- Legend - After deductible, be filled by
80% copayment to the out- participating pharmacy.
of-pocket maximum. Generic drugs will be
substituted when
available.
Vision Care No routine coverage. 100% coverage for annual
exam and refractions. No
coverage for lenses and
frames.
Hearing Aids & Exams No coverage. 100% coverage for exam.
No coverage for hearing
aid device.
* DURABLE MEDICAL EQUIPMENT
Ancillary Materials and After deductible, 80% Durable medical equipment
Devices copayment to the out-of- covered 100% when
pocket maximum. medically necessary.
Prosthetics/Orthotics
covered for initial only,
replacement limited to
once every 2 years as
required due to normal
wear or change in
condition.
COVERAGE PROVISIONS MORGAN HEALTH PLAN J HEALTH AMERICA
* NERVOUS AND MENTAL
Inpatient After deductible, 80% Up to 30 days per
copayment to the Out-of- contract year for short
pocket maximum, to $7,000 term treatment and crisis
covered per calendar year. intervention covered
Lifetime maximum of 100%.
$20,000, 2 inpatient
confinements per lifetime.
(See Footnotes 1 and 2, Page 6)
Outpatient After deductible, 80% Up to 20 visits per
copayment to the Out-of- contract year for short
pocket maximum, to $7,000 term therapy and crisis
covered per calendar year. intervention. $25 for
Lifetime maximum of visits 1 to 20.
$20,000, 2 inpatient and
outpatient maximums are
combine.
* DRUG ABUSE AND ALCOHOLISM
Inpatient Same as Nervous and Mental - Alcohol: 30 days per
Care-Inpatient. Benefit contract year (90 day
Maximums are combined. lifetime maximum.)
- Substance Abuse: See
Mental Health.
Outpatient Same as Nervous and Mental - Alcohol: 60 days per
Care-Inpatient. Benefit contract year (120 day
Maximums are combined. lifetime maximum.)
- Substance Abuse: See
Mental Health.
COVERAGE PROVISIONS MORGAN HEALTH PLAN J HEALTH AMERICA
* CHIROPRACTOR After Deductible, 80% No coverage except for as
copayment to the out-of- a benefit of physical
pocket maximum. Coverage therapy in the case of
only for the treatment of illness or injury
a sickness or injury. (referral necessary).
See Physical Therapy.
* SKILLED NURSING CARE
Skilled Nursing Home (not for 100% coverage. No more 100 days per contract
Custodial or Domiciliary Care) than half of the semi- year covered at 100%.
(State Licensed) private room rate. (See
Footnote 3, Page 6)
* HOME HEALTH SERVICES
Part-Time Nursing 100% coverage. 100% coverage when
medically necessary.
Physical Therapy/Speech Therapy, 100% coverage. 100% coverage for 60
Medical Social Services and consecutive days, or 15
Home Health Aids sessions, whichever is
greater from initiation
of treatment per
condition.
* BIRTH CONTROL DEVICES Birth control pills are Tubal Ligation and
covered the same as vasectomies covered
prescription drugs. Tubal subject to Copayments.
ligations and vasectomies Oral contraceptives
are covered, after covered under
deductible, 80% copayment prescription drug
to the out-of-pocket maximum. benefit.
COVERAGE PROVISIONS MORGAN HEALTH PLAN J HEALTH AMERICA
Infertility After deductible, 80% Infertility counseling
copayment to the out-of- and testing (excluding
pocket maximum. Treatment vitro fertilization) -
for infertility is covered $300 copay per course of
based on medical necessity. treatment, $2,500
Charges for impregnation lifetime maximum.
are not covered.
* HEALTH PROMOTION PROGRAM
Physical Fitness and No coverage. 100% coverage for
Lifestyle Awareness specified health and
wellness programs.
(Weight Watchers
reimbursement up to $150
per calendar year.)
* DEPENDENT COVERAGE Unmarried children to age Unmarried children to age
19, or until age 25 if 19, or until age 25 if
full-time student and full-time student and
dependent upon employee dependent upon employee
for support. for support.
* REFERRALS None required. Referral must be received
before non-emergency care
is provided by other than
your primary care
provider.
DENTAL PLAN Dental Plan B. Dental Plan A.
</TABLE>
APPENDIX C
MORGAN PRODUCTS LTD.
SUMMARY* OF DENTAL PLANS
<TABLE>
<CAPTION>
BENEFIT PLAN A PLAN B
<S> <C> <C>
Class 1 - Preventive Services:
Oral Examinations, X-rays, 100% 100%
Cleaning, Space Maintainers
Fluoride and Sealants 100% None
(Dependent Children to age 19)
Class 2 - Basic Services:
Emergency Treatment, 80% 80%
Endodontics, Periodontics, Oral Surgery,
Local Anesthesia, Extractions, Restorative
Treatment: Amalgam, Silicate, and Acrylic
Fillings, and Stainless Steel Crowns
Class 3 - Major Services:
Gold Foil Fillings, Inlays and 50% 50%
Onlays, Crowns
Class 4 - Prosthodontics Services:
Removable or Fixed Bridgework, 50% 50%
Partial or Complete Dentures
Class 5 - Orthodontic Services:
Teeth Straightening Procedures 50% 50%
(Dependent Children to age 19)
DEDUCTIBLE
(Applies to Class 2, Individual - $35 Individual - $35
3 and 4 only) Family - $70 Family - $70
Annual Non-Orthodontic Maximum $1,000 $1,000
Lifetime Orthodontic Maximum $1,000 $ 500
* This is intended to be a summary. Details regarding your dental benefits
can be found in your benefit binder.
* FOOTNOTES:
1. Pre-certification is required 7 days before any non-emergency surgery or
inpatient admission. Emergency admissions must be certified within 24
hours or the first business day following admission. Failure to
pre-certify will result in eligible charges payable at 50% copayment
subject to your deductible, and a maximum out-of-pocket penalty of
$1,000 per occurrence. The 50% copayment is not applied to your
out-of-pocket.
2. Bill Audit Program pays employee 50% of any billing errors to a maximum of
$500.
3. Please refer to PLAN BOOKLET for additional resources.
4. Generic Rx, Pre-admission testing, outpatient surgical expense, second
surgical opinion, birthing center, home health care, hospice and skilled
nursing facility covered at 100%, no deductible.
5. Coordination of Benefits:
Morgan Health Plan J and HealthAmerica:
Benefits will be reduced under certain circumstances when you are
covered both under this Plan, as described, and other plans
which provide similar benefits. Reimbursement will not exceed 100% of
the total allowable expenses incurred under the Plan and
other plans included under the provision.
6. HealthAmerica HMO benefits are subject to change in 1996 and later years,
in accordance with negotiations between the company and the HMO.
This constitutes only a summary of the health plan involved. The actual
contract or plan document of each health plan must be consulted to determine
the governing contractual provisions, limitations, or exclusions. There is
no guarantee, expressed or implied by Morgan Products or Don F. Jabas Associates
of HMO Benefits, plan provisions, or level of payments. This comparison was
prepared in cooperation with and with the approval of each insurance carrier.
</TABLE>
Exhibit 10.21
AGREEMENT
between
MORGAN DISTRIBUTION
A Division of Morgan Products Ltd.
and
TEAMSTERS LOCAL UNION 541
affiliated with the
INTERNATIONAL BROTHERHOOD OF TEAMSTERS
April 1, 1995 to March 31, 1998
AGREEMENT
This Agreement is made and entered into this 1st day of April, 1995, by and
between MORGAN DISTRIBUTION, A Division of Morgan Products Ltd., hereinafter
known as the "Employer", and BUILDING MATERIAL, EXCAVATING, HEAVY HAULERS,
DRIVERS, HELPERS & WAREHOUSEMEN, LOCAL UNION NO. 541, Kansas City, Missouri,
affiliated with the International Brotherhood of Teamsters, Chauffeurs,
Warehousemen and Helpers of America, hereinafter known as "Union".
ARTICLE I
DECLARATION OF PRINCIPLES
That there shall be no limitation as to the amount of work a person shall
perform during his working day.
That there shall be no restriction in the use of machinery or tools.
That no person shall have the right to interfere with workmen during
working hours.
That the Employer is at liberty to employ whomsoever it sees fit.
ARTICLE II
UNION SECURITY
1. All present employees who are members of the Union on the effective
date of this Article shall remain members of the Union in good standing as a
condition of employment. All present employees who are not members of the Union
and all employees who are hired hereafter shall become and remain members in
good standing of the Union as a condition of employment on and after the 31st
day following the date the employees become subject to the terms of this
Agreement. The Employer shall not be required to discharge any employee for
noncompliance with the foregoing until he receives a written request from the
Union specifying the reason for such request, and the Union agrees to indemnify
the Employer and hold the Employer harmless from any liability or claims by
reason of compliance with the request of the Union.
2. This Article shall not be applicable in the State of Kansas unless and
until there has been a change in existing law making it valid in Kansas.
3. The Employer agrees to deduct from the wages due any employee, the
regular dues and/or initiation fees that are uniformly assessed by the Union
providing the Union shall furnish the Employer properly signed authorization
cards for such deductions for each employee, in accordance with such and so long
as the authorization remains in force. Such deductions will be made from wages
due for the last pay period of such calendar month and will be promptly remitted
to the duly designated office of the Union in such manner as the Union may
request in writing.
ARTICLE III
RECOGNITION
1. The Employer hereby recognizes the Union as the sole collective
bargaining agency for all of its employees engaged in the Employer's work
traditionally assigned to and under the jurisdiction of the Union, excluding,
however, all other employees of the Employer. The jurisdiction of this
Agreement shall extend to and include employees of the Employer employed in the
Counties of Jackson, Clay, Platte, Ray, Lafayette, Johnson, Bates, Henry and
Cass in Missouri, and Wyandotte, Johnson, Leavenworth and Miami in Kansas.
ARTICLE IV
TIME OF EMPLOYMENT
1. As used herein the term "local area" will be defined as that area
encompassing Jackson, Platte, Cass and Clay Counties in Missouri, and Wyandotte,
Leavenworth, Miami and Johnson Counties in Kansas. "Local driver" as used
herein will mean those drivers operating within the local area. "Out-of-town
drivers" as used herein will be defined as those drivers operating from points
within the local area to points outside the local area or from points outside
the local area.
2. For all employees, eight (8) hours will constitute a normal day's work
and five (5) consecutive days' work shall constitute a normal week's work
(Monday through Friday), time and one-half the regular hourly rate to be paid to
all employees for all work performed in excess of forty (40) hours in any one
week.
3. All regular employees will receive a forty (40) hour pay per week
guaranteed, except that this is not intended to limit the right of the Employer
to layoff regular employees if such layoffs are made at the end of a normal work
week, and in case of lack of work, the Employer may, at its election, reduce
such guaranteed work week to not less than 32 hours per week for not more than
12 weeks in any one year, regardless of whether those 12 weeks are consecutive
or not. Thereafter, the Employer shall layoff employees in accordance with the
seniority provisions of Article VIII to restore the guaranteed forty (40) hour
week to those employees not laid off.
4. A regular employee's starting time shall commence at 7:00 a.m., 7:30
a.m., or 8:00 a.m., and shall not be later than 8:00 a.m. However, the starting
time for an out-of-town driver shall, by mutual agreement of the employee and
the Employer, commence as early as 6:00 a.m. All work performed on Saturday up
to 5:00 p.m. shall be compensated for at the rate of time and one-half. All
time worked from 5:00 p.m. Saturday to 7:00 a.m. Monday (or 6:00 a.m. Monday for
out-of-town drivers agreeing to such starting time) shall be paid for at the
rate of double time.
5. Lunch time shall not exceed thirty minutes unless mutually agreed to by
the Employer and the employee involved.
6. The Employer shall reimburse out-of-town drivers required to leave the
local area for all necessary and reasonable expenses incurred by him until he
returns provided he submits receipts therefor. Necessary and reasonable
expenses for out-of-town drivers shall not include the noon meal unless the
driver is required to be out-of-town overnight.
ARTICLE V
HOLIDAYS
1. The following shall be considered legal holidays: New Year's Eve, New
Year's Day, Good Friday, Decoration Day, Fourth of July, Labor Day, Thanksgiving
Day, the day after Thanksgiving, Christmas Day and the last regular work-day
prior to Christmas day or days observed as such by the Employer.
2. All regular employees subject to the terms of this Agreement shall be
credited with eight (8) hours regular straight-time pay for such holiday not
worked, but such hours shall be considered as hours worked and added to the
accumulated hours of that week. To qualify for such holiday pay, the employee
must work the last regularly scheduled working day before the holiday and the
first regularly scheduled working day following the holiday unless the employee
requests, fifteen (15) days in advance, permission to be absent on the last
regularly scheduled working day before or the first regularly scheduled working
day following the holiday and it is mutually agreed to by the Employer.
3. If a holiday falls on Sunday, it will be observed on Monday. All work
done on the foregoing holidays or days observed as such shall be paid for at the
rate of double the regular straight time rate of pay in lieu of holiday pay.
ARTICLE VI
WAGES
1. (a) During the term hereof the minimum hourly wage scale for all
drivers shall be as follows:
Effective Dates
April 1, 1995 April 1, 1996 March 31, 1997
Local $11.62 $11.92 $12.22
Out-of-Town $11.77 $12.07 $12.37
(b) Newly hired employees will be compensated in accordance with the
following, calculated as a percent of base hourly wage rate:
(1) 0 to 6 months worked - 80%
(2) 6 to 12 months worked - 85%
(3) 12 to 18 months worked - 90%
(4) 18 to 24 months worked - 95%
(5) 24 months plus - 100% of base wage rate
(c) Where the Company requires protective devices, safety apparel and
other safety equipment, its use by the employees is mandatory. Such safety
equipment and devices, except safety shoes, will be furnished by the
Company. Bargaining unit employees are eligible for an annual (calendar
year) safety shoe allowance of $60.00 payable upon presentation of an
appropriate receipt required as proof of purchase. If the Company requires
the employees to wear special uniforms, such uniforms will be furnished
without cost to the employees. It will be the responsibility of the
drivers to wash and dry clean their own uniforms, if furnished by the
company.
(d) Effective March 31, 1996 and March 31, 1997, employees shall be
eligible for a $100 bonus if they have an accident free driving record (no
chargeable accidents). All employees shall be eligible for this $100
Safety Bonus and for new hires that have completed their probationary
period for the first year of eligibility the bonus shall be prorated.
2. Employees shall be probationary employees for forty-five (45) calendar
days from the date of their employment. Such probationary employees shall be
subject to termination by the Employer without recourse to the provisions of
this Agreement.
3. Unless otherwise agreed in writing by the Union, the normal work week
shall be Monday through Friday and pay day shall be no later than quitting time
on the following Friday.
ARTICLE VII
CALL-IN PAY
1. Persons called by the Employer for work hereunder shall be guaranteed
two (2) hours pay; if put to work, such employees shall be guaranteed four (4)
hours pay. Extra employees or employees on layoff who are called in for work
shall be guaranteed eight (8) hours pay, if they work more than four (4) hours,
except on Saturdays, Sundays and holidays.
ARTICLE VIII
SENIORITY
1. Seniority shall prevail at all times based upon length of service and
qualifications. An employee's seniority shall date back to the first date of
his hire by the Employer as a truck driver.
2. In all cases of layoffs, promotions, and demotions, the Employer shall
consider the following factors: (a) seniority; (b) ability to perform the
work; and (c) physical fitness for work. If qualifications are relatively
equal, seniority shall govern.
3. An employee shall lose his seniority if he (1) quits; (2) is
discharged for reasonable cause and not reinstated; (3) overstays a leave of
absence without reasonable excuse or prior permission of the Employer; (4) is
laid off for lack of work or illness for twelve (12) months or more; (5) is
absent from work without permission or reasonable excuse, in which case he shall
be deemed to have quit. Such employees shall lose all seniority rights.
4. An employee laid off shall be given notice of recall mailed to him at
last known address by registered mail. The employee must respond to such notice
within three (3) working days and must report to work within seven (7) working
days unless otherwise mutually agreed to. In the event the employee fails to
comply with the above, he shall lose all seniority.
5. All new vacancies and new routes shall be filled by bid based on
seniority, qualifications and physical ability.
ARTICLE IX
VACATIONS
1. The basis of vacation pay shall be the employee's straight time hourly
rate of pay in effect when the vacation is taken.
2. Vacations shall be set having due regard to seniority and the desires
of employees and the needs of the business. Normally, an employee covered by
this Agreement shall be entitled to take his vacation immediately following the
week in which the anniversary of his seniority date falls, provided, however,
that not more than one employee shall be permitted to take his vacation at any
one time. Individual exceptions may be made at the request of either the
employee or the Employer by mutual agreement.
3. Employees with one (1) year and less than three (3) years of service
with the Employer shall receive a vacation with pay of one (1) week on the basis
of forty (40) hours.
4. Employees with three (3) years or more of service with the Employer
shall receive a vacation with pay of two (2) weeks on the basis of eighty (80)
hours.
5. Employees with nine (9) years or more of service with the Employer
shall receive a vacation with pay of three weeks on the basis of one hundred
twenty (120) hours.
6. Employees with eighteen (18) years or more of service with the Employer
shall receive a vacation pay of four (4) weeks on the basis of one hundred sixty
(160) hours.
7. If a holiday falls during an employee's vacation period, the employee
shall be entitled to an additional day's pay.
8. If an employee does not take his vacation, he shall not receive
vacation pay.
ARTICLE X
FUNERAL LEAVE
Each employee shall be entitled to a funeral leave of up to two (2) days
duration, with pay, to attend the funeral of any member of the employee's
immediate family. The amount of leave granted by the Employer shall be the
amount reasonably required for the employee to attend the funeral and transact
any affairs in connection therewith, subject to the maximum leave of two (2)
days. "Immediate family" shall be defined as the employee's spouse, his
children, his mother and father, and his mother-in-law and father-in-law.
ARTICLE XI
HEALTH & WELFARE
1. The Company and the Union have agreed to a program of benefits for
employees in the bargaining unit represented by the Union and covered by this
Agreement.
2. The insurance program for employees and their dependents as set forth
in Schedules "A" and "B" attached shall be continued for the life of this
Agreement.
3. The level of employee contributions for the term of the Agreement are
as follows:
Effective Option 1 Option 2 Option 3 Option 4
April 1, 1995 Single * No Cost $ 9.93/wk.$ 7.19/wk.
Family * No Cost $23.64/wk.$17.01/wk.
January 1, 1996 Single * $1.35/wk. $11.28/wk.$ 8.54/wk.
Family * $2.69/wk. $26.33/wk.$19.70/wk
January 1, 1997 Single * $1.75/wk. $11.68/wk.$ 8.94/wk.
Family * $3.50/wk. $27.14/wk.$20.51/wk.
January 1, 1998 Single * $2.25/wk. $12.18/wk.$ 9.44/wk.
Family * $4.30/wk. $27.94/wk.$21.31/wk.
* $300.00 annual employee rebate.
4. Beginning on January 1, 1996, employee contributions to the Health &
Dental Plan shall be made on a pre-tax basis as provided under Section 125 of
the Federal Tax Code. Also as provided for under Section 125, a Healthcare
Spending Account will be made available to employees on January 1, 1996.
5. The employer agrees to maintain employee life insurance in accordance
with the following:
a. Life Insurance and AD&D (Company Paid)
Effective April 1, 1995 - $14,000
Effective April 1, 1996 - $15,000
Effective April 1, 1997 - $16,000
b. Each employee will have the option to purchase supplemental life
insurance but it will not be mandatory. At the employee's option they can
purchase double the coverage for an additional cost as follows:
Effective April 1, 1995 - $14,000 $3.36/per week
Effective April 1, 1996 - $15,000 $3.60/per week
Effective April 1, 1997 - $16,000 $3.81/per week
6. The Company also agrees to provide Sickness and Accident benefits up to
a maximum of 26 weeks in accordance with the following:
Effective April 1, 1995 - $145.00 weekly
Effective April 1, 1996 - $150.00 weekly
Effective April 1, 1997 - $155.00 weekly
(First day of hospitalization for accident, eighth day for
sickness.)
ARTICLE XII
RETIREMENT
1. All active bargaining unit employees are eligible to participate in the
Morgan Products Ltd. Profit Sharing and Savings Retirement (401K) Plan. Such
participation shall be in accordance with the terms of that Plan.
2. Because of the eligibility of employees to participate in the Morgan
Products Ltd. Profit Sharing and Savings and Retirement (401K) Plan, they will
no longer accrue any pension benefits beginning June 15, 1992 under the Morgan
Products Ltd. Hourly Pension Plan ("Hourly Pension Plan). The discontinuance of
benefit accruals under the Hourly Pension Plan will not affect benefits earned
under that Plan up to and including June 14, 1992. Where an employee is not
vested under the Hourly Pension Plan, his continued service with the company
will be counted toward satisfying such vesting requirement. The plan provides
100% vesting after five (5) years of continuous service.
3. The parties agree that the Company may seek to fully terminate the
Hourly Pension Plan for organization unit employees. Any such termination shall
be in accordance with applicable federal law and, if permissible, employees will
be allowed to roll Hourly Pension Plan payouts into their Morgan Products Ltd.
Profit Sharing and Savings Retirement Plan. In the event the employees are
allowed to roll over their plan payouts, the employer will not provide matching
funds for the employees' rolled over contributions to the Profit Sharing and
Savings Retirement Plan.
ARTICLE XIII
MANAGEMENT RIGHTS
1. The right to manage the business, direct its working forces and to
maintain reasonable rules and regulations governing the operation of the
Employer and the conduct of its employees is vested exclusively with the
Employer, except as otherwise specifically provided by this Agreement.
ARTICLE XIV
WORKING CONDITIONS
1. No employee shall be required to drive any equipment which does not
comply with all City and State safety regulations. The employees shall notify
the Employer on forms to be furnished by the Employer concerning required
maintenance on vehicles and equipment.
2. An employee may be shifted by the Employer from one piece of equipment
to another piece of equipment not to exceed two machines in any one day, except
for such additional changes as may be required due to a breakdown on required
repair.
3. Duly authorized representatives of the Union may visit the premises of
the Employer during reasonable hours for the purpose of handling employee
grievances, provided they shall have first reported to the office of the
Employer . Such visits shall not disturb normal operations of the Employer. If
the Union shall abuse this privilege, it may be terminated by the Employer.
4. The Employer agrees not to enter into any agreement or contract with
his employees, individually or collectively, which in any way conflicts with the
terms and provisions of this Agreement.
5. The Employer may discharge any employee for just cause. Negligent
work, failure to report an accident, dishonesty, drunkenness, or drinking while
on the job shall constitute just cause for discharge. However, just causes for
discharge are not limited to the foregoing. Any employee may request an
investigation as to his discharge. If an arbitration decision, pursuant to
Article XIV of this Agreement, is rendered in favor of an employee concerning
any dispute over discharge or layoff, the Employer shall not be penalized for
more than eight (8) days back pay.
ARTICLE XV
ARBITRATION
1. Any grievance involving the interpretation or application of this
Agreement must be brought to the attention of the Employer within three (3) days
after the facts giving rise to such complaint or grievance arose. Any such
grievance not so settled shall be presented in writing within three (3) days to
a representative of the Employer and of the Union. However, any grievance
regarding discharge or layoff may be initiated by the Union by written notice to
the Employer immediately after such discharge or layoff. Any grievance not
settled by representatives of the Union and the Employer within five (5) days
after delivery of written notice shall be referred to an arbitrator if the Union
so requests such arbitration in writing. Any complaint or grievance shall be
barred, if not presented or processed in the stated time and manner.
2. The arbitrator shall be selected by agreement of the parties. In the
event of an inability to agree, the selection of the arbitrator shall be made
from a list of five (5) names furnished at the request of either party by the
Federal Mediation and Conciliation Service. The arbitrator shall have no power
to add to or subtract from any of the terms of this Agreement. In the case of
arbitration, the decision of the arbitrator shall be final and binding upon all
parties to this Agreement and the expenses of the arbitrator shall be borne
equally by both sides.
ARTICLE XVI
NO STRIKE OR LOCKOUT
1. The Union agrees that, during the term of this Agreement, there shall
be no strike of any or all of the employees of the Employer covered by this
Agreement. The Employer agrees that, during the term of this Agreement, there
shall be no lockout against any or all of its employees covered by this
Agreement. For the purpose of this section, strike shall include a sit-down,
stay-in, slowdown, walkout, curtailment or stoppage of work, interference with
work or receipt of shipment of material or products, picketing the Employer's
premises; provided, however individual employees may elect to refuse to cross a
picket line, if such picket line has been first authorized by the Union involved
and any such refusal by an employee shall not be a violation of this Agreement.
2. In any event of a walkout in violation of the above provision, whether
or not officially authorized by the Union, any employee found guilty of
instigating, fomenting, actively supporting or condoning such strike, shall be
subject to discipline, including discharge, without appeal or recourse, provided
the facts in issue may be subject to arbitration.
ARTICLE XVII
CONFORMITY WITH LAW
1. If any term or provision of this Agreement, at any time during the life
of this Agreement, is in conflict with any applicable valid Federal or State
law, such term or provision shall continue in effect only to the extent
permitted by such law, and if the term or provision of this Agreement is or
becomes legally invalid, such legal invalidity shall not affect or impair any
other term or provision of this Agreement.
ARTICLE XVIII
EQUAL OPPORTUNITY
1. It is the policy and practice of both the Company and the Union to
provide Equal Employment Opportunity to all persons without regard to race,
color, religion, sex, national origin, age, or disability, as defined in
applicable Federal and State laws. This includes hiring, assigning, training,
promotions, transfers, terminations, compensation, employee benefits, and all
other conditions of employment.
2. Any reference to gender in this Agreement shall apply equally to both
male and female.
ARTICLE XIX
SCOPE AND TERMINATION
1. The parties hereto have met, discussed and negotiated with respect to
all areas and phases of collective bargaining and this Agreement represents the
full Agreement of the parties and supersedes and cancels all previous agreements
and understandings between the parties.
2. This Agreement shall be effective as of April 1, 1995, and shall
continue and remain in effect until the 31st day of March, 1998, and from year
to year thereafter unless sixty (60) days written notice is given by either
party to the other prior to the 31st day of March, 1998, or prior to March 31st
of any year thereafter of intention to modify or terminate this Agreement.
UNION NO. 541, affiliated with
BUILDING MATERIAL, EXCAVATING, the INTERNATIONAL BROTHERHOOD
HEAVY HAULERS, DRIVERS, OF TEAMSTERS
HELPERS AND WAREHOUSEMEN LOCAL
By __________________________
Elton White MORGAN DISTRIBUTION
Business Representative a Division of.
Morgan Products LTD.
By_________________________
Dennis C. Hood
SCHEDULE "A"
The new plan will provide benefits for you and each eligible dependent during
the life of the Agreement and in accordance with the individual Health Plan
Option selected. The following constitutes a summary of the available options.
HOURLY DISTRIBUTION EMPLOYEES
SUMMARY OF HEALTH PLAN OPTIONS
<TABLE>
<CAPTION>
BENEFIT OPTION 1 OPTION 2 OPTION 3 OPTION 4
<S> <C> <C> <C> <C>
Inpatient 80% after 80% after *80% after 80% after
Hospital deductible deductible deductible deductible
X-ray and Lab 80% after 80% after *80% after 80% after
deductible deductible deductible deductible
Outpatient 80% after 80% after *100% after 100% after
Surgery, Home deductible deductible deductible deductible
Health Care,
Hospice, Pre-
Admission
Testings, Pap
Smear,
Birthing
Center
Physician 80% after 80% after 80% after 80% after
Charges deductible deductible deductible deductible
Chiropractor 80% after 80% after 80% after 80% after
deductible deductible deductible deductible
maximum $500 maximum $500
per calendar per calendar
year year
Mental/Nervous Combined Combined Combined Combined
Alcoholism & Inpatient and Inpatient and Inpatient and Inpatient and
Drug Abuse Outpatient: Outpatient: Outpatient: Outpatient:
Treatment 80% after
80% after 80% after 80% after deductible
deductible deductible deductible maximum $7,000
maximum $7000 maximum $7000 maximum $7000 p/calendar
p/calendar p/calendar p/calendar year $20,000
year $20,000 year $20,000 year $20,000 lifetime
lifetime lifetime lifetime
2 Inpatient
2 Inpatient 2 Inpatient 2 Inpatient Treatment per
treatment per Treatment per Treatment per lifetime
lifetime lifetime lifetime
Prescription $80% after 80% after Generic - 100% Generic - 100%
Drugs deductible deductible no deductible no deductible
Brand - 80% Brand - 80%
deductible deductible
SCHEDULE "A"
Summary of Health Plan Options for Hourly distribution Employees (Continued)
BENEFIT OPTION 1 OPTION 2 OPTION 3 OPTION 4
Wellness
Benefit:
Routine 80% after 80% after Not Covered Not Covered
Physicals deductible, deductible,
$200 per $200 per
calendar year calendar year
maximum maximum
Routine 80% after 80% after Not Covered Not Covered
Mammograms deductible, 1 deductible, 1
per calendar per calendar
year after age year after age
40 40
Well Baby Care
(to age 24 80% after 80% after Not Covered Not Covered
months) deductible deductible
Lifetime $1,000,000 $1,000,000 $1,000,000 $1,000,000
Maximum
Out-of-Pocket Individual Individual Individual Individual
$1,900 $1,100 $1,000 $1,000
Family - $3800 Family - $2200 Family - $2000 Family - $2000
Annual Individual Individual Individual Individual
Deductible $1000 Family - $200 Family - $100 Family - $100 Family -
$2000 $400 $200 $200
Dental Plan Plan A Plan A Plan B Plan B
Current Cost See Article XI See Article XI See Article XI See Article XI
4-1-95
*Under option 3, the first $2,500 of Generic Rx, inpatient visits, and (*)
expenses are paid at 100% with no deductible.
</TABLE>
SCHEDULE "B"
MORGAN PRODUCTS LTD.
SUMMARY OF DENTAL PLANS
BENEFIT PLAN A PLAN B
Class 1 - Preventive
Services:
Oral Examinations, X-rays, 100% 100%
Cleaning, Fluoride, space
Maintainers
Sealants
(Dependent children to age 100% 100%
19)
Class 2 - Basis Services:
Emergency Treatment, 80% 80%
Amalgam/Silicate,Acrylic
Filings, Endodontics, Periodontics, Oral Surgery,
Local Anesthesia,
Extractions, Stainless
Steel Crowns
Class 3 - Major Services:
Gold Foil Fillings, Inlays 50% 50%
and Onlays, Crowns
Class 4 - Prosthodontics
Services:
Removable or Fixed 50% 50%
Bridgework, Partial or
Complete Dentures
Class 5 - Orthodontic
Services:
Teeth Straightening 50% 50%
Procedures (Dependent
Children to age 19)
Deductible Individual - Individual -
(applies to Class 2, 3 and $35 $35
4 Services only) Family - $70 Family - $70
Annual Non-Orthodontic $1,000 $1,000
Maximum
$1,000 $1,000
Lifetime Orthodontic
Maximum
[Letterhead & Logo
Local Union 541
4501 Van Brunt Boulevard
Kansas City, Missouri 64130]
April 1, 1995
LETTER OF AGREEMENT
Upon the signing of this agreement, all employees in the employ of Morgan
distribution, a division of Morgan Products Ltd., shall each be entitled to a
signing bonus of $100.00.
Business Representative
BUILDING MATERIAL, EXCAVATING,
HEAVY HAULERS, DRIVERS,
HELPERS AND WAREHOUSEMEN LOCAL
UNION NO. 541, affiliated with
the INTERNATIONAL BROTHERHOOD
OF TEAMSTERS
By __________________________
Elton White
MORGAN DISTRIBUTION
a Division of.
Morgan Products LTD.
By_________________________
Dennis C. Hood
INDEX
ARTICLE DESCRIPTION
PAGE
I Declaration of Principles 1
II Union Security 1
III Recognition 2
IV Time of Employment 2
V Holidays 3
VI Wages 3
VII Call in Pay 4
VIII Seniority 4
IX Vacations 5
X Funeral Leave 5
XI Health & Welfare 6
XII Retirement 7
XIII Management Rights 7
XIV Working Conditions 8
XV Arbitration 8
XVI No Strike or Lockout 9
XVII Conformity with Law 9
XVIII Scope and Termination 10
Schedule "A" 11
Schedule "B" 13
Letter of Agreement 14
Exhibit 10.22
TABLE OF CONTENTS
Page
Preamble
Purpose
Article I Recognition and Union
Security
Article II Management
Article III Hours of Work and Overtime
Article IV Holidays
Article V Wages
Article VI Seniority:
Application of Seniority
Definition of Seniority
Probationary Employees
Loss of Seniority
Seniority List
Temporary Reductions in
Force
Reductions in Force and
Layoff
Recall and Expansion of
Force
Job Bidding
Reassignment to Lower Labor
Grade
Transfers
Article VII Paydays
Article VIII Equal Opportunity
Article IX Work Related Injuries
Article X Leave of Absence
Article XI Military Leaves
Article XII Deductions
Article XIII Shop Committee
Article XIV Jury Duty Pay
Article XV Bulletin Boards
Article XVI Warnings
Article XVII Grievance and Arbitration
Article XVIII Vacations
Article XIX Funeral Leave
Article XX Union Label
Article XXI Health and Welfare
Article XXII No Strike -- No Lockout
Article XXIII Extent of Agreement and
Waiver
Article XXIV Continuous Operations
Article XXV Termination of Contract
Schedule A
Schedule B
Schedule C
Schedule D
Schedule E
Schedule F
Schedule G
PREAMBLE
This Agreement dated this 7th day of May, 1995, is made by and between Morgan
Product Ltd. for its plant in Oshkosh, Wisconsin, hereinafter called the
"Company", the Midwestern Industrial Council and affiliated Local Union No.
1363 of the United Brotherhood of Carpenters and Joiners of America, AFL-CIO,
hereinafter called the "Union." It shall be effective beginning at 12:01
a.m. on May 7, 1995, and ending at 12:01 a.m. on May 10, 1998.
PURPOSE
The general purpose of this Agreement is to promote the mutual interest of
the Union and the Company, to provide for the operation of the plant of the
Company under methods which will further to the fullest extent the safety and
welfare of the employees, economy of operation, quantity and quality of
production, and elimination of waste. It is recognized by this Agreement to
be the duty of the Union and its members and the Company to cooperate fully,
individually and collectively, for the advancement of these conditions.
ARTICLE I - RECOGNITION AND UNION SECURITY
1. The Company recognizes the Midwestern Industrial Council and affiliated
Local Union No. 1363 of the United Brotherhood of Carpenters and Joiners
of America as the exclusive collective bargaining agent for all its
production and maintenance employees (including firemen) of the Company
at Oshkosh, excluding sales, office and clerical employees, watchmen,
professional, administrative and supervisory employees as defined in the
National Labor Relations Act.
2. The Company agrees not to discriminate against any employee because of
his Union membership or proper Union activities.
3. It shall be a condition of employment that all employees of the Company
covered by this Agreement who are members in good standing on the
effective date of this Agreement shall remain members in good standing.
It shall also be a condition of employment that all employees of the
Company covered by this Agreement who are hired on or after the
effective date of this Agreement shall, upon completion of their forty-
five (45) workday probationary period, become and remain members in good
standing of the Union.
"Membership in good standing" shall mean the payment or tender of the
periodic dues and initiation fee uniformly required as a condition of
acquiring or retaining membership in the Union.
4. For those employees in the collective bargaining unit who have given the
Company a lawful authorization card, the Company will deduct, from the
first pay check for each month, monthly Union dues for the month in
which the deduction is made and, if owing by the employee, an initiation
fee in the amounts approved by the International Union. Deductions thus
made shall be mailed by the Company to the duly authorized officer of
the Local Union within five (5) days after said deductions are made.
a. The Union shall indemnify and save the Company harmless against any
and all claims, demands, or other form of liability arising out of
or by reason of action taken or not taken by the Company in
reliance upon the authorization cards referred to in paragraph 4
above for the purpose of complying with any of the provisions of
this paragraph.
ARTICLE II - MANAGEMENT
1. Except as expressly limited by other Articles of this Agreement, the
management of the plant and the direction of the working force,
including the right to transfer, hire, suspend, or discharge for proper
cause, and the right to relieve employees because of lack of work or for
other legitimate reasons, to determine the products to be produced or
manufactured, and the right to introduce new or improved methods or
facilities is vested exclusively in the Company.
2. Nothing in this Agreement shall be deemed to limit or restrict the
Company in any way in the exercise of the regular and customary function
of management except as otherwise expressly provided for in this
Agreement.
3. No production work shall be performed by non-bargaining unit personnel
which is normally performed by employees within the bargaining unit
except for instructional purposes, experimental work, inspection or in
case of emergency where the performance of work by excluded personnel
may be required to preserve or protect the property of the Company and
expediting production in the absence of bargaining unit personnel.
The Company agrees to notify the Union prior to any work being performed
by non-bargaining unit personnel.
ARTICLE III - HOURS OF WORK AND OVERTIME
Hours of work for operations that are on a one-shift, two-shift or three-
shift operation that operates Monday through Friday shall adhere to the
following:
1. The normal workweek shall be forty (40) hours, which will normally
consist of five, eight (8) hour days, Monday through Friday, provided
that this is not interpreted as a guarantee of eight (8) hours of work
per day or forty (40) hours of work per week. The Company agrees to
discuss in advance with the Shop Committee any reduction of the workweek
below forty (40) hours and with the understanding that all part-time and
probationary employees will be laid off. Except where production
requirements make alternate scheduling necessary, each normal workday
shall be from 7:00 a.m. until 12:00 Noon and from 12:30 p.m. to 3:30
p.m. The Company will notify the union of a schedule change in advance
and those employees affected will receive at least five (5) days notice
of such change.
When an entire department or work center is scheduled to work weekday
overtime, the Company may schedule the start of the first shift at 6:00
a.m. The regular Saturday overtime work schedule will be set to begin
at either 6:00 a.m. or 7:00 a.m. In making these decisions, the Company
will make a good faith effort to accommodate those employees who have a
legitimate conflict with the changed starting time.
a. The normal workweek for firemen at the main plant shall be 40 hours
which normally will consist of five (5) eight-hour days. Every
fourth week shall be a 48-hour workweek. This shall not be
interpreted as a guarantee of 40 or 48 hours of work per week or of
8 hours of work per day. The Company agrees to discuss in advance
with the Shop Committee any reduction of the workweek below the
hours listed above. The shifts of the firemen at the main plant
shall be established by the Company after consultation with the
Shop Committee.
b. Firemen at the main plant shall eat their lunch during their
regular eight-hour shift at any time they desire but shall continue
to perform their normal duties as required during said shift.
c. There may be times when an energy emergency exists or the Company's
supply of energy is curtailed or may be curtailed during a
particular shift. In order to maintain employment and production
while remaining competitive during these periods, the Company may
adjust starting times and/or the normal workweek without penalty of
Article V, #5 or Article III, #2 as conditions demand.
Prior to implementing the above, the Company agrees to discuss the
reason for the implementation with the Shop Committee.
2. All time worked by any hourly paid employees in excess of eight (8)
hours in any workday, or in excess of forty (40) hours in any workweek,
shall be paid for at the rate of time and one-half. THERE SHALL BE NO
PYRAMIDING OR DUPLICATION OF OVERTIME RATES.
a. The Company agrees that they will first try to run needed overtime
in order to meet production requirements during the normal
workweek. However, if production needs cannot be met or because of
scheduling difficulties and/or material shortages, the Company will
then and only then schedule additional overtime work.
The Company also agrees to post a notice for Saturday overtime at
least twenty-four (24) hours prior to the starting time.
b. The Company will guarantee its employees one weekend off in the
months of June, July and August. However, if during any of these
months the employee volunteers to work or a plant shutdown occurs,
this guarantee for that month does not apply.
An employee may be excused from working weekend overtime (1) where
work to be performed is on a Sunday, (2) where the employee is
scheduled to work on a Saturday that follows a holiday observed on
a Friday, (3) where another qualified employee on the shift is
readily available and willing to perform the overtime work, or (4)
where an employee was given approval by the Company at least one
(1) week in advance to schedule a Friday vacation day.
3. As conditions arise the hours of work will be adjusted by the Company
and Shop Committee.
4. All work performed on Saturday, except for work on shifts starting on
the preceding Friday and continuing into Saturday, shall be paid for at
one and one-half times the employee's straight-time hourly rate.
All time worked by firemen in excess of eight hours in any workday, or
in excess of forty hours in any workweek, shall be paid for at the rate
of time and one-half, provided that in no event shall overtime premium
be paid twice for the same hours worked, and provided further that
overtime premium shall not be paid under this paragraph solely because
of normal rotation of shifts by firemen at the main plant.
5. Double time shall be paid for all work performed on Sunday.
Firemen at the main plant who are required to work a seventh consecutive
day in a workweek shall be paid double time for all hours worked on such
day, provided that the employee has worked 40 hours or more during the
preceding six days.
6. Any employee reporting to work for whom there is no work available or
who works less than four (4) hours shall be entitled to four (4) hours
pay. This shall not apply for events such as "acts of God, utility
failure, major mechanical breakdown, government restrictions, fire,
floods, riots, civil commotions, the failure or refusal of a group of
employees to report for or perform their work or causes beyond the
control of the Company."
7. Work may be carried on in one or more shifts. If work is carried on in
more than one shift, no split shift shall be allowed. Each shift will
follow the other except that the Company may schedule a regular eight-
hour third shift to begin at 10:30 p.m. and end at 7:00 a.m. When such
a shift has been established, the Company shall have the right to assign
employees on that shift to any work that needs to be performed.
a. EXCEPTION: Part-Time Employees -- If the Company is unable to fill
its production requirements and its need for full-time personnel on
any shift, it may, after exhausting layoff and recall rights of
employees under the Contract, hire part-time personnel to fill its
needs.
8. The Company will try to equalize overtime wherever practical between the
same jobs within the same department and shift.
9. Changes in working hours for watchmen and employees doing maintenance
work may at the request of either party be discussed by the Shop
Committee, the Company and the employee affected.
10. Break Period: A paid ten (10) minute break period will be allowed
approximately in the middle of the first half of all work shifts and a
paid ten (10) minute break period will be allowed approximately in the
middle of the second half of all work shifts. Whenever production or
maintenance needs allow, the break time shall be the same from one
department to the next.
11. Absence: Whenever because of illness or other good reason it is
necessary for an employee to be absent from work, he shall notify the
Company one hour, if possible, before the start of his shift so as not
to inconvenience other employees and the Company.
When the employee returns to work after such an absence, if possible, he
will give the Company notice on the preceding workday in order that a
place can be made ready for him.
a. It is understood that absences must be evidenced by an absentee
slip signed by the individual employee and given to the authorized
Company representative.
12. When an employee is called in to work by the Company for an emergency or
breakdown, the employee will receive two (2) hours of pay plus time
worked.
ARTICLE IV - HOLIDAYS
1. The following shall be observed as holidays: New Year's Day, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day, the Friday after
Thanksgiving, the day before Christmas, Christmas Day, Good Friday and
the day before New Year's. The days on which these holidays will be
observed during the term of this Agreement is outlined in Schedule E.
All full-time employees who have acquired seniority shall receive pay
for eight (8) hours at their respective straight time hourly rate for
the day on which the holiday is observed.
Each year there will be a floating holiday. During the term of this
Agreement, such paid holiday shall be at each employee's discretion
provided the date selected is approved in advance by the Company.
2. Holidays falling on Saturday will be observed on the preceding Friday.
Holidays falling on Sunday will be observed on the following Monday. If
an employee works on a holiday, except firemen, he shall be paid, in
addition to his applicable number of hours of straight time holiday pay,
double time for all hours actually worked on such holiday.
3. To be eligible for full holiday pay, an employee must work the full
scheduled shift preceding and the full scheduled shift following such
holiday, or supply acceptable excuse for the absence. However, when an
employee is absent during the first half of a shift on the day preceding
a holiday, or during the last half of a shift following a holiday,
holiday pay shall be reduced only by the amount of time an employee is
absent on such shifts.
a. If any employee is scheduled to and accepts work on a holiday and
fails to do so, he shall not be eligible for said holiday pay,
unless he provides the Company with an acceptable excuse for such
absence.
4. It is understood that absences must be evidenced by absentee slips
signed by the individual employee and given to the authorized Company
representative.
5. Double time shall be paid for all work actually performed on holidays,
except firemen, in addition to eight (8) hours of straight time holiday
pay. No work shall be performed, except firemen, on Independence Day,
Christmas Day, or Labor Day, except to protect life or property or to
meet customer demands.
ARTICLE V - WAGES
1. Effective May 7, 1995, all active employees on the payroll will have
their straight time hourly rate at the step they presently occupy
increased by $0.30 as shown on attached Schedule "A".
2. Effective May 5, 1996, all active employees on the payroll will have
their straight time hourly rate at the step they presently occupy
increased by $0.25 as shown on attached Schedule "B".
3. Effective May 4, 1997, all active employees on the payroll will have
their straight time hourly rate at the step they presently occupy
increased by $0.25 as shown on attached Schedule "C".
4. Any new employees hired in any department and classified as "Helper"
will be paid as per Schedules "A", "B" and "C". The Company at its
option may advance such "helpers" to the completion of probation rate or
the 181-day rate before time required.
5. Shift Differential: A differential of $0.25 per hour shall be paid for
people assigned to work on the second shift. A differential of $0.30 per
hour shall be paid for people assigned to work on the third shift. This
includes firemen.
6. Any employee temporarily assigned or advanced to a job in a higher grade
classification will be paid the rate of such job grade at the same step
that they presently occupy.
7. Probationary/starting, completion of probation, 181-day, 271-day, 366-
day, 455-day and 545-day rates are listed in Schedules "A", "B" and "C".
8. Any employee reduced to a lower job grade classification will be paid
the maximum rate of the lower job classification, unless such employee's
current straight time hourly rate is lower than the maximum. In such
cases the employee will retain his rate until the completion of
probation, 181-day, 277-day, 366-day, 455-day or 545-day rate applies.
9. Classification of New Jobs: New jobs or jobs not now classified shall
be classified within six (6) weeks and shall be retroactive. The
present job evaluation shall be brought up to date. The Company shall
furnish to the Union a copy of the job evaluation book, which contains
the job evaluation date and all descriptions. New jobs or jobs that
have been modified beyond the present job descriptions shall have new
descriptions. The labor grade and rate into which a new or modified job
shall be determined in accordance with the prescribed job evaluation
program. Job descriptions and rates for new or modified jobs shall be
submitted to the Union Job Evaluation Committee. Any disagreement
between the Company and the Union Committee in regard to new or modified
jobs shall be resolved by Article XVII, Grievance and Arbitration.
10. It is recognized that the Company may at its discretion assign "leaders"
to lead small groups in assigned tasks. Lead pay rates for the term of
this agreement are outlined in Schedule "G".
ARTICLE VI - SENIORITY
1. APPLICATION OF SENIORITY:
Seniority shall govern the order of layoffs, recalls and promotions to
the extent provided in the succeeding provisions of this Article.
2. DEFINITION OF SENIORITY:
Seniority is defined as the employee's length of continuous service at
the Company's plant commencing with such employee's most recent date of
hire.
3. PROBATIONARY EMPLOYEES:
A new employee and any employee hired after a break in service as
defined in Section 4 of this Article shall have no seniority and may be
laid off or discharged at the sole discretion of the Company until he
has actually worked forty-five (45) days and shall during that period be
considered a probationary employee. At the end of the forty-five (45)
workday period of continuous active employment, such employee's
seniority shall be computed from his most recent date of hire.
4. LOSS OF SENIORITY:
Any employee's seniority and employment shall terminate upon the
occurrence of any of the following:
a. Discharge or voluntary quitting of employment;
b. Failure to report for work after a layoff within five (5) calendar
days after a written notice of recall has been sent by the Company
to the employee at his last known address on record in the
employee's personnel file with a copy to the Union, unless the
employee is prevented from so reporting by illness or other
satisfactory reason and notifies the Company within the above
stated five (5) calendar days of such conditions;
c. Absence from work due to layoff or absence due to bona fide injury
or illness which renders the employee incapable to work shall
retain seniority if he returns to work within twenty-four (24)
consecutive months after the absence commenced, or within a period
equal to the seniority which he had when the absence commenced,
whichever is shorter;
d. Absence from work for two (2) consecutive workdays without
notification to the Company or with a reason not acceptable, except
in cases where it is impossible to notify the Company and such
impossibility is supported by evidence presented by the employee
which is satisfactory to the Company;
e. Absence exceeding the period for which a leave of absence has been
granted or extended unless the employee's excuse is satisfactory to
the Company;
f. Acceptance of other employment while on leave of absence unless
agreed in writing by the Company;
g. Retirement.
5. SENIORITY LIST:
The Company shall post on bulletin boards and provide each Union steward
and officer with a current seniority list every January 1 and July 1.
The seniority list shall contain the employee's name, most recent date
of hire, most recent job title and job grade classification. Such
seniority lists shall become official unless challenged by the Union
under the grievance procedure within five (5) workdays after such lists
are posted.
6. TEMPORARY REDUCTIONS IN FORCE:
Temporary reductions in force for periods of fourteen (14) consecutive
calendar days or less shall be made by the Company without regard to the
length of service of affected employees. Such brief reductions
resulting from production irregularities, machinery failure, lack of
materials, etc., shall normally affect only those employees in that
production area. Any holidays occurring during this period shall be
paid for by the Company to the employees temporarily laid off who are
eligible for such pay. Persons displaced because of a temporary
reduction in force shall be given preference for other available work
based on their seniority provided that they have the present ability to
perform such available work. In the event insufficient numbers of
employees make themselves available for such work, the Company may at
its option assign the least senior qualified employee to such work.
7. REDUCTIONS IN FORCE AND LAYOFF:
In the event of layoffs or departmental reductions in force, the
procedure shall be as follows:
a. The Company shall notify the Shop Committee as soon as possible.
b. The Company will post a notice twenty-four (24) hours prior to
layoffs of the initial people to be affected.
c. Probationary employees and part-time employees will be laid off
before permanent employees are laid off. Probationary Maintenance
employees above Labor Grade 8 may be maintained by the Company.
d. Layoffs in excess of fourteen (14) consecutive calendar days shall
be made by inverse order of plant-wide seniority except that an
employee whose qualifications are needed for the remaining work may
be retained provided there is no senior employee subject to layoff
who is qualified to perform the work involved.
e. When it is necessary to reduce the workforce in a department, the
Company will transfer employees out of the department by inverse
order of plant-wide seniority provided the employees remaining in
the department are qualified to perform the remaining work.
Employees transferred out of their department during such a
departmental reduction in force shall have an opportunity to bid on
posted jobs notwithstanding any previous job bids they may have
exercised. An employee who exercises a job bid during a reduction
in force shall not forgo any rights he may have under Section 8b of
this Article. If there are no job postings available, the Company
may transfer such employees to available work in other departments.
In making such transfers, the Company will take into consideration
the seniority and qualifications of the affected employees and
their expressed interests. Such employees will also have the
opportunity to take a voluntary layoff rather than be assigned to
an available opening.
Where reductions in grade occur within a department because of a
reduction in force, the Company will transfer an employee to the
next lowest grade within the department provided such employee has
more seniority than the employee he displaces in that job grade.
If the lower job is labor grade 6 or above, the employee being
considered for transfer must be qualified to perform the duties of
the job.
8. RECALL AND EXPANSION OF FORCE:
a. The employee on layoff with the greatest plant-wide seniority shall
be entitled to be recalled to any available work within the plant,
regardless of department, which such employee is qualified to
perform with minimum familiarization. Should the senior laid off
employee decline a recall to available work in the plant, such
employee will be bypassed and recalled thereafter only to the job
grade classification in the department he last worked or to his
regular job in the department. The Union will be notified of the
names of the employees laid off and recalled.
When an opening develops, the senior qualified employee on layoff
who held the job title or an employee who had been temporarily
transferred to such job for a period of 21 total full working days
and can perform the job with minimum familiarization will be
recalled to work without posting the position.
When an opening develops and there are no qualified employees, the
job will be posted and if the job is not filled or it is a grade 2
and below, the least senior employee on layoff must return
regardless of qualifications, shift and/or grade after all laid off
senior employees have been offered the opportunity to return to
work and have refused.
b. When filling a vacancy, the Company will first return to the job
the most senior qualified employee who was displaced from the job
in question within the previous one-year period provided such
employee is in the same or a lower labor graded job.
9. Employees with more than one (1) year of seniority serving as Union
President, Vice President, Treasurer, Financial Secretary, Recording
Secretary, Shop Chairman or Department Steward shall be put at the top
of the plant seniority list for purposes of layoff, provided they are
involved in the processing of grievances and on-the-job contract
administration.
Except where there is a need for his specific skills, a Union steward
will not be transferred from his department, or shift as long as there
is work available which he is qualified to perform.
When it becomes necessary to eliminate or consolidate work centers, cost
centers, or departments the department steward representing the
employees affected will continue as the union representative for the new
or revised department provided there is work remaining which he is
qualified to perform.
10. JOB BIDDING:
a. It is understood and agreed that in all cases of promotions the
following factors shall prevail:
1) length of service
2) knowledge, training, skill and efficiency
3) absentee/tardiness record.
For Labor Grade 6 jobs or better, where all factors are relatively
equal, length of service shall govern. For Labor Grade 5 jobs or
lower, seniority and absentee/tardiness record shall be the
governing elements for promotions. When length of service is not
followed, the Company shall immediately notify the Shop Committee
Chairman in writing of the fact and the reason thereof, subject to
the grievance procedure. Permanent vacancies for jobs Labor Grade
2 and below are not subject to the bidding procedure; they will
automatically be filled by in-house placements or new hires.
Permanent vacancies for all other jobs will be posted, except in
the case where there is an immediate need for an experience
maintenance employee. Regular apprentice positions will be posted.
Employees wishing to be considered for specific job openings that
may develop in any job grade may identify those jobs by completing
a job bid form in the Personnel Office. An employee can have up to
five (5) job bid form requests active at one time. A job bid can
be cancelled or changed at any time by advising Personnel and
completing the appropriate form.
All job openings in Labor Grade 3 and above will be posted for two
(2) days. When an opening develops in Labor Grade 5 and below, the
most senior employee who responds to the posting and among those
with a job bid on file will be offered the job. For Labor Grade 6
and above, the most qualified senior employee who responds to the
posting and from those who have a job bid on file will be offered
the job. An employee may refuse the job offer without penalty of
consideration for other jobs for which he may be the successful
bidder.
The Shop Committee has the privilege of calling to the Company's
attention the qualifications of any employee. The Company shall
give the Shop Committee Chairman in writing, within five (5)
working days after a vacancy occurs, the decision concerning the
award of job/jobs. If there are no qualified bidders, the Company
may fill said vacancy as they see fit.
Where the Company needs to train for special back-up skills for
certain positions in labor grade 6 and above, it will post such
positions as trainee positions. The senior employee who responds
to the bid will be selected and provided the opportunity for such
training which will be accomplished through temporary assignments.
After completing training such employee will be assigned to fill in
on the job for which he was trained as required. When a permanent
vacancy occurs for such position the senior trained employee will
be required to fill the opening provided it is on the same shift as
he is.
b. An employee who was a successful bidder to a higher graded job will
not be eligible to bid to another higher graded job for a period of
six (6) months or to the same or lower graded job for a period of
twelve (12) months.
This may be waived when mutually agreed to by the Company and the
Union.
c. Employees will be allowed to bid for positions in the same or lower
job grades in accordance with the provisions listed above in this
Article. However, employees who are recognized as the successful
bidder to any such job will be restricted from bidding for twelve
(12) months.
d. An employee who is offered and refuses a second job bid within a
period of one (1) year will not be eligible for another job bid
consideration for a period of six (6) months.
e. Employees who have less than twelve (12) months of seniority are
ineligible for job bidding unless agreed to by the Company.
f. When new jobs, departments and/or shifts are established, all jobs
will be posted regardless of job grade. Employees wishing to be
considered for these jobs will have two (2) days, including the day
posted, to fill out a bid sheet.
g. Any employee who has an active warning on file for
absenteeism/tardiness is ineligible to bid for a period of six (6)
months from date of last warning.
h. If there are no job bids on file, the job will be posted by
department, specific job and shift for two (2) days.
11. REASSIGNMENT TO LOWER LABOR GRADE:
Should it be determined that an employee does not possess the ability to
perform a work operation to which he is assigned, the employee shall be
removed from said job and shall be placed by the Company into an
available position which he is qualified to perform. If there is no
available opening, such employee shall be placed in a Labor Grade 3
position in accordance with his relative seniority.
12. TRANSFERS:
Temporary Transfers -- twenty (20) consecutive days or less:
a. The Company agrees where practical to transfer the least senior
qualified employee.
1) If transferred to a lower job classification, no change to the
employee's straight time hourly rate will be made.
2) If transferred to a higher graded job, the employee will be
paid at the rate of the job at the same step they presently
occupy for all hours worked in a day if such temporary
assignment is for a period in excess of four (4) hours in the
day. Upon return to his former job duties the employee will
receive the straight time hourly rate in effect at time of
temporary transfer.
3) Transfers from shift to shift will be made first with the
agreement of the affected employees. If insufficient numbers
of employees make themselves available for such work, then the
Company shall where practical make such transfers on the basis
of the least senior qualified employee being transferred.
Whenever practical, a notice of five (5) calendar days will be
given to all employees before shift transfers are made.
b. Employees will not be transferred from their job if there is work
on their job unless they agree to the transfer or there is no other
qualified person on that shift to fill the job.
Permanent Transfers: twenty-one (21) consecutive working days or more:
a. Employees may request to be transferred to lower job grade
classifications and the Company will, where practical, honor such
requests as vacancies occur and where plant efficiencies can be
maintained.
b. Any employee with twenty (20) or more years of seniority having
become unable to perform his job to Company standards shall be
given preference to such light work as may be available and which
such employee can do.
c. Any employee transferred from one department to another will retain
his plant-wide seniority.
d. The rates for transferred employees shall be paid as follows:
1) If transferred to a higher job grade classification,
immediately upon beginning work the employee shall be paid in
accordance with Article V, #6.
2) If transferred to a lower job grade classification,
immediately upon beginning work the employee shall be paid in
accordance with Article V, #8.
13. The Company will notify the Shop Chairman as to layoffs or recalls no
later than five (5) workdays after such events occur.
14. Provided there is no interference with the proper staffing of each shift
with qualified employees, an employee with seniority may replace a
junior employee on a different shift in the same department and job
classification subject to the following:
a. that both employees involved are qualified to perform each other's
work and
b. that both employees have at least twelve (12) months of experience
on the job and in the department
Such requests for shift transfer must be made in writing. No more than
one shift preference shall be granted to any one employee in any twelve
(12) month period. An employee affected by the granting of a shift
preference will receive at least 30 days notice prior to such change in
shift assignment taking place. This provision will become effective as
of 1/1/96 at which time the twelve (12) month period referred to in (b)
above shall begin.
15. Any employee transferred out of the bargaining unit to another position
with the Company shall not continue to accumulate seniority while out of
the bargaining unit, but upon subsequent transfer back into the
bargaining unit shall retain the seniority which he had at the time of
transfer out of the bargaining unit and shall be placed by the Company
into an available position which he is qualified to perform in Labor
Grade 5 or below. If there is no available opening, such employee shall
be placed in a Labor Grade 3 position in accordance with his relative
seniority.
16. Minimum familiarization shall be defined as a maximum period of four (4)
hours during which the affected employee may familiarize himself with
the operation and demonstrate his qualifications in performing the work.
This is not to be considered training.
17. Summer help will have no seniority rights over permanently hired
employees.
If a summer help employee decides to remain with the Company as a
permanent employee and the Company has an opening for which they want to
slot the person, the employee's seniority will be his last date of hire.
Summer help employees are ineligible for any benefits and will be
required upon completion of their probationary period to pay a monthly
fee equal to the monthly Union dues excluding the initiation fee. If
they elect to remain as full time employees, the Union initiation fee
must be paid.
18. Prior to implementing its decision on who will be laid off during a
permanent reduction in force, recalled from lay off, or awarded a job
bid to a position in labor grade 6 or above, the Company will discuss
the reasons for its pending action with the Shop Chairman.
ARTICLE VII - PAYDAYS
Paydays shall be weekly and pay checks delivered to the employees during the
regular working hours at their respective places of employment on Thursday of
each week. When the plant is closed down on Monday, or when Monday is
observed as a holiday, payday shall be on Friday of that week.
First, second and third shift employees shall be paid on Thursday. However,
the Company reserves the right to change payment back to Friday if
absenteeism within a department and/or shift is deemed by the Company to be
excessive on the Friday after payday.
Employees who work during a scheduled vacation shutdown shall be paid on
their normal payday.
ARTICLE VIII - EQUAL OPPORTUNITY
The Company and the Union separately and jointly agree that all terms and
conditions of this Agreement will be applied equally to all employees
regardless of age, race, creed, color, sex, disability or national origin.
Wherein the text of this Agreement words of masculine gender are used, they
shall be interpreted to denote either masculine or female gender.
ARTICLE IX - WORK RELATED INJURIES
Any employee who is injured in the performance of his duties to such an
extent as to require medical attention by a physician away from the premises
shall not lose pay for the time away from the plant for the day of injury
(excluding scheduled overtime) provided he returns to work promptly upon
leaving the physician`s office, or the physician certifies that the employee
is unable to return to work on that day. For subsequent visits to the doctor
for on-the-job injuries, the employee shall be compensated by the Company as
above, provided the appointment was made by the doctor and no other payments
are made under any compulsory disability act and/or law or Company-paid
benefit plan.
ARTICLE X - LEAVE OF ABSENCE
1. Any employee selected by the Union as a delegate to a convention or
other official Union business will be granted a leave of absence from
the Company and shall not be discriminated against in any way because of
the necessary time off; provided, however, that the request is submitted
in writing to the Company one (1) week prior to the date of the
requested leave. The Company reserves the right to limit the number of
employees off from any one area and/or job. Where unusual circumstances
are involved, the Company will give consideration to a shorter notice
requirement for the President and Chairman of the Shop Committee.
2. An unpaid leave of absence will be granted to not more than one (1) full
time employee who is elected or appointed to a full time position with
the Union. The duration of such leave is not to exceed one (1) year
unless a renewal of the leave is granted by the employer. At least
fifteen (15) days prior notice must be given before such leave will be
granted, and employees returning from such leave must provide the
employer with fifteen (15) days prior notice. Such leave shall not
affect the employee's seniority.
If the employee returns to work, said employee shall be slotted into an
open position of a Labor Grade 3 or lower or unfilled posted job.
3. Personal leaves of absence may be granted without pay or benefits,
unless identified in the terms of the Agreement, for acceptable personal
reasons for periods not to exceed thirty (30) calendar days consistent
with the Company's ability to meet production requirements.
4. Employees who have completed their probation period shall be granted a
leave of absence without pay or benefits, unless identified in the terms
of the Agreement, for periods not to exceed twenty-four (24) months or
length of service, whichever is less, for a proven inability to work
because of illness or injury.
5. Where required, the Company will grant other leaves of absence under
applicable federal and state law.
ARTICLE XI - MILITARY LEAVES
Military leaves will be handled in accordance with applicable regulations.
ARTICLE XII - DEDUCTIONS
There shall be no deductions of any kind from an employee's check except as
required by law or as mutually agreed upon between the individual employee
and the Company from time to time. This provision would not prohibit the
Company from making deductions for payroll errors. When making such
deductions, the Company will upon request make the appropriate adjustment for
the tax effect of the deduction.
ARTICLE XIII - SHOP COMMITTEE
1. A Shop Steward Committee shall be selected by the Union to confer with
the Company as to matters of mutual interest. There may be one (1)
Union steward for each group of bargaining unit employees supervised by
a foreman.
2. The Union Officers and Union department representatives agree to use
their best efforts in maintaining production of all departments of the
plant.
3. The Shop Committee shall meet with the Company outside of normal working
hours, except by consent of the Company, at a time mutually agreed upon
between the Shop Committee and the Company.
4. Meetings between the Shop Committee and the Company shall be once a
month unless special matters arise which need immediate consideration;
in these cases, the Company and Shop Committee will mutually agree to a
meeting time. A maximum of seven (7) Shop Committee personnel will be
entitled to attend at one time.
5. The Shop Chairman may with the advance permission of his supervisor
leave his department for the purpose of exercising his responsibilities
as outlined in Article XVII. When he is granted such permission, his
regular wages will continue while he is absent from his job provided he
takes only such time as is reasonably necessary for the exercise of his
contractual responsibilities.
ARTICLE XIV - JURY DUTY PAY
Employees actively employed who have one (1) year or more of seniority and
who are required to serve on a jury panel shall (upon presentation to the
Company of satisfactory evidence of their being required to serve, their time
spent in jury service and the amount of compensation received) be paid the
difference between their straight time hourly rate of pay (based upon eight
(8) hours per day) and the amount of compensation received for jury service
for a maximum period of thirty (30) working days during any calendar year.
First shift employees who are released from jury service before noon on the
day for which they are claiming reimbursement are expected to return to work
promptly. Second and third shift employees released before 10:30 a.m. are
expected to report to work for their scheduled shift that day. First shift
employees who are released from jury service after the noon break shall be
excused from work that day. Second and third shift employees released after
10:30 a.m. shall be excused from working their shift that day.
ARTICLE XV - BULLETIN BOARDS
1. The Company agrees to continue to furnish bulletin boards as agreed upon
by the Company and the Union. The number of boards will be equal to the
number of time clocks and they will be located next to these time clocks
or their equivalent in an accessible and visible location. The boards
will to be used for the following purposes by the Union:
a. Notices of Union recreational and social affairs;
b. Notice of Union elections;
c. Notices of Union appointments and results of Union elections;
d. Notices of Union meetings;
e. Interpretation of laws, governmental regulations and National Labor
Relations Board rulings and decisions.
2. It is understood and agreed that the keys to said bulletin boards will
be delivered to the Chairman of the Shop Committee who shall be
responsible therefore.
ARTICLE XVI - WARNINGS
1. The Union reserves the right to protect the reasonability of discipline
through the grievance procedure. Copies of all written warnings and
disciplinary notices shall be delivered to the President, Chairman of
the Shop Committee and to the Union Steward of Local Union No. 1363.
The Company agrees that it will make a good faith effort to notify the
Chairman of the Shop Committee or the President's designated
representative of its intent to terminate a member of the bargaining
unit prior to such action.
2. In addition to the notice of warning in paragraph #1 above, the Company
further agrees that it will request the presence of the applicable Shop
Committee member when suspending and/or terminating members of the
bargaining unit.
3. This Article shall not apply to probationary employees.
ARTICLE XVII - GRIEVANCE & ARBITRATION
1. For the purpose of this Agreement, a grievance is defined as any dispute
or disagreement between an employee or employees and the Company or the
Union and the Company as to the interpretation or application of this
Agreement. All grievances shall be resolved in an orderly manner as
provided in this Article.
STEP 1. An employee who has a complaint must initiate a grievance
within five (5) scheduled working days from the time the employee
involved first knew or could have known of the facts giving rise to the
complaint. An employee shall first discuss his complaint or grievance
with his immediate Supervisor and may request the area's Union Steward
be present during such discussion. Every effort shall be made to settle
the complaint in this manner.
STEP 2. If the grievance is not resolved in Step 1 and the Union
Steward was not involved, the employee and his Union Steward will within
three (3) scheduled working days of the Step 1 discussion initiate
another discussion with his Supervisor. The Supervisor will provide his
response within three (3) working days after such discussion.
STEP 3. If the grievance is not settled in Step 2, it will be referred
within five (5) scheduled working days following the Step 2 discussion
to the area General Supervisor or designated representative who will
arrange a meeting to discuss the issue with the Chief Steward, the
Department Steward, and the Department Supervisor. The Company will
provide a response to the grievance at another meeting to be arranged
within three (3) scheduled working days of this meeting.
STEP 4. If the grievance is not resolved in Step 3, the matter will be
submitted within three (3) scheduled working days in writing to the
Human Resources Manager for discussion at the next monthly grievance
meeting. Such meeting shall occur on the Wednesday following the second
Tuesday of each month beginning at 1:30 p.m. and shall be attended by
two (2) members from the Company and two (2) members chosen by the
Union. This Committee shall attempt to resolve the grievance. The
Company will give the Union its final answer in writing within five (5)
scheduled working days of this meeting. If the parties decide an
additional monthly meeting is necessary, it will be scheduled at a
mutually convenient time.
STEP 5. If the grievance is not resolved in Step 4, the Federal
Mediation and Conciliation Service may be requested to supply a panel of
seven (7) Arbitrators by either party within two (2) weeks. The parties
will thereafter meet or otherwise confer to select the Arbitrator. The
Union and the Company shall each have the right to strike three (3)
names, the last remaining named person shall be the Arbitrator.
* Time limits set forth above may be extended by mutual written
agreement of the parties.
* The Arbitrator so selected shall schedule a prompt hearing at which
time he shall have the power to make determinations of facts of the
questions submitted to him and apply them to the provisions of the
Agreement alleged to have been violated.
* No arbitrator shall have the jurisdiction or authority to add to,
take from, nullify or modify any of the terms of this Agreement or
to impair any of the rights reserved to the parties under the terms
thereof.
* The decision of the Arbitrator shall be in writing and shall be
final and binding upon the Company, Union and the affected
employees.
* The Company and the Union shall be responsible for one-half of the
expenses and fees of an arbitrator designated under this Article.
2. Grievances pertaining to suspension and/or discharges will be taken to
Step 4 and will be discussed by the parties within five (5) scheduled
working days of their submittal, provided they were submitted within
five (5) scheduled working days by the aggrieved employee.
ARTICLE XVIII - VACATIONS
1. Wherever practical and feasible, the Company agrees that at least a
minimum of 5% of the employees per department will be allowed off in any
one workweek. In those years where the Company does not declare a
summer vacation shutdown, such minimum quota will be raised to 10% of
employees per department in any one workweek during the months of June,
July and August.
2. The Company shall grant one (1) week vacation with pay to all employees
who have one (1) year or more of continuous service on January 1 of the
vacation year.
a. The Company shall grant two (2) weeks vacation with pay to all
employees who have three (3) years or more of continuous service on
January 1 of the vacation year.
b. The Company shall grant three (3) weeks vacation with pay to all
employees who have nine (9) years or more of continuous service on
January 1 of the vacation year.
c. The Company shall grant four (4) weeks vacation with pay to all
employees who have seventeen (17) years or more of continuous
service on January 1 of the vacation year.
d. The Company shall grant five (5) weeks vacation with pay to all
employees who have twenty-five (25) years or more of continuous
service on January 1 of the vacation year.
e. Continuous service for vacation purposes is defined as actual
employment from January 1 through December 31.
3. Vacation may be scheduled by eligible employees by submitting a request
to their immediate supervisor for desired time off. All vacation
requests in increments of a full week or more must be submitted no later
than March 31st of the vacation year. If vacation requests are
submitted in writing prior to March 31st, they will be given on a first
come, first serve basis. Seniority shall take precedence only when such
vacation requests are received on the same day. Any vacation not
scheduled by August 1st will be scheduled by the department supervisor
and the employee involved. Vacation preferences will be honored on a
seniority basis. The Company, however, shall have the right to adjust
vacation preferences in order to meet its production requirements,
giving preference insofar as practical to seniority and employee's
preferences which may require eligible employees to reschedule vacations
to other periods.
4. For purposes of rescheduling vacations, employees should indicate their
vacation rescheduling preference in writing a minimum of thirty (30)
days prior to taking said vacation. Vacation rescheduling preference
will be granted on a first come, first serve basis. Seniority shall
take precedence only when such vacation rescheduling requests are
received on the same day.
5. The Company reserves the right to shut down operations for vacation
purposes, provided notice is given no later than February 28th of each
year.
6. Such shutdown shall occur during the period of June 15th through August
15th. Employees shall be obligated to take vacation during this period
except:
a. Any employee not eligible for vacation during this period will be
laid off if no work is available.
b. Employees required to work during this period may schedule their
vacations at other times, under the provisions of #4 of this
Article.
7. Holidays occurring within any employee's vacation period shall extend
such vacation time off at the employee's option. Such extension must be
used immediately preceding or following the vacation period.
If a holiday falls within a summer vacation shutdown, holiday pay for
such day will be added to the employee's vacation pay unless the
employee schedules an additional day off at another time. Such
additional day off must be scheduled within the guidelines as set forth
in Section 1 of this Article.
8. Vacations must be a minimum of five (5) consecutive workdays, except
that employees who are eligible for two (2) weeks of vacation may take
up to one (1) week, and employees that are eligible for three (3) weeks
or more of vacation may take up to two (2) weeks of vacation entitlement
one (1) day at a time provided they give at least one (1) week of
advance notice and that Company approval is given in each instance.
Where unusual circumstances are involved, the Company will consider less
than one (1) weeks notice, but in no event will approval be given for
day-at-a-time vacation when less than one (1) day of notice is provided.
Employees who request day-at-a-time vacation in accordance with the one
(1) week notice requirement and who are not advised about the status of
their request within two (2) days will automatically be granted the time
off they requested.
9. Vacation pay shall be computed on the basis of each individual
employee's W-2 earnings for the year:
a. Employees with more than one (1) and less than three (3) years of
continuous service shall receive two percent (2%) thereof;
b. Employees with three (3) or more years but less than nine (9) years
of continuous service shall receive four percent (4%) thereof;
c. Employees with nine (9) or more years but less than seventeen (17)
years of continuous service shall receive six percent (6%) thereof;
d. Employees with seventeen (17) or more years of continuous service
shall receive eight percent (8%) thereof; and
e. Employees with twenty-five (25) or more years of continuous service
shall receive ten percent (10%) thereof.
10. A vacation proration will be paid to any employee retiring under the
Morgan Pension Plan for Hourly Paid Employees and to beneficiaries of
employees who die while in the Company's employ. Such prorated vacation
pay will be calculated from January 1 immediately prior to an employee's
date of retirement or death at the applicable percentage rate.
11. Vacation pay shall be granted at the beginning of the vacation period.
Where an employee takes day-at-a-time vacation, he will receive his
vacation pay as part of his regular weekly check.
12. All earned vacation time off must be taken and paid out in the year
immediately following the vacation year in which it was earned. The
taking of vacation pay in lieu of time off shall not be permitted,
except as indicated in Section 7 of this Article.
13. Employees who are on medical leave one (1) month or longer will have the
opportunity to draw earned vacation pay during their medical leave. A&S
benefits will not be affected by the employees decision to use vacation
pay. Vacation will not be granted an employee returning from a leave of
absence of thirty (30) days or more until they have worked at least
sixty (60) days, unless mutually agreed to by the Company and the Union.
14. Earned untaken vacation from previous year will be granted to a
terminating employee.
15. Employees who because of their being laid off have not taken their
earned vacation from the previous year shall be issued a check for the
equivalent amount owed by the Company upon their recall and return to
work.
16. Employees who request a vacation from the Company and are not advised
within ten (10) days that said request is approved or denied will
automatically be granted the time off.
17. Any employee who has less than one (1) year of service as of January 1
will receive a prorated check and time off at the time of any vacation
shutdown.
ARTICLE XIX - FUNERAL LEAVE
1. In the event of the death of an employee's parent, spouse, child,
brother or sister, stepchild, mother-in-law or father-in-law, or
grandparents, an employee shall be granted a leave of absence of up to
three (3) regular working days commencing with the date of death and
ending with the first calendar day after the day of the funeral provided
that he attends the funeral. An employee granted such a leave shall be
paid his regular straight time hourly rate for eight (8) hours for such
days, provided said days are within the regular scheduled workweek of
Monday through Friday and are days which the employee otherwise would
have been scheduled to work. Before making any payment under this
Section, the Company may require proof, satisfactory to it, of the
employee's eligibility to receive a payment under this Section,
including proof of death and relationship.
2. In the event of the death of an employee's brother-in-law, sister-in-
law, half brother, half sister, grandchild, current step-parent, or
previously separated spouse provided there are dependent minor children,
the employee shall be granted a leave of absence for one (1) day to
attend the funeral of the deceased and shall be paid his regular
straight time hourly rate for eight (8) hours for such day, provided
said day is within the regularly scheduled workweek of Monday through
Friday and the employee otherwise would have been scheduled to work.
Before making any payment under this paragraph, the Company may require
proof satisfactory to it of the employee's eligibility to receive a
payment under this paragraph, including proof of death and relationship
and proof that the employee attended the funeral.
Any employee who falsifies information in order to collect pay under
these paragraphs shall be subject to immediate discharge.
ARTICLE XX - UNION LABEL
It is hereby understood and agreed by the Company and the Union that an
application shall be made for the Union Label to the First General Vice
President of the United Brotherhood of Carpenters and Joiners of America. If
the application is approved, and the Union Label is issued by the United
Brotherhood of Carpenters and Joiners of America to be placed upon the
Company's products, it is understood and agreed that the Label shall remain
the property of the United Brotherhood of Carpenters and Joiners of America
and shall be at all times in the possession of a member of the United
Brotherhood of Carpenters and Joiners of America; and, that said Union Label
shall at no time be used in any manner that will be detrimental to the
interest and welfare of the United Brotherhood. Use of said Label may be
withdrawn from the mill, factory or manufacturing establishment of the
Company at any time at the discretion of the International Union.
ARTICLE XXI - HEALTH AND WELFARE
1. The Company and the Union have agreed to a program of benefits for
employees in the bargaining unit represented by the Union and covered by
this Agreement.
2. The parties have agreed to a group insurance program for employees and
their dependents, a copy of which has been provided to the Union and
which will continue for the term of this Agreement.
3. The pension program is set forth in the document entitled Morgan
Products Ltd. Pension Plan for Hourly Paid Employees, a copy of which
has been given to the Union. Said plan and all terms and conditions
thereof shall be deemed to be part of this Agreement as if fully set
forth herein.
Subject to obtaining approval of the Internal Revenue Service, the
Company will amend said Pension Plan for employees who retire on or
after the following dates:
a. Effective May 7, 1995 -- increase pension $1.00 to $19.00
b. Effective May 5, 1996 -- increase pension $1.00 to $20.00
c. The Company will continue to pay the pensions which it is now
paying to retired employees who are not eligible for a pension
under the Morgan Products Ltd. Pension Plan for Hourly Paid
Employees in their present amounts.
4. The plan provides 100% vesting after five (5) years of continuous
service.
5. Ten (10) years of service and no age requirement is established for
disability retirement.
ARTICLE XXII - NO STRIKE -- NO LOCKOUT
1. NO STRIKE:
The Company and the Union agree that the grievance and arbitration
procedures provided herein shall be the sole and exclusive means of
resolving all grievances arising under the terms of this Agreement; and
further, that remedies and procedures provided by statute shall be the
sole and exclusive means of settling disputes between the employees and
the Company or between the Union and the Company. Accordingly, neither
the Union nor the employees in the bargaining unit will instigate,
promote, sponsor, engage in or condone any strike, slowdown, concerted
stoppage of work or any other intentional interruption of work over any
dispute involving the meaning, interpretation or application of the
provisions of this Agreement. In the event that any employee or group
of employees covered by this Agreement shall, during its term,
participate or engage in any of the activities herein prohibited, the
Union agrees immediately for the group of employees to cease such
activity and resume work at once. The Company shall have the right to
discharge or otherwise discipline any employee who engages in any of the
activities prohibited by this Article; such action will not be subject
to the grievance procedure.
2. NO LOCKOUTS:
During the term of this Agreement the Company will not lock out any of
its employees covered by this Agreement.
ARTICLE XXIII - EXTENT OF AGREEMENT AND WAIVER
1. The parties acknowledge that during the negotiations each had the
unlimited right to make demands with respect to any subject, and that
the understandings and agreements are set forth in this Agreement.
Therefore, the Company and the Union for the life of this Agreement each
voluntarily and unqualifiedly waives the right and each agrees that the
other shall not be obligated to bargain collectively with respect to any
subject or matter referred to or covered in this Agreement, even though
such subject or matter may not have been within the knowledge or
contemplation of either or both of the parties at the time they
negotiated or signed this Agreement.
2. It is agreed that this written contract reflects the entire Agreement
between the parties. Amendments or classifications of this Agreement
mutually agreed upon shall be reduced to writing, attached to, and shall
become a part of this contract.
3. Any provisions herein, be it a clause, paragraph, sentence, section or
Article, which in any way contravenes the laws of the United States or
of the State of Wisconsin as established by the Federal or State
Authority, shall be deemed not to be a part of this Agreement and the
remainder of the Agreement shall not be affected thereby.
ARTICLE XXIV - CONTINUOUS OPERATIONS
1. 24 Hour Normal Workweek Schedule
The Company has the right to schedule continuous operations whenever
customer demands, equipment limitations or process type operations
require such. Continuous operations will normally consist of a first
shift that works from 7:00 a.m. to 3:00 p.m., a second shift that works
from 3:00 p.m. to 11:00 p.m., and a third shift that works from 11:00
p.m. to 7:00 a.m. The normal workweek for this type of a 3-shift
operation will be Monday through Friday.
The Company agrees to allow one (1) ten minute paid break in the first
part of the shift and a twenty (20) minute paid lunch break. These
breaks may be staggered to meet production needs.
2. Continuous Seven (7) Day Voluntary Work Schedule
The only way the Company could go to a continuous work schedule is if
people presently working in or on that operation would volunteer.
People will not be forced out of their positions against their will.
People could be hired or voluntarily switched around from those
positions. New or idle equipment or jobs could be posted for continuous
operations. If no one volunteers or bids, people could be hired.
Also, the only penalty imposed on the employer in the form of premium
pay will be time and one-half pay for all work performed on Sunday and
shift premium.
ARTICLE XXV - TERMINATION OF CONTRACT
The parties hereto within sixty (60) days prior to May 10, 1998, shall begin
negotiations with each other for the purpose of considering the advisability
of extension or renewal of the Agreement upon the same terms as herein
contained or upon such terms as the parties may mutually agree. However, if
no Agreement is reached by May 10, 1998, this Agreement shall be at an end
unless the parties mutually agree to extend the life of this Agreement until
a new Agreement is reached.
FOR THE UNION: FOR THE COMPANY:
___________________________ __________________________
___________________________ ___________________________
___________________________ ___________________________
___________________________ ___________________________
___________________________
___________________________
Schedule A
EFFECTIVE: May 7, 1995, the following straight-time hourly rates will apply:
<TABLE>
<CAPTION>
Job Probationary/ Completion 181 Days* 271 Days* 366 Days* 455 Days* 545 Days*
Grade Starting of Probation 6 Months 9 Months 12 Months 15 Months 18 Months
<S> <C> <C> <C> <C> <C> <C> <C>
Helper 7.97 8.15 8.63 8.87 9.11 9.35 9.89
1 8.48 8.69 9.20 9.45 9.71 9.96 10.52
2 8.52 8.74 9.25 9.51 9.77 9.98 10.58
3 8.32 8.84 9.36 9.62 9.88 10.14 10.70
4 8.42 8.95 9.48 9.74 10.00 10.26 10.83
5 8.52 9.05 9.59 9.85 10.12 10.38 10.95
6 8.64 9.18 9.72 9.99 10.26 10.53 11.10
7 8.76 9.31 9.86 10.13 10.40 10.67 11.25
8 8.88 9.44 9.99 10.27 10.55 10.82 11.40
9 9.00 9.56 10.13 10.41 10.69 10.97 11.55
10 9.14 9.72 10.29 10.58 10.88 11.15 11.73
11 9.28 9.86 10.44 10.73 11.02 11.31 11.90
12 9.73 10.34 10.94 11.25 11.55 11.85 12.46
*Continuous calendar days from date of hire
Schedule A-Maintenance
Skilled Maint
w/o J'man Card
4 yrs. exp. 9.94 10.56 11.18 11.49 11.80 12.11 12.42
6 yrs. exp. 10.56 11.22 11.88 12.21 12.54 12.87 13.20
8 yrs. exp. 11.30 12.00 12.71 13.06 13.41 13.77 14.12
Skilled Maint
w/o J'man Card: 11.30 12.00 12.71 13.06 13.41 13.77 14.12
1-2 yrs. exp. 11.66 12.39 13.12 13.49 13.85 14.22 14.58
2+ yrs. exp. 12.04 12.79 13.55 13.93 14.30 14.68 15.05
Skilled
Maint Tec 12.04 12.79 13.55 13.93 14.30 14.68 15.05
1-2 yrs. exp. 12.26 13.03 13.80 14.18 14.56 14.95 15.33
2+ yrs. exp. 12.49 13.27 14.05 14.44 14.83 15.22 15.61
Maintenance Apprenticeship Program
1st year 11.55
2nd year 11.73
3rd year 11.90
4th year 12.70
5th year 13.20
</TABLE>
Schedule B
EFFECTIVE: May 5, 1996, the following straight-time hourly rates will apply:
<TABLE>
<CAPTION>
Job Probationary/ Completion 181 Days* 271 Days* 366 Days* 455 Days* 545 Days*
Grade Starting of Probation 6 Months 9 Months 12 Months 15 Months 18 Months
<S> <C> <C> <C> <C> <C> <C> <C>
Helper 7.87 8.15 8.63 8.87 9.11 9.35 10.14
1 6.18 8.69 9.20 9.45 9.71 9.96 10.77
2 8.22 8.74 9.25 9.51 9.77 9.98 10.83
3 8.32 8.84 9.36 9.62 9.88 10.14 10.95
4 8.42 8.95 9.48 9.74 10.00 10.26 11.08
5 8.52 9.05 9.59 9.85 10.12 10.38 11.20
6 8.64 9.18 9.72 9.99 10.26 10.53 11.35
7 8.76 9.31 9.86 10.13 10.40 10.67 11.50
8 8.88 9.44 9.99 10.27 10.55 10.82 11.65
9 9.00 9.56 10.13 10.41 10.69 10.97 11.80
10 9.14 9.72 10.29 10.58 10.86 11.15 11.98
11 9.28 9.86 10.44 10.73 11.02 11.31 12.15
12 9.73 10.34 10.94 11.25 11.55 11.85 12.71
*Continuous calendar days from date of hire
</TABLE>
Schedule B-Maintenance
<TABLE>
<CAPTION>
Skilled Maint
w/o J'man Card
<S> <C> <C> <C> <C> <C> <C> <C>
4 yrs. exp. 10.37 11.02 11.66 11.99 12.31 12.64 12.96
6 yrs. exp. 11.00 11.69 12.38 12.72 13.06 13.41 13.75
8 yrs. exp. 11.75 12.49 13.22 13.59 13.96 14.33 14.69
Skilled Maint
w/o J'man Card: 11.75 12.49 13.22 13.59 13.96 14.33 14.69
1-2 yrs. exp. 12.14 12.89 13.65 14.03 14.41 14.79 15.17
2+ yrs. exp. 12.52 13.30 14.09 14.48 14.87 15.26 15.65
Skilled Maint Tec 12.52 13.30 14.09 14.48 14.87 15.26 15.65
1-2 yrs. exp. 12.74 13.54 14.34 14.74 15.13 15.53 13.93
2* yrs. exp. 12.98 13.79 14.60 15.01 15.41 15.82 16.22
</TABLE>
Maintenance Apprenticeship Program
1st year 11.80
2nd year 11.98
3rd year 12.15
4th year 12.95
5th year 13.45
Schedule C
EFFECTIVE: May 4, 1997, the following straight-time hourly rates will apply:
<TABLE>
<CAPTION>
Job Probationary/ Completion 181 Days* 271 Days* 366 Days* 455 Days* 545 Days*
Grade Starting of Probation 6 Months 9 Months 12 Months 15 Months 18 Months
<S> <C> <C> <C> <C> <C> <C> <C>
Helper 7.67 8.15 8.63 8.87 9.11 9.35 10.39
1 8.18 8.69 9.20 9.45 9.71 9.96 11.02
2 8.22 8.74 9.25 9.51 9.77 9.98 11.08
3 8.32 8.84 9.36 9.62 9.88 10.14 11.20
4 8.42 8.95 9.48 9.74 10.00 10.26 11.33
5 8.52 9.05 9.59 9.85 10.12 10.38 11.45
6 8.64 9.18 9.72 9.99 10.26 10.53 11.60
7 8.76 9.31 9.86 10.13 10.40 10.67 11.75
8 8.88 9.44 9.99 10.27 10.55 10.82 11.90
9 9.00 9.56 10.13 10.41 10.69 10.97 12.05
10 9.14 9.72 10.29 10.58 10.88 11.15 12.23
11 9.28 9.88 10.44 10.73 11.02 11.31 12.40
12 9.73 10.34 10.94 11.25 11.55 11.85 12.96
*Continuous calendar days from date of hire
</TABLE>
Schedule C-Maintenance
<TABLE>
<CAPTION>
Skilled Maint
w/o J'man Card
<S> <C> <C> <C> <C> <C> <C> <C>
4 yrs. exp. 10.80 11.48 12.15 12.49 12.83 13.17 13.50
6 yrs. exp. 11.44 12.16 12.87 13.23 13.59 13.95 14.30
8 yrs. exp. 12.21 12.97 13.73 14.12 14.50 14.88 15.26
Skilled Maint
w/o J'man Card: 12.21 12.97 13.73 14.12 14.50 14.88 15.26
1-2 yrs. exp. 12.60 13.39 14.18 14.57 14.96 15.36 15.75
2+ yrs. exp. 12.99 13.80 14.62 15.03 15.43 15.84 16.24
Skilled Maint Tec 12.99 13.60 14.62 15.03 15.43 15.84 16.24
1-2 yrs. exp. 13.22 14.05 14.88 15.29 15.70 16.12 16.53
2+ yrs. exp. 13.46 14.31 15.15 15.57 15.99 16.41 16.63
</TABLE>
Maintenance Apprenticeship Program
1st year 12.05
2nd year 12.23
3rd year 12.40
4th year 13.20
5th year 13.70
SCHEDULE "D"
LIFE INSURANCE,
ACCIDENTAL DEATH & DISMEMBERMENT (AD&D),
AND WEEKLY INDEMNITY (A&S) BENEFITS
Life Insurance and AD & D:
Employee
(5/7/95) $16,000
Employee
(5/5/96) $16,000
Employee
(5/4/97) $17,000
(AD&D amount is equal to current amount of life insurance in effect)
Employees can purchase an additional amount of life insurance and an
additional amount of AD&D equal to the amount in force at a rate of $0.24
per thousand per month.
Life Insurance
Spouse $6,000
Each
Dependent $3,500
Weekly Indemnity (A&S):
Weekly benefit eligibility: lst day accident, lst day hospitalization, or
8th day sickness; up to 26 weeks of eligibility.
Effective May 7, 1995 - $200 per week
Effective May 5, 1996 - $205 per week
Effective May 4, 1997 - $210 per week
SCHEDULE "E"
HOLIDAY SCHEDULE
In reference to ARTICLE IV, holidays will be observed on the following dates
during the term of this Agreement:
1995 1996 1997 1998
New Year's Day 12/30/94 (F) 1/1 (M) 1/1 (M) I /1 (R)
Good Friday 4/14 (F) 4/5 (F) 3/28 (F) 4/1 0 (F)
Floating Holiday Floating Floating Floating Floating
Memorial Day 5/29 (M) 5/27 (M) 5/26 (M)
Independence Day 7/4 (T) 7/4 (R) 7/4 (F)
Labor Day 9/4 (M) 9/2 (M) 9/1 (M)
Thanksgiving Day 11/23 (R) 11/28 (R) 11/27 (R)
Day after
Thanksgiving 11/24 (F) 11/29 (F) 11/28 (F)
Christmas Eve 12/26 (T) 12/24 (T) 12/24 (W)
Christmas Day 12/25 (M) 12/25 (W) 12/25 (R)
New Year's Eve 01/02/96 (T) 12/31 (T) 12/31 (W)
SCHEDULE "F"
SKILLED TRADES ALLOWANCE
The Company will provide a Skilled Trades Allowance in the amount of $150 per
contract year for the duration of this Agreement. This Allowance will be
granted to each Maintenance employee Labor Grade 8 and above and will be used
for tools required for their jobs, tooling replacements, educational
supplies, protective clothing, etc.
SCHEDULE "G"
LEAD PAY RATES
Effective: May 7, 1995 the following lead pay rate will apply:
$0.50 per hour in addition to the straight time hourly
rate.
Effective: May 5, 1996 the following lead pay rate will apply:
$0.65 per hour in addition to the straight time hourly
rate.
Effective: May 4, 1997 the following lead pay rate will apply:
$0.80 per hour in addition to the straight time hourly
rate.
Exhibit 10.23
LABOR AGREEMENT
This Agreement, dated this 21th day of May, 1995, made and entered into by
and between Morgan Products Ltd., hereinafter referred to as the "Company", and
Teamsters "General", Local Union No. 200, hereinafter referred to as the
"Union."
ARTICLE I - UNION RECOGNITION
The Union shall be the sole collective bargaining representative of all
truck drivers in the employ of the Company.
The Company has the right of employing all new employees. New employees,
during the first sixty (60) day period of employment, shall be considered as
probationary employees subject to the sole judgment of the Company as to their
retention or dismissal. The Company shall have no obligation to re-employ
probationary employees laid off during said sixty (60) days. Employees retained
at the expiration of their probationary period shall be considered regular
employees and be credited with sixty (60) days of seniority.
The Company agrees that as a condition of employment all eligible employees
shall become members of the Union within sixty (60)days after the execution of
this Agreement or within sixty (60) days after his hire, as the case may be.
All employees who become members of the Union shall remain members of the Union
during the life of the Agreement by tendering the periodic dues, initiation
fees, and uniform assessments required as a condition of acquiring and
maintaining membership.
The Company will, for those employees who desire it, deduct the monthly
dues, initiation fees and uniform assessments as now approved by the
International Union from the employees first pay check of each month. Employees
shall signify their desire for the said deduction by an individual authorization
card signed by the employee. Said deduction shall continue for the life of this
Agreement and shall endure from year to year thereafter provided that at the
expiration of this and any subsequent Agreement between Morgan Products Ltd. and
Teamsters "General", Local Union No. 200 there shall be a sixty (60) day, but
not more than seventy-five (75) day, escape period during which the employee may
rescind his authorization for such deductions by written notice to both the
Company and the Union. Deductions thus made shall be mailed to the duly
authorized officer of the Union within five (5) days after such deductions are
made.
The Union agrees to hold the Employer harmless for any action required to
be taken by the Employer pursuant to the provisions of this Article of the
Agreement that has been required of the Employer by the Union in writing.
ARTICLE II - LEAVE OF ABSENCE
Reasonable leave of absence, up to but not to exceed thirty (30) days, may
be granted to any employee in case of any justifiable cause. Absence from duty
because of Union business may be granted without pay by the Company provided
sufficient notice is given to the Company and provided that such absence does
not interfere with plant operations.
Any employee desiring a leave of absence, or an extension of a leave of
absence, from the job shall secure written permission from the Company. Failure
to comply with this provision from the Company shall result in complete loss of
seniority rights of the employee involved. Inability to work because of proven
sickness or injury shall not result in the loss of seniority rights.
ARTICLE III - DISCHARGE
Before discharge, the employee shall be given one (1) warning notice: such
notice shall not remain in effect for a period of more than twelve (12) months,
and shall be in writing with a copy to the Union, except no warning notice is
needed if discharge is due to dishonesty, drunkenness, or recklessness while on
duty, abusing equipment or the carrying of unauthorized passengers.
Any employee may request an investigation as to the discharge. Should such
investigation prove that an injustice has been done an employee, he shall be
reinstated and compensated at his usual rate of pay while he has been out of
work. Appeal from discharge must be taken within ten (10) workdays by written
notice and a decision reached within fifteen (15) workdays from the date of
discharge. If no decision has been reached within fifteen (15) workdays, the
case shall then be taken up as provided for in Article IV of this Agreement.
ARTICLE IV - GRIEVANCE AND ARBITRATION
For the purpose of this Agreement, a grievance is defined as any dispute or
disagreement between an employee or employees and the Company or the Union and
the Company as to the interpretation or application of this Agreement. All
grievances shall be resolved in an orderly manner as provided in this Article.
STEP 1. An employee grievance shall first be taken up by conference
between the aggrieved employee and the Supervisor.
STEP 2. If the grievance is not settled in Step 1, it shall be the
responsibility of the aggrieved employee to reduce any grievance to writing on
the regular grievance form not later than ten (10) working days from the Step 1
conference and submit it to the Supervisor. The Supervisor will set up a
meeting between the grievant and an officials of the Union, along with
Supervisor and the Human Resources Representative within five (5) working days.
STEP 3. If the grievance is not resolved in Step 2, the Federal Mediation
and Conciliation Service may be requested to supply a panel of seven (7)
Arbitrators by either party within two (2) weeks. The parties will thereafter
meet or otherwise confer to select the Arbitrator. The Union and the Company
shall each have the right to strike three (3) names, the last remaining named
person shall be the Arbitrator.
- - Time limits set forth above may be extended by mutual written agreement of
the parties.
- - The Arbitrator so selected shall schedule a prompt hearing at which time he
shall have the power to make determinations of facts of the questions submitted
to him and apply them to the provisions of the Agreement alleged to have been
violated.
- - No arbitrator shall have the jurisdiction or authority to add to, take
from, nullify or modify any of the terms of this Agreement or to impair any of
the rights reserved to the parties
under the terms thereof.
- - The decision of the Arbitrator shall be in writing and shall be final and
binding upon the Company, Union and the affected employees.
- - In the event an arbitrator awards back pay, the following shall govern: Any
Unemployment Compensation received by the employee or interim earnings verified
by the Company shall be
applied to offset any back pay.
- - The Company and the Union shall be responsible for one-half of the expenses
and fees of an arbitrator designated under this Article.
There shall be no authorized strikes or lockouts during the life of this
Agreement.
ARTICLE V - POST NOTICE
The Union shall have the right to post notice of meetings and other Union
activities in Company garages and employees lunchrooms, or on the Company's
bulletin board.
ARTICLE VI - NO OTHER AGREEMENT
The Company agrees that no employee will be asked to make any written or
verbal contract which may in any way conflict with the terms of this Agreement.
ARTICLE VII - UNION BUSINESS
The Company recognizes the right of the Union to designate a shop steward
to handle such Union business as may from time to time be delegated to him by
the Union officials. All time so spent by the Union representative shall be
paid for by the Company at the affected employee's regular rate of pay if such
meeting is held during regular working hours on Company property.
ARTICLE VIII - SENIORITY
Seniority rights by classification shall prevail. A seniority list of
employees covered by this Agreement shall be furnished to the Union on request.
Any controversy over the seniority standing of any employee on this list shall
be referred to the Union and the Company for settlement.
In reducing the personnel because of lack of work, the last employee hired
shall be the first laid off; and in returning to work, the last employee laid
off shall be the first to be rehired, provided that the more senior employee is
qualified to do the available work. In no case shall any new employees be hired
until all old employees are reinstated. In case it is proven an employee
younger in seniority performs work when an employee or employees older in
seniority are laid off, then all such employees older in seniority shall be
entitled to pay for such time worked. In slack periods, employees older in
point of seniority shall be entitled to available work in the jurisdiction of
Teamsters "General" Local Union No. 200. In filling vacancies or making
promotions, preference shall be given to employees according to their seniority
standing, wherever qualified.
All new jobs, vacancies or promotions shall be posted for seven (7) work
days prior to operating.
LOSS OF SENIORITY: Any employee's seniority and employment shall terminate
upon the occurrence of any of the following:
a) Discharge or voluntary quitting of employment;
b) Failure to report for work after a layoff within five (5) calendar
days after a written notice of recall has been sent by the Company to the
employee at his/her last known address on record in the employee's
personnel file, with a copy sent to the Union, unless the employee is
prevented from so reporting by illness or other satisfactory reason and
notifies the Company within the above stated five (5) calendar days of such
conditions;
c) Absence from work due to layoff or absence due to bona fide injury or
illness which renders the employee incapable to work shall retain seniority
if he returns to work within thirty-six (36) consecutive months after the
absence commenced, or within a period equal to the seniority which he had
when the absence commenced, whichever is shorter;
d) Absence from work for two (2) consecutive workdays without notifying
the Company, except in cases where it is impossible to notify the Company
and such impossibility is supported by evidence presented by the employee
which is satisfactory to the Company;
e) Absence exceeding the period for which a leave of absence has been
granted or extended unless the employee's excuse is satisfactory to the
Company;
f) Acceptance of other employment while on leave of absence unless agreed
in writing by the Company;
g) Retirement.
ARTICLE IX - HOURS OF WORK
It is understood that over-the-road operations come under the Jurisdiction
of the Interstate Commerce Commission and that the daily and weekly hours of
work shall be governed by the rules and regulations of the Commission.
Double time shall be paid for all work performed on Sunday.
ARTICLE X - WAGES AND CLASSIFICATIONS
The classifications and rates of pay shall read as follows:
SEMI TRUCK DRIVERS --
Effective May 21, 1995 $.37 cent increase to $13.18/hr
Effective May 19, 1996 $.32 cent increase to $13.48/hr
Effective May 18, 1997 $.32 cent increase to $13.80/hr
It is understood and agreed that there may not be work to keep the truckers
employed at all times and that the operators of such trucks may perform such
other work as may be directed by the Company.
Over-the-road semi-truck drivers shall receive a night allowance of up to
$43.00 for lodging and other expenses incurred for any night spent away from
home in connection with services for the Employer. Such drivers shall receive
eight (8) hours of pay for each twenty-four (24) hours of layover where such
layover is due to unforeseen circumstances such as storm or breakdown or other
conditions beyond the control of the employee.
ARTICLE XI - HOLIDAYS
The following shall be observed as holidays: New Year's Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day, the day after
Thanksgiving, the day before Christmas, Christmas Day and the day before New
Year's Day. Each year of this contract there will be a floating holiday which
will be mutually agreed to between the driver and the Company.
All full-time employees who have acquired seniority shall receive eight (8)
hours at their respective base rates for the day on which the holiday is
observed or celebrated. If a holiday falls within a vacation period, an
additional eight (8) hours of pay at the employee's straight-time base rate will
be paid to those employees with acquired seniority. Any employee refusing to
work on any of the above named holidays when requested shall not be
discriminated against for such acts. Any work performed on the above mentioned
holidays shall be paid for at double-time the employee's regular base rate of
pay for all hours worked in addition to the holiday pay.
Holiday pay shall be paid only to the employees who work the scheduled
workday preceding and the scheduled workday following the holiday except in
cases of proven illness or excused absence.
In order for an employee to qualify for holiday pay, he must be in the employ of
the Company for a period of not less than sixty (60) days prior to the holiday.
This shall only apply to new employees who are serving their sixty (60) day
probationary period. Eight (8) hours shall be used for computing weekly over-
time for each holiday. This only applies to non-semi drivers.
If a holiday occurs within thirty (30) days of the date of employee layoff,
said employee shall receive holiday pay.
ARTICLE XII - CALL-IN PAY
Employees shall be guaranteed four (4) hours of call-in pay if not put to
work when called and eight (8) hours when put to work. This shall not apply in
cases of breakdown or events beyond the control of management, or where it is
necessary to call in a driver to secure his equipment that should have been
secured in his prior tour of duty.
When the Company requires movement of equipment within the Company's
facility and/or maintenance points, it is mutually agreed that the driver will
be guaranteed a minimum of four (4) hours of pay or actual time worked, if
greater.
ARTICLE XIII - VACATIONS
All employees covered by this Agreement who have been employed for one (1)
year shall receive one (1) week of vacation with pay, two (2) weeks of vacation
with pay after three (3) years of employment, three (3) weeks of vacation with
pay after eight (8) years of employment, four (4) weeks of vacation with pay
after fifteen (15) years of employment, and five (5) weeks of vacation with pay
after twenty-five (25) years of employment. Said employment is to be with
uninterrupted seniority.
Vacation pay shall be computed on the basis of each individual employee's
W-2 earnings for the previous year:
1 weeks - 2%
2 weeks - 4%
3 weeks - 6%
4 weeks - 8%
5 weeks - 10%
During the first year of employment, the employee must work sixty percent
(60%) of the total working days in order to obtain his vacation and must have
been employed for the full year. During the second and subsequent years, the
employee must have worked sixty percent (60%) of the total working days of the
year but need not be employed for the full year to be eligible for the vacation.
No more than one vacation will be earned in any twelve (12) month period.
Continuous service for vacation purposes is defined as actual employment
from January 1 through December 31. See Schedule "C" explaining transition from
existing dates to calendar year.
All vacations earned must be taken by employees and no employee shall be
entitled to vacation pay in lieu of vacation.
The vacation period shall be bid by seniority. Employees shall be allowed
to split their vacations by weeks if they so desire.
The Employer agrees to allow 15% of his employees with a minimum of one (1)
off in any one week for vacation.
When a holiday falls in a vacation week, the employee shall receive an
extra day's pay.
The Employer shall have the right to designate one (1) week of earned
vacation to be used during a plant shutdown. Notice of which week the plant
will be shut down and the vacation week which will be used shall be given to the
employees as soon as management makes the determination.
Employees who do not have earned vacation will be eligible for Unemployment
Compensation.
Based on the fact that management may be required to service its customers
or obtain needed supplies during the plant shutdown, required driving work shall
be offered by seniority to the employees. If all drivers refuse the work,
management shall have the right to force employees to work from the bottom up.
Those employees who work shall be given a full week's work or pay and shall
select another week of vacation that does not interfere with another employee's
prior picked vacation.
ARTICLE XIV - HEALTH AND WELFARE
The parties have agreed to a program of benefits for employees in the bargaining
unit and their dependents, a copy of which has been provided to the Union.
ARTICLE XV - EQUIPMENT, ACCIDENTS AND REPORTS, DANGEROUS WORK
SECTION 1: UNSAFE EQUIPMENT
The Employer shall not require employees to take out on the streets or
highways any vehicle that is not in safe operating condition or equipped with
the safety appliances prescribed by law. It shall not be a violation of this
Agreement where employees refuse to operate such equipment unless such refusal
is unjustified.
SECTION 2: ACCIDENT REPORT
Any employee involved in any accident shall immediately report said
accident and any physical injury sustained. When required by his Employer, the
employee, before starting his next shift, shall make out an accident report in
writing on forms furnished by the Employer and shall turn in all available names
and addresses of witnesses to any accidents. Failure to comply with this
provision shall subject such employee to disciplinary action by the Employer.
SECTION 3: DEFECTIVE EQUIPMENT
Employees shall immediately, or at the end of their shift, report all
defects of equipment. Such reports shall be made on a suitable form furnished
by the Employer and shall be made in multiple copies, one copy to be retained by
the employee. The Employer shall not require any employee to take out equipment
that has been found to be in an unsafe operating condition until the same has
been approved as being safe by the lessor.
When the occasion arises where an employee gives written report on forms
issued by the Employer alleging a vehicle to be in an unsafe working/operating
condition, with which the Employer disagrees, he shall report the matter to the
officers of the Union who will discuss the matter with the Employer.
ARTICLE XVI - PENSION
1. Effective upon the initiation of this agreement, the Employer shall
contribute to the Central States, Southeast and Southwest Areas Pension Fund for
Schedule B, the sum of $44.00 per week for each employee covered by this
Agreement who has been on the payroll thirty (30) days or more. Effective May
22, 1994, said amount shall be increased to $49.00.
2. This Fund shall be the Central States, Southeast and Southwest Areas
Pension Fund. There shall be no other pension fund under this Agreement.
3. By the execution of this Agreement, the Employer binds itself and becomes
party to the Trust Agreement establishing the Central States, Southeast and
Southwest Areas Pension Fund and authorizes the Employer parties thereto to
designate the Employer Trustees as provided under such Agreement, hereby waiving
all notice thereof and ratifying all actions already taken or to be taken by
such Trustees within the scope of their authority.
4. If an employee is absent because of illness or off-the-job injury and
notifies the Employer of such absence, the Employer shall continue to make the
required contributions for a period of four (4) weeks. If an employee is
injured on the job, the Employer shall continue to pay the required
contributions until such employee returns to work; however, such contributions
shall not be paid for a period of more than twelve (12) months.
5. Action for delinquent contributions may be instituted by either the Local
Union, the Joint Council or the Trustees. Employers who are delinquent must
also pay all attorney fees and costs of collections.
6. The Company will provide group insurance coverage for any Company employee
retiring under the pension program at the employee's expense. A copy of the
current plan has been provided to the Union.
ARTICLE XVII - FUNERAL LEAVE
1. In the event of a death in the family, a regular employee will receive up
to three (3) days off with pay to attend the funeral, provided that the funeral
occurs within the employee's regularly scheduled workweek.
2. The employee's family, for the purposes of section 1, shall mean father,
mother, father-in-law, mother-in-law, wife, husband, brother, sister, son or
daughter, stepchild, grandfather and grandmother.
3. In the event a regular employee's sister-in-law or brother-in-law dies,
said regular employee shall receive one (1) day off with pay to attend said
funeral, provided that the funeral occurs within the employee's regularly
scheduled workweek.
4. The employee must be prepared to show proof of attendance at such funeral
if the Company requests proof.
ARTICLE XVIII - MERGER OR TRANSFER
The Employer shall not hire or use extra equipment, other than motor vehicle
common carriers, unless his own usable equipment is in use. Drivers of other
Employers on trucks hired or contracted for by the Employer, other than motor
vehicle common carriers, shall receive not less than the same conditions and
terms of this Agreement.
ARTICLE XIX - JURY PAY
1. The Employer agrees to pay the difference between jury pay and the eight
(8) hour day for each day of jury duty.
2. The employee may be required to show proof of jury duty if required by the
Employer.
3. The employee shall report for work if released from jury duty by 12:00
noon.
ARTICLE XX - MANAGEMENT RIGHTS
Except as otherwise specifically provided in this Agreement, the management
of the Employer's establishment and shop and the direction of the working
forces, including but not limited to the right to hire, suspend, discipline or
discharge for cause and the right to maintain order and efficiency; the right to
reduce the working force or relieve employees from duty because of lack of work
or other legitimate reasons; the right to select sources of materials, equipment
and the Employer's customers; the right to schedule work, shifts, shift hours
and overtime requirements; the right to determine the products to be
manufactured, purchased, handled or sold, and the means, methods, processes and
schedules of production thereof; the right to introduce new or improved methods
or facilities, when and in such manner as it deems it advisable to do so; and
the exercise of such other management prerogatives as are not explicitly
restricted by the expressed terms of this Agreement shall be vested exclusively
in the Employer.
ARTICLE XXI - NON-DISCRIMINATION
The Company and the Union separately and jointly agree that all terms and
conditions of this Agreement will be applied equally to all employees regardless
of age, race, creed, color, sex, disability, or national origin. Wherein the
text of this Agreement words of masculine gender are used, they shall be in-
terpreted to denote either masculine or female gender.
The Company will adhere to and administer all applicable state and federal
employment laws.
ARTICLE XXII - PROTECTION OF RIGHTS
Employees shall not be required to make deliveries or pickups which involve
crossing lawful primary picket lines. In such cases, the employee shall
immediately report to his dispatcher by telephone for instructions.
The Company agrees to waive its rights to collect damages against the Union
in the event of an illegal work stoppage only if the following conditions are
met:
The Union will --
a) Notify all employees immediately in the event of an illegal work
stoppage that the stoppage is unauthorized and in violation of the
contract;
(b) State in writing to employees that the strike is in violation of the
Agreement;
(C) Make every reasonable effort possible to induce employees to cease
such acts.
ARTICLE XXIII - SEPARABILITY CLAUSE
If any Article or Section of this Agreement shall be held invalid by
operation of law or by any Tribunal of competent jurisdiction, or if compliance
with or enforcement of any Article or Section should be restrained by the
Tribunal pending a final determination as to its validity, the remainder of this
Agreement and the application of such Article or Section to persons or
circumstances other than those as to which it has been held invalid or as to
which compliance with or enforcement of has been restrained shall not be
affected thereby. In either of the events set forth above, the parties affected
thereby shall enter into immediate collective bargaining negotiations, upon
request, for the purpose of arriving at a mutually satisfactory replacement for
such Article or Section during the period of invalidity or restraint.
ARTICLE XXIV - TERMINATION
This Agreement shall remain in full force and effect from May 21, 1995
until 12:01 a.m. on May 24, 1998, unless not less than sixty (60) days prior to
any date of expiration notice is given in writing to the other party by the
party desiring a change of termination.IN WITNESS WHEREOF, the parties hereto
have hereunto set their hands and seals
this XXth day of July, 1995.
FOR THE COMPANY: FOR THE UNION:
James A. Logerquist Jerry Loop
Paul F. Yenter
Exhibit 10.24
AGREEMENT
BETWEEN
MORGAN PRODUCTS, LTD.
MORGAN DISTRIBUTION - DIVISION
DECATUR DISTRIBUTION CENTER
DECATUR, ILLINOIS
AND
TEAMSTERS LOCAL NO. 279 OF DECATUR, ILLINOIS
AFFILIATED WITH THE INTERNATIONAL BROTHERHOOD OF
TEAMSTERS, AFL-CIO
JULY 15, 1995
AGREEMENT
This Agreement, dated July 15, 1995, is between Morgan Distribution, a division
of Morgan Products Ltd. - Decatur Distribution Center, Decatur, Illinois, or its
successors (hereinafter referred to as the "Company"), and the Teamsters Union
Local 279 of Decatur, Illinois, affiliated with the International Brotherhood of
Teamsters, AFL-CIO, or its successors (hereinafter referred to as the "Union").
ARTICLE I - RECOGNITION
SECTION 1
The Company agrees to recognize, and does hereby recognize the Union, its
agents, representatives, or successors, as the exclusive bargaining agency for
all of the employees of the Company as herein defined.
SECTION 2
The term "employee" as used in this Agreement shall include all truck drivers.
SECTION 3
The Company will neither negotiate nor make collective bargaining agreements for
any of its employees in the bargaining unit covered hereby unless it be through
duly authorized representatives of the Union.
SECTION 4
The Company agrees that it will not sponsor or promote, financially or
otherwise, any group or labor organization for the purpose of undermining the
Union; nor will it interfere with, restrain, coerce or discriminate against any
of its employees in connection with their membership in the Union.
SECTION 5 - NON-DISCRIMINATIONS
The provisions of this agreement shall be applied by the Company and the Union
without discrimination with regard to age, race, color, creed, sex, handicap,
national origin, or religion, with respect to selection, placement, Union
membership, training, promotion, wage rates, and other conditions of employment.
Wherein the test of this agreement, words of masculine gender are used, they
shall be interpreted to denote neither masculine nor female gender.
ARTICLE II - UNION SHOP
SECTION 1
The Union shall be the sole collective bargaining agent for all truck drivers
employed by Morgan Distribution-Decatur, Illinois. The Company agrees that all
such employees shall become and remain members of the Union at the end of a
forty-five (45) worked days probationary period, which is subject to extension
upon request by the Company and Union concurrence as a condition of continued
employment. During such probationary period the Company is free to discharge an
employee with or without cause. At the end of such forty-five (45) worked days
period, the employee shall be placed on the regular seniority list with the
seniority starting from the first day of employment. If an employee, after the
forty-five (45) worked days trial period and extension, is a non-member of the
Union, he shall make application for membership within forty-eight (48) hours
and have his dues and initiation fee paid within sixty (60) days after initial
date of employment, and shall keep his dues paid up to date as a condition of
employment.
SECTION 2
When the Company needs additional men it shall give the Local Union equal
opportunity with all other sources to provide suitable applicants, but the
Company shall not be required to hire those referred by the Local Union.
SECTION 3
Casual drivers who work forty-five (45) days within the twelve (12) month period
will be required to become a member of the Union upon completion of the forty-
fifth (45th) day of work.
ARTICLE III - CHECK OFF
SECTION 1
The Company agrees to deduct each month from the pay checks of all employees who
are members of the Union, and who are covered by this Agreement, all dues and
initiation fees owed to the Teamsters Local Union No. 279 or its successors;
provided, however, that the employee shall have signed and submitted a notice
authorizing such action.
All dues and initiation fees deducted by the Company shall be forwarded to the
President of the Union.
SECTION 2
It is understood and agreed that any monies collected by the Company for the
Union will be taken out of the first pay period of each month for the following
month and remitted to the Union within five (5) days.
SECTION 3
The Union shall indemnify and save the Company harmless against any and all
claims, demands, suits or other forms of liability that shall arise out of or by
reason of action taken or not taken by the Company in reliance upon written
assignments furnished to the Company by the Union or for the purpose of
complying with any of the provisions of this Article.
ARTICLE IV - MAINTENANCE OF STANDARDS
The Company agrees that all conditions of employment relating to wages, hours of
work, overtime differentials and general working conditions shall be maintained
at not less than the highest minimum standards of the Company in effect at the
time of the signing of this Agreement.
It is agreed that this written contract reflects the entire Agreement between
the parties. Amendments or clarification of this Agreement mutually agreed upon
shall be reduced to writing, attached to, and shall become part of this
contract.
ARTICLE V - WAGES
Wages shall be paid according to "Appendix A" attached hereto and made a part of
this Agreement.
ARTICLE VI - SENIORITY
SECTION 1
In case of the reduction of the force or promotions, the senior man shall have
preference when the fitness, efficiency and ability of the men to perform the
work available are equal.
In any layoff, management will advise the Shop Steward of the individuals to be
affected as far in advance as possible.
In recalls, seniority and ability shall govern. Any employee that is laid off
shall be notified to report for work by certified mail or telephone, followed by
a certified letter. The employee so notified to report for work, and not
reporting within seven (7) days, shall be considered as refusing to return to
work and will be dropped from the recall list. It is the duty of each employee
to keep the Plant Superintendent informed as to his correct mail address and
telephone number.
SECTION 2
The list of employees rated according to seniority is attached hereto and made a
part of this Agreement. The Company will provide a seniority list when any
change occurs but not greater than once a month to the Union office and Shop
Steward. The seniority list shall be posted on the bulletin board.
SECTION 3
Beginners shall obtain seniority after forty-five (45) worked days of
employment, providing an extension has not been requested by the Company and
received Union concurrence. In case of layoffs, the Company shall lay off such
beginners before putting into effect the seniority policy, as stated above.
Beginners, after having fulfilled forty-five (45) worked days of continuous
service, shall date their seniority from the date they were last employed,
providing an extension of the forty-five (45) worked days' continuous service
has not been requested by the Company and received Union concurrence.
SECTION 4
Any employee desiring a leave of absence from his job shall secure written
permission from both the Union and the Company. Failure to comply with this
provision shall result in the complete loss of seniority rights of the employee
involved. Inability to work because of proven sickness or injury shall not
result in the loss of seniority rights. The Company agrees to grant the
necessary time off, not to exceed thirty (30) days in
any calendar year, without discrimination, and without pay, to any employee
designated by the Union to attend a labor convention or serve in any capacity on
other Union business.
SECTION 5
Any employee who is physically or mentally disabled and cannot perform their
normal work due to non-occupational illness or accident supported by medical
evidence shall be continued on the seniority list of the Company for a period of
eighteen (18) months.
SECTION 6
The terms "continuous service" and "employed continuously" as used in this
Article shall be so construed that absence from employment due to illness,
accident, family deaths, or other similar occurrences, or layoffs by the Company
due to slack work or for other causes, shall not cause a break in the meaning of
the word "continuous" for the purpose of computing seniority, pay rates,
vacation entitlement and other provisions of this Agreement.
SECTION 7
Regular employees who leave the service of the Company to enter that of the
United States armed forces, or are drafted in the service of the U.S. Maritime
Commissions, or who are drafted by the United States Government for civilian
service, will upon their return, within ninety (90) days from release from such
service, be granted all seniority rights as if continuously employed by the
Company during such service, provided such is required by federal law.
Such persons will be rehired by the Company to take the place of other persons
employed by the Company who have less seniority.
Under no circumstances will this clause be construed as to require the Company
to increase the number of its employees beyond those actually needed.
SECTION 8
No employee may be transferred from another division of the Company not covered
by this Agreement into a division covered by this Agreement without losing his
seniority.
SECTION 9
An employee's seniority and his employment with the Company shall terminate upon
the occurrence of any of the following:
1. Voluntarily terminates employment
2. Discharge for cause
3. Absence exceeding the period for which a leave of absence has been
granted or extended unless the employee's excuse is satisfactory to the
Company
4. Layoffs in excess of eighteen (18) months
5. Absence for three (3) consecutive scheduled working days without prior
notice to the Company
6. Failure to notify the Company within three (3) working days of an
intention to return to work (within seven (7) calendar days) following
delivery of a certified mail letter or recall from layoff mailed to the
employee's last known address
7. Acceptance of other employment while on leave of absence unless agreed
to in writing by the Company
8. Retirement
ARTICLE VII - HOURS OF WORK
SECTION 1
The Company agrees that the standard hours of work shall be eight (8) hours per
day or forty (40) hours per week, and that the workweek shall start on Monday
and end on Friday. All work in excess of nine (9) hours per day or forty-five
(45) hours per week shall be paid at the rate of time and one-half the
employee's straight time hourly wage rate.
SECTION 2
All work performed on Saturday shall be paid at time and one-half. All work
performed on Sunday shall be paid at double time.
SECTION 3
If a driver reports for work and is sent home because no work is available, he
shall be paid for the first four (4) hours of his scheduled work period at his
regular straight-time hourly rate. This minimum four (4) hour guarantee will
also apply if a driver reports and begins to work, but is sent home after
working less than four (4) hours of his scheduled shift.
A driver who is called back to work will be paid not less than four (4) hours
pay at his regular straight time hourly rate.
If a driver has commenced his daily trip and encounters an impassable road
condition of his trip, he will be eligible for four (4) hours of reporting pay.
The Company may utilize the employee at work other than driving trucks, if
necessary.
SECTION 4
For purposes of computing overtime when a holiday(s) occur within a workweek,
employees shall be credited for time worked.
SECTION 5
Overtime shall not be pyramided. All employees shall be paid weekly on Friday
of the week following the close of the week in which work was performed.
SECTION 6
Casual drivers will only be used when an employee who is scheduled off is not
available at the time the need arises or within a time frame required by the
Company to manage an efficient operation.
ARTICLE VIII - HOLIDAYS
SECTION 1
All employees shall receive eight (8) hours of pay at their regular hourly rate
for the following holidays, without working on such days:
New Year's Day Memorial Day
Independence Day Labor Day
Thanksgiving Day Day following Thanksgiving Day
Day before Christmas Christmas Day
Good Friday Employee's Birthday
SECTION 2
To be eligible for holiday pay, the employee must work the full scheduled
workday before and after such holidays unless excused by the Company.
SECTION 3
Any work performed on these holidays shall be paid at double time in addition to
holiday pay. Should any of the above holidays fall on Sunday, the day observed
by decree or proclamation shall be considered the legal holiday.
SECTION 4
An employee has the following options relative to New Year's Eve, if this day is
scheduled down by the Company:
1. Unpaid.
2. Substitute for Birthday holiday.
3. Use a day of vacation.
ARTICLE IX - VACATIONS
SECTION 1
A vacation of one (1) week with pay shall be granted to any employee covered by
this Agreement who has been in the service of the Company for one (1) year. A
vacation of two (2) weeks with pay shall be granted to any employee covered by
this Agreement who has been in the service of the Company for a period of three
(3) years or more. A vacation of three (3) weeks with pay shall be granted to
any employee covered by this Agreement who has been in the service of the
Company for a period of eight (8) years or more. A vacation of four (4) weeks
with pay shall be granted to any employee covered by this Agreement who has been
in the service of the Company for a period of eighteen (18) years or more. Each
week's vacation pay shall consist of forty (40) hours at the employee's hourly
base rate.
SECTION 2
To be eligible for vacation, the employee must have worked at least one hundred
fifty (150) days within the calendar year prior to his vacation. Absence of an
employee due to an "on-the-job" injury or illness provided the employee has at
least one (1) year of seniority, will be credited as time worked for vacation
eligibility.
SECTION 3
The vacation period shall be from January 1 through December 31. The choice of
vacation period shall be determined by seniority. Employees entitled to three
or more weeks vacation may take up to two (2) weeks vacation without
restriction. The third and/or fourth weeks must be scheduled between January
1st and April 1st or November 1st and December 31st of a given calendar year.
If entitled, an employee may schedule three (3) or four (4) consecutive weeks
vacation between January 1st and April 1st or November 1st and December 31st of
a given calendar year.
SECTION 4
It is agreed that whenever a holiday falls within an employee's vacation period,
such employee shall be granted an additional day of vacation which may be taken
at a later date which has mutually been agreed to by the Company and the
employee.
SECTION 5
Any employee who leaves the service of the Company shall receive all vacation
earned but not taken.
SECTION 6
The Company shall have the right to determine vacation leaves of absence so that
such vacation leaves of absence shall not interfere with efficient operations of
the Company.
ARTICLE X - GRIEVANCE PROCEDURESECTION 1
For the purpose of this Agreement, a grievance is defined as any dispute or
disagreement between the employee or employees and the Company or the Union and
the Company as to interpretation of this Agreement. A grievance to be timely
must be presented within five (5) scheduled working days from the time the
employee involved first knew, or could have known of the facts giving rise to
the grievance.
STEP 1: The aggrieved employee or employees shall record their grievance
on a grievance blank and present the same to the Shop Steward. The Shop
Steward will then attempt to settle the grievance with the foreman or
immediate supervisor of the employee as soon as possible. The Shop Steward
shall be advised by the employee's immediate supervisor within three (3)
working day after submission of the written grievance as to the terms, if
any, upon which the Company is willing to adjust the grievance.
STEP 2: If no satisfactory adjustment is agreed upon, the matter shall be
referred by the Shop Steward to the Plant Superintendent, or some other
executive officer of the Company, with authority to act, who shall review
the alleged grievance and offer a decision within five (5) working days
after receipt of the grievance.
STEP 3: If the grievance is not resolved in Step 2, the grievance shall be
referred to Step 3 within five (5) working days of the Company's answer in
Step 2. The General Manager and/or his designee will meet with the
appropriate Local Union Representative to attempt to resolve the dispute.
Such meeting will be held within fifteen (15) working days of the Company's
answer in Step 2. The Company will provide a written response to the Union
within five (5) scheduled working days of the meeting.
STEP 4: If the grievance is not resolved in Step 3, the Federal Mediation
and Conciliation Service may be requested to supply a panel of seven (7)
arbitrators. The parties will thereafter meet or otherwise confer to
select the arbitrator. The Union and the Company shall each have the right
to strike three (3) names, and the last remaining named person shall be the
arbitrator.
SECTION 2
Any grievance involving discharge must be presented within ten (10) calendar
days from the date of discharge.
SECTION 3
The arbitrator shall have no authority to modify, amend revise, add to or
subtract from any of the terms of this Agreement and shall be strictly limited
to the interpretation or application of the express provisions of this
Agreement.
The decision and award of the arbitrator shall be in writing and shall be final
and binding upon the parties to the Agreement subject to any remedies at law.
The fees and expenses of the arbitrator shall be borne and divided equally
between the Company and the Union. Any expenses connected with the calling of
any witness shall be borne by the party calling such witness.
ARTICLE XI - DISCHARGE, SUSPENSION, UNIFORM RULES & REGULATIONS
SECTION 1
The Company shall not discharge any employee without just cause and shall give
at least one (1) warning notice by registered mail of any complaint regarding
quantity or quality of work to the employee in writing and a copy of same to the
Union affected, except that no warning notice need be given to an employee
before he is discharged if the cause of such discharge is dishonesty,
drunkenness, or being under the influence of liquor or drugs, hauling or being
in the possession of intoxicants or drugs during working hours, gross
insubordination, hauling unauthorized passengers, or recklessness resulting in
serious accident while on duty. A warning notice shall remain in effect for a
period of six (6) months from the date of said warning notice. Discharge shall
be by proper written notice both to the employee affected and the Union. Any
employee may request an investigation as to his discharge. Should such
investigation prove that an injustice has been done to an employee, he shall be
reinstated and, if so agreed, compensated at his usual rate of pay while he has
been out of work. Appeal from discharge must be taken within ten (10) calendar
days by written notice and a decision reached within ten
(10) days from the date discharged.
SECTION 2
The Union will not tolerate the misuse or willful destruction of the Company's
equipment by any of its members. A warning notice will be given, except in
deliberate case of abuse.
ARTICLE XII - STRIKES AND LOCKOUTS
The Union agrees that during the term of this Agreement neither the Union nor
its agents nor its members will authorize, instigate, aid, condone, or engage in
any work stoppage or strike. The Company agrees that during the same period
there shall be no lockouts.
ARTICLE XIII - UNAUTHORIZED ACTIVITY
It is understood and agreed that the Union shall have no financial liability for
acts of its members or agents which are unauthorized and which the Union cannot
control. It is agreed, however, that in the event of any such unauthorized
action the Union shall, upon receiving notice thereof, urge its members to
return to work if there should be a work stoppage and, just as soon as
practical, address a letter to the Company notifying the Company that the action
of the Union members or agents is unauthorized.
The Company shall be privileged to discipline employees responsible for such
unauthorized activities without violation of the terms of this Agreement;
subject, however, to the grievance and arbitration provisions of this Agreement.
In order that the Company may be apprised of the officer of the Union empowered
to authorize strikes, work stoppages, or actions which will interfere with the
activities required of employees under this Agreement, it is understood and
agreed that only the President of the Union has the power or authority to
authorize any such action or give the orders or directions necessary to carry
out any such action.
ARTICLE XIV - PROTECTION OF RIGHTS
It shall not be a violation of this Agreement, and it shall not be cause for
discharge, if any employee refuses to go through a picket line legally
authorized by a striking Union. The Union agrees that in the event the Company
becomes involved in a controversy with any other Union, the Union will do all in
its power to effect a fair settlement.
ARTICLE XV - HEALTH AND WELFARE
The Company and the Union have agreed to a program of health and welfare
benefits for employees in the bargaining unit represented by the Union and
covered by this Agreement. Said program is set forth in the document "Morgan
Products Ltd. - Decatur Teamsters." (See attached Exhibits B and C.) Said plan
and all terms and conditions thereof shall be deemed to be a part of this
Agreement as if solely set forth herein.
The Dental Assistance Plan (Exhibit B) and Comprehensive Medical Benefits
(Exhibit C) shall be paid 85% Company and 15% Employee. The employee's
contribution as a percentage of the plan costs shall be adjusted on the first of
each calendar year.
ARTICLE XVI - SAFETY AND HEALTH
SECTION 1
The Company shall continue to make reasonable provisions for the safety and
health of its employees at the plant during the hours of employment. Protective
devices on equipment necessary to properly protect employees from injury shall
be provided by the Company. All safety equipment required by the company,
excluding safety shoes, will be supplied by the Company at no cost to the
employee.
SECTION 2
If any employee feels the equipment assigned is unsafe or does not conform to
all applicable federal and state safety laws, such complaint is applicable to
the Grievance Procedure - Article X.
Section 3
It is hereby understood and agreed that drivers will be required to wear OSHA
approved safety shoes during regular working hours. The company agrees to pay
an annual safety shoe allowance of forty-five dollars ($45.00) for each full-
time driver. The allowance is payable January of each year. Casual drivers
will be required to wear safety shoes.
ARTICLE XVII - MANAGEMENT
The right to hire, maintain order and efficiency is the sole responsibility of
the Management. The right to promote and the right to discipline and discharge
for cause is likewise the sole responsibility of the Management; provided,
however, such promotions, discipline or discharge shall not be contrary to the
letter or spirit of this Agreement.
The Union recognizes other rights and responsibilities belonging solely to
Management, common among which, but by no means wholly inclusive, are the rights
to decide the products to be manufactured, the standard of quality of products
and workmanship and schedules of production.
The Company construes and the Union recognizes the provisions of this Agreement
as constituting limitations and being the only limitation upon Management's
rights to manage its business.
ARTICLE XVIII - SEPARABILITY AND SAVINGS CLAUSE
If any Article or Section of the Agreement or if any riders thereto should be
held invalid by operation of law or by any tribunal of competent jurisdiction,
or if compliance with or enforcement of any Article or Section should be
restrained by such tribunal pending a final determination as to its validity,
the remainder of the Agreement and of any rider thereto, or the application of
such Article or Section to persons or circumstances other than those as to which
it has been held invalid or as to which compliance with or enforcement of has
been restrained, shall not be affected thereby.
In the event that any Article or Section is held invalid or enforcement of or
compliance with which has been restrained, as above set forth, the parties
affected thereby shall enter into immediate collective bargaining negotiations,
upon the request of the Union or Company, for the purpose of arriving at a
mutually satisfactory replacement for such Article or Section during the period
of invalidity or restraint. If the parties do not agree on a mutually
satisfactory replacement, either party shall be permitted to all legal or
economic recourse in support of its demands notwithstanding any provision in
this Agreement to the contrary.
ARTICLE XIX - EXAMINATIONS
Physical, mental or other examinations required by a government body or the
Company shall be promptly complied with by all employees; provided, however, the
Company shall pay for all such examinations. The Company shall not pay for any
time spent in the case of applicants for jobs, but shall be responsible to other
employees for all time spent at the place of examination or examinations.
Examinations are to be taken at the employee's home terminal and are not to
exceed one (1) in any one (1) year.
The Company reserves the right to select its own medical examiner or physician,
and the Union may, if it believes an injustice has been done an employee, have
said employee re-examined at the Union's expense.
ARTICLE XX - MISCELLANEOUS PROVISIONS
SECTION 1
The Company agrees to post within the business premises such proper notices of
Union meetings, etc., as may be delivered to it by the Union.
SECTION 2
An authorized representative of the Union shall have access at all times during
working hours to the Company's premises for the purpose of conferring with the
officers of the Union, the Shop Steward and the Company's officials, providing
the Union notifies the Branch Manager or a Management representative.
SECTION 3
Drivers shall not be allowed to haul any merchandise, tools, or equipment loose
in the cab of the trucks.
SECTION 4
If any employee is required by the Company to attend school or safety meetings,
he shall be paid for the time spent in such activity at the rate he would have
been earning under this Agreement if he had been working. An employee who
attends school voluntarily or under a voluntary plan set up by the Company shall
not be paid for the time spent in said voluntary attendance. The pay provisions
of the reporting pay and call in pay of this Agreement do not apply in the case
of safety meetings as such.
SECTION 5
In case of authorized overnight trips, meals and pre-approved lodging shall be
paid for by the Company. Meals shall be evening and breakfast. Reimbursable
expenses incurred by drivers will be paid by the Company within twenty-four (24)
hours after the driver submits his expense report with required expense
receipts.
SECTION 6
No employee shall be held responsible for damage done to trucks operated by him
or merchandise under his charge, except where such employee is clearly
neglectful or at fault.
SECTION 7
The Company agrees to provide uniforms for employees. The Company agrees to
purchase five (5) uniforms for each new driver after completion of their
probationary period, and it will be the driver's responsibility to maintain and
wash these uniforms. The Company also agrees to replace any worn out, or
improperly fitting uniforms that are returned to the Company. (5 trousers, 5
long sleeved shirts, and 5 short sleeved shirts.) The Company may, at its
discretion, replace or alter uniforms that become ill-fitted.
SECTION 8
The one-half (1/2) hour unpaid lunch period may be taken at the driver's
discretion. However, if a driver works through his lunch period, he should note
the periods as "worked" on his time card. If there is computer confirmation,
the one-half hour will be paid.
SECTION 9
An employee suffering injury on the job shall not lose any pay due to same on
day of injury, providing such injury requires confinement or loss of time. Such
injury shall be reported and medical attention shall be sought if nature of
injury and Company requires same.
SECTION 10
In case of any breakdowns out of town, the Company shall pay for the following
expenses: hotel bills, meals, transportation and wages for all time spent with
equipment, unless such breakdown is caused clearly by the fault or neglect of
the employee. All breakdowns shall be reported promptly to the Company.
SECTION 11
The Company shall furnish Sickness and Accident insurance which shall pay to the
employee, eighth (8th) day of sickness and from the first (1st) day of
off-the-premises accident or hospitalization, the sum of one-hundred sixty-five
dollars ($165.00) per week for a period of twenty-six (26) weeks. Effective
July 17, 1997 the weekly payment will be increased to one-hundred seventy
dollars ($170.00) per week for a period of twenty-six (26) weeks.
SECTION 12
The Company agrees to compensate the Union Steward for one-half the hours lost
due to regular contract negotiations up to a maximum of four (4) hours in any
one work day. Compensation will be made based on the steward's straight time
hourly wage rate. The Union agrees to reimburse the steward up to four (4)
hours in any one day spent in contractual negotiations.
ARTICLE XXI - PENSION
SECTION 1
The Company and the Union have agreed to a program of pension benefits for
employees in the bargaining unit represented by the Union and covered by this
Agreement. Said program is set forth in the document "Morgan Products Ltd.
Hourly Employees' Pension Plan", a copy of which has been given to the Union.
Said plan, and all terms and conditions thereof, shall be deemed to be a part of
this Agreement as if solely set forth herein, except that it shall be amended as
follows:
1. Effective July 15, 1995, the monthly benefit level will be increased to
$12.00 times years of benefit service.
2. Effective July 15, 1996, the monthly benefit level will be increased to
$12.50 times years of benefit service.
3. Effective July 15, 1997, the monthly benefit level will be increased to
$13.50 times years of benefit service.
ARTICLE XXII - FUNERAL LEAVE
In case of death of mother, mother-in-law, father, father-in-law, brother,
sister, husband, wife or child, the Company will grant a leave of absence with
pay from day of death until and including day of funeral, not to exceed three
(3) working days.
ARTICLE XXIII - MILITARY CLAUSE
Employees enlisting or entering the military or naval service of the United
States, pursuant to the provisions of the Military Selective Service Act of
1967, as amended, shall be granted all rights and privileges provided by the
Act.
ARTICLE XXIV - BREAKDOWNS OR IMPASSABLE HIGHWAYS
On breakdowns or impassable highways, drivers on all runs shall be paid the
minimum hourly rate for all time spent on such delays, commencing with the first
hour or fraction thereof, but not to exceed more than eight (8) hours out of
each twenty-four (24) hour period, except that when an employee is required to
remain with his equipment during such breakdown or impassable highway, he shall
be paid for all such delay time at the rate specified in this Agreement. Time
required to be spent with the equipment shall not be included within the first
eight (8) hours out of each twenty-four (24) hour period for which a driver is
compensated on breakdowns or impassable highways, but must be paid for in
addition.
Where an employee is held longer than an eight (8) hour period, he shall, in
addition, be furnished clean, comfortable, sanitary lodging, plus meals. The
pay for delay time shall be in addition to monies earned for miles driven and/or
work performed.
ARTICLE XXV - SAVINGS CLAUSE REGARDING WAGE FREEZE
If any proposal submitted by the Union, if granted, may not be put into effect
because of applicable legislation, executive orders or regulations dealing with
Wage and Price Stabilization, then such proposals or any part thereof, including
any retroactive requirement thereof, shall become effective at such time, in
such amounts, and for such periods, retroactively and prospectively, as will be
permitted by law at any time during the life of this Agreement and any extension
thereof.
ARTICLE XXVI - JURY DUTY
Employees actively employed who have one (1) year or more of seniority and who
are required to serve on a jury panel shall (upon presentation to the Company of
satisfactory evidence of their being required to serve, their time spent in jury
service and the amount of compensation received) be paid the difference between
their straight-time hourly rate of pay (based upon eight (8) hours per day) and
the amount of compensation received for jury service for a maximum period of two
(2) weeks during any calendar year. Employees will report to work on the
scheduled work day following release from jury service.
ARTICLE XXVII - TERMINATION OF AGREEMENT
This Agreement shall become effective as of the 15th day of July, 1995, and
shall remain in full force and effect until the 15th day of July, 1998.
Notification may be given at least sixty (60) days prior to the expiration date
by either of the parties hereto.
Should notice of termination or desired modification be given in the manner
provided for above, the party desiring the same shall:
1. Offer to meet and confer with the other party for the purpose of
negotiating a new agreement or an agreement containing the proposed
modifications.
2. Notify the Federal Mediation and Conciliation Service within thirty
(30) days after such notice of the existence of a dispute, and
simultaneously, therewith, notify any state agency established to
mediate disputes within the state, provided no agreement has been
reached by that time.
3. Continue in full force and effect, without resorting to strike or
lockout, all the terms and conditions of this Agreement for a period of
sixty (60) days after such notice is given or until the expiration date
of this Agreement, whichever occurs later.
In the process of bargaining in good faith for a new Agreement or an Agreement
containing the desired modifications, the parties recognize the fact that it may
be necessary to continue their negotiations after the date upon which this
Agreement legally terminates, and in order to provide for their duties and
obligations for the period of time between the termination date of this
Agreement and the date upon which they conclude a new
Agreement or one containing the desired modifications, it is understood and
agreed as follows:
1. The parties shall continue to bargain and negotiate in good faith in an
effort to reach a complete agreement and understanding covering the
terms and provisions of a new Agreement to take the place of this one
or an Agreement containing the desired modifications, and such
negotiations shall continue until either a complete agreement and
understanding is reached, or until either or both parties conclude that
it is not probable that further negotiations will result in an
Agreement.
2. All of the terms and provisions of this Agreement shall be continued in
full force and effect and extended from the termination date hereof to
such time as the parties either enter into a new Agreement or an
Agreement containing the desired modifications, or terminate further
negotiations in the manner above mentioned.
Post Office address of the Union: 2210 East Hickory Street
Decatur, IL 62526
Post Office address of the Company: 3205 North 22nd Street
Decatur, IL 62526
FOR THE COMPANY: FOR THE UNION:
MORGAN PRODUCTS LTD. TEAMSTERS UNION LOCAL NO. 279
_________________________ _____________________________
C.J. Williams
_____________________________
_____________________________
APPENDIX "A"
It is agreed that Appendix "A" shall be attached to and become a part of the
Agreement existing by and between Morgan Products Ltd. and Teamsters Union Local
No. 279.
1. Wage Rates:
Effective July 15, 1995
Driver's Rate $11.61 per hour
Effective July 15, 1996 Driver's Rate $11.86 per hour
Effective July 15, 1997
Driver's Rate $12.11 per hour
2. Shift Differential
Twenty Cents ($0.20) per hour shift differential for night shuttle driver.
3. New employees hired after July 15, 1995 will be compensated in accordance
with the following schedule:
(1) 0-6 months service 85% of base rate
(2) 6-12 months service 90% of base rate
(3) 12-18 months service 95% of base rate
(4) 18+ months service 100% of base rate
EXHIBIT B
DENTAL ASSISTANCE PLAN
HOW THE PLAN WORKS
The Dental Assistance Plan covers four types of dental care:
CLASS A -
Preventive and Diagnostic Services
-routine cleaning
-oral exams (Up to twice in a
-topical application of fluoride 12-month period.)
The Plan is designed to encourage you and your family to see your dentist
regularly for check-ups. Therefore, no deductible need be met for Preventive
and Diagnostic Services. In addition, the amount of your reimbursement will be
100%.
CLASS B -
Basic Restorative Services
-fillings -periodontic (gum) treatment
-extractions -repair of crowns, bridges,
-root canal therapy and dentures
-oral surgery -anesthesia
After you meet the deductible (described below), you will be reimbursed at the
rate of 80% of reasonable and customary charges for Basic Restorative Services.
CLASS C -
Major Restorative Services
-crowns
-bridges
-dentures
After you meet the deductible, you will be reimbursed at the rate of 50% of
reasonable and customary charges for Major Restorative Services.
CLASS D -Orthodontic Services
-treatment to straighten teeth
After you meet the deductible, you will be reimbursed at the rate of 50% of
reasonable and customary charges for Orthodontic Services - up to a lifetime
maximum of $500 for each covered person.
THE DEDUCTIBLE
Payments for all dental services except CLASS A - Preventive and Diagnostic
Services will start after you meet the annual deductible.
Annual Deductible
$35.00 per person ($70.00 family maximum)
MAXIMUM BENEFITS
The Plan will pay up to $1000 per year for each covered person for Class A,
Class B, and Class C Services combined. For Class D Services, there is a
lifetime maximum of $500 for each covered person.
EXHIBIT "C"
HEALTH BENEFITS
For You and Your Dependents
COMPREHENSIVE MEDICAL BENEFIT
Maximum Benefit per lifetime
Effective 7/15/95 350,000
Effective 7/15/96 400,000
Effective 7/15/97 500,000
Individual Cash Deductible per Calendar Year - $200.00
Family Cash Deductible per Calendar Year - $400.00
Percentage of Covered Expenses Payable by the Plan
- - All expenses except Non-Confining Mental or Nervous Disorders
- - 100% of the following Covered Expenses (The Cash Deductible does not apply
to these expenses)
- - Hospice Services
- - Home Health Services
- - Birthing Center Services (as defined by the Plan)
- - Pre-admission Testing
- - Post-admission Testing
- - Generic prescription drugs
- - One routine Pap Test in a Calendar Year
- - Skilled Nursing facility care after hospital confinement
- - Ambulatory Surgical Center Services
- - Second Surgical Opinions
- - Covered Expenses due to an accident which happens while covered. The
expenses must be incurred within 90 days after and due to the accident.
The Cash Deductible does not apply to these expenses. (up to $300 for each
accident)
- - Out-Patient Surgery and related expenses
- - Consultation with a specialist surgeon. This surgeon can not be the one
originally scheduled to perform the surgery.
- - X-rays, laboratory tests and other diagnostic procedures needed for the
consultation.The specialist surgeon must be Board certified and has to give
the Company's
medical claim administrator a written report.
If the second surgical opinion does not confirm the need for surgery, payment
will be made for another surgical opinion in the same manner as the second
opinion.
80% for all other Covered Expenses until the Out-of-Pocket Feature applies.
(The Cash Deductible applies to these expenses).
100% for all Covered Expenses when the Out-of-Pocket Feature applies.
- - Expenses for Non-Confining Mental or Nervous Disorders with a $7,000
lifetime maximum.
50% (The Out-of-Pocket Feature does not apply.)
OUT-OF-POCKET FEATURE
When benefits are paid by the Plan at 80% you have to pay the remaining 20% of
Covered Expenses.
When this 20% plus the Cash Deductible that you pay reaches $1,000 for any
person in a Calendar Year, benefits will be paid by the Plan at 100% for that
person for the rest of that year.
If the 20% plus the Cash Deductible that you pay reaches $2,200 for all Covered
Family Members in a Calendar Year, benefits will be paid by the Plan at 100% for
your family for the rest of that year.
EXHIBIT D
1. Life Insurance and Accidental Death and Dismemberment:
July 15, 1995 $12,000
July 15, 1996 $13,000
July 15, 1997 $14,000
2. Supplemental Life Insurance:
Employee can purchase an additional amount of insurance with additional AD&D
equal to the amount in force at $0.27 per thousand per month.
INDEX
ARTICLE NUMBER PAGE NUMBER
I Recognition 1
II Union Shop 2
III Check off 2
IV Maintenance of Standards 2
V Wages 3
VI Seniority 3
VII Hours of Work 5
VIII Holidays 6
IX Vacations 7
X Grievance Procedure 8
XI Discharge, Suspension, Uniform
Rules and Regulations 9
XII Strikes and Lockouts 10
XIII Unauthorized Activity 10
XIV Protection of Rights 11
XV Health and Welfare 11
XVI Safety and Health 11
XVII Management 12
XVIII Separability and Savings Clause 12
XIX Examinations 12
XX Miscellaneous Provisions 13
XXI Pension 14
XXII Funeral Leave 15
XXIII Military Clause 15
XXIV Breakdowns or Impassable Highways 15
XXV Savings Clause Regarding Wage Freeze 15
XXVI Jury Duty 16
XXVII Termination of Agreement 16
Appendix "A" 19
Exhibit "B" 20
Exhibit "C" 22
Exhibit "D" 23
Exhibit 10.25
1995 - 1998
AGREEMENT
between
MORGAN DISTRIBUTION
and
TEAMSTERS LOCAL UNION NO. 486
affiliated with the
INTERNATIONAL BROTHERHOOD OF TEAMSTERS
November 4, 1995 through November 6, 1998
MORGAN PRODUCTS LTD.
MORGAN DISTRIBUTION
Birch Run, Michigan
TABLE OF CONTENTS
PAGE
INTRODUCTION
ARTICLE
1 Recognition 1
2 Transfer of Company Title or Interest 2
3 Subcontracting 3
4 Extra Contract Agreements 3
5 Seniority 3
6 Discharge-Discipline-Discrimination 6
7 Arbitration and Grievance Procedure 7
8 Stewards 9
9 Absence 10
10 Limitations of Authority and Liability 10
11 Protection of Rights 11
12 Maintenance of Standards 11
13 Inspection Privileges 12
14 Posting - Bulletin Boards 12
15 Health and Welfare and Pension 12
16 Paid for Time 15
17 Pay Period 15
18 Strikes and Lockouts 15
19 Loss or Damage 16
20 Uniforms 16
21 Equipment, Accidents & Reports, Dangerous
Work 17
22 Worker's Compensation 18
23 Military Service 19
24 Separability and Savings Clause 19
25 Separation of Employment 19
26 Sanitary Conditions 19
27 Examinations and Identification Fees 20
28 Meal Period 20
29 Wage Rates 21
30 Hours 22
31 Call-In Pay 22
32 Daily and Weekly Overtime 22
33 Saturday and Sunday Overtime 24
34 Vacations 24
35 Holidays 26
36 General Provisions 26
37 Funeral Leave 29
38 Breaks 30
39 Management Rights 30
40 Non-Discrimination 30
41 Whole Agreement Clause 30
42 Jury Duty Pay 31
43 Termination of Agreement 31
ARTICLE
Signature Page 32
Schedule "A 33
Schedule "B" 37
Schedule "C" 38
Exhibit "D" 39
Appendix "E" Rules & Regulations 40
Exhibit "F" 43
I N T R 0 D U C T I 0 N
THIS AGREEMENT, made and entered into, by and between MORGAN DISTRIBUTION
(MORGAN PRODUCTS LTD.) located at Birch Run, Michigan, party of the first part,
and hereinafter termed the Employer, and TEAMSTERS LOCAL UNION NO. 486,
affiliated with the International Brotherhood of Teamsters, Saginaw, Michigan,
party of the second part hereinafter called the Union.
WHEREAS: Both parties are desirous of preventing strikes and lockouts and other
cessations of work and employment; and of maintaining a uniform wage scale,
working conditions and hours of employees of the Employer; and of facilitating
peaceful adjustment of all grievances which may arise from time to time between
the Employer and his employees; and of promoting and improving peaceful
industrial and economic relations between the parties;
WITNESSETH:
ARTICLE I
RECOGNITION: UNION SHOP AND DUES
Section 1. RECOGNITION: (a) The Employer recognizes and acknowledges that the
Union is the exclusive representative in collective bargaining with the Employer
of those classifications of employees covered by the Agreement.
(b) The Employer agrees to respect the jurisdictional rules of the Union and
shall not direct or require their employees or persons other than the employees
in the bargaining units here involved to perform work which is recognized as the
work of the employees in said units.
Section 2. UNION SHOP: All present employees who are members of the Local Union
on the effective date of this section shall remain members of the Local Union in
good standing as a condition of continued employment. All present employees who
are not members of the Local Union, and all employees who are hired hereafter
shall on and after the thirty-first (31st) day following the beginning of their
employment or on and after the thirty-first (31st) day following the effective
or execution date of this section, whichever is the later, shall become and
remain members in good standing of the Local Union as a condition of employment.
Section 3. CHECK-OFF: The Employer agrees to deduct from the pay of all
employees covered by-this Agreement the dues, initiation fees and/or uniform
assessments of the Local Union and agrees to remit to said Local Union all such
deductions prior to the end of the month for which the deduction is made. Where
laws require written authorization by the employee, the same is to be furnished
in the form required.
The Local Union shall certify to the Employer in writing each month a list of
its members working for the Employer who have furnished to the Employer the
required authorization, together with an itemized statement of dues, initiation
fees, (full or installment), or uniform assessments owed and to be deducted for
such month from the pay of such member, and the Employer shall deduct such
amount from the first (1st) pay check following receipt of statement of
certification of the member and remit to the Local Union in one (1) lump sum.
The Employer shall add to the list submitted by the Local Union the names of all
regular new employees hired since the last list was submitted and delete the
names of employees who are no longer employed.
Where an employee who is on check-off is not on the payroll during the week in
which the deduction is to be made or has no earnings or insufficient earnings
during that week or is on leave of absence, the employee must make arrangements
with the Local Union to pay such dues in advance.
The Employer will recognize authorization for deductions from wages, if in
compliance with state law, to be transmitted to the Local Union or to such other
organizations as the Union may request if mutually agreed to. No such
authorization shall be recognized if in violation of state or federal law. No
deduction shall be made which is prohibited by applicable law. Except where the
Employer has made a clerical error in the deduction of dues, which shall be
promptly adjusted by the Employer, any question as to the correctness of the
amount deducted shall be settled between the employee and the Union, and the
Union shall indemnify and save harmless the Employer in demands that shall arise
from the proper administration of the above provisions.
ARTICLE 2
TRANSFER OF COMPANY TITLE OR INTEREST
This Agreement shall be binding upon the parties hereto, their successors,
administrators, executors and assigns. in the event an entire operation or any
part thereof is sold, leased, transferred or taken over by sale, transfer,
lease, assignment, receivership or bankruptcy proceeding, such operation shall
continue to be subject to the terms and conditions of this Agreement for the
life thereof. It is understood by this section that the parties hereto shall
not use any leasing device to a third (3rd) party to evade this contract. The
Employer shall give notice of the existence of this Agreement to any purchaser,
transferee, lessee, assignee, etc. of the operation covered by the Agreement or
any part thereof. Such notice shall be in writing with a copy to the Union not
later than the time the seller, transferee, or lessor executes a contract or
transaction as herein described. The Local Union shall also be advised of the
nature of the transaction, not including financial details.
ARTICLE 3
SUBCONTRACTING
For the purpose of preserving work and job opportunities for the employees
covered by this Agreement, the Employer agrees that no work or services
presently performed or hereafter assigned to the collective bargaining unit will
be subcontracted, leased or conveyed in whole or in part to any other plant,
person, or non-union employees. (Intra-plant work to be excluded from this
Article.) The Employer may subcontract work when all of his regular employees
are working or when there is no equipment and/or qualified regular employees to
handle the work provided that this right shall not be used as a subterfuge to
violate the provisions of this Agreement. Alleged violations of this provision
shall be submitted to the grievance procedure.
ARTICLE 4
EXTRA CONTRACT AGREEMENTS
The Employer agrees not to enter into any Agreement with another labor
organization during the life of this Agreement with respect to the employees
covered by this Agreement; or any agreement or contract with said employees,
individually or collectively, which in any way conflicts with the terms or
provisions of this Agreement, or which in any way affects wages, hours or
working conditions of said employees, or any individual employee, or which in
any way may be considered a proper subject for collective bargaining. Any such
agreement shall be null and void.
ARTICLE 5
SENIORITY
Section 1. ADDITIONAL HELP: When the Employer needs additional help, it shall
give the Union equal opportunity with all other sources to provide suitable
applicants, but the Employer shall not be required to hire those referred by the
Union.
Section 2. NEW EMPLOYEES: An employee hereafter employed shall be considered a
probationary employee for sixty (60) calendar days from his last date of hire.
During the probationary period an employee may be discharged without further
recourse; provided however, that the employer may not discharge or discipline
for the purpose of evading this Agreement or discrimination against Union
members. After sixty (60) calendar days, the employee shall be placed on the
regular seniority list.
Section 3. SENIORITY LIST: The Employer shall post a list of the employees
arranged in order of their seniority. This list shall be posted in a
conspicuous place at the place of employment.
Section 4. LAY-OFF - RECALL: Layoffs up to and including five (5) consecutive
working days are considered temporary and will be made by inverse order of
seniority within each department and shift provided the remaining employees have
the ability to perform the available work. For purposes of this section,
departments are as follows: (1) Window Shop (2) Steel Door Shop, (3) Wood Door
Shop, (4) Truck Drivers, and (5) Warehouse.
Section 4 (a). Layoffs in excess of five (5) consecutive working days will be
made by inverse order of plant-wide seniority.
(b) Employees will be recalled to work in order of seniority except as follows:
Deviations from recall by seniority can be made by the Company only where a laid
off employee's qualifications are needed on available work and no employee on
lay-off with more seniority has the necessary qualifications.
(c) Employees may be recalled from lay-off by telephone if
mutually agreed to between the Company and the Union. If an employee is not
recalled by telephone, a certified letter will be sent to the last known address
furnished the Company by said employee. Employee must respond to the company's
notice within three (3) working days from date of mailing unless they are unable
to for reasons beyond their control, it being understood that the laid off
employees shall keep themselves available for recall by the Company.
(1) Employee must report for work within ten (10) calendar days of mailing
unless otherwise mutually agreed to or beyond the control of the employee.
(2) In the event the employee fails to comply with the above listed steps, the
employee shall lose all seniority rights under this Agreement.
(3) The Company has the right to utilize the next senior laid off employee
during the time period between notifying (phone or mailing) the senior laid-off
employee of recall and their actual reporting date.
(4) The employee shall be required to furnish the Employer with a current
phone number (if employee has a phone and a current address).
Section 5. It is recognized that for all the purposes of this Agreement the
Company shall exercise its judgement of the qualifications of an employee. In
determining the qualifications of employees, the Company shall exercise
judgement as to differences in qualifications based on the employee's abilities,
their demonstrated skills in their work as well as their training and
experience, including evidence of training and experience gained outside the
Company, and their personal fitness and reliability. In exercising this
judgement, the Company will act fairly and not in an arbitrary and unreasonable
manner.
(a) Any controversy regarding the foregoing shall be submitted to the grievance
procedure, Article 7.
Section 6. LOSS OF SENIORITY: An employee's seniority and his employment
with the Employer shall terminate on the occurrence of any of the following:
(a) Voluntary quit.
(b) Discharge for cause upheld through the grievance procedure.
(c) Failure to return to work at the termination of an approved leave of
absence or an approved extension thereof.
(d) Lay-off or illness - length of seniority or thirty-six (36)months,
whichever is less.
(e) Absence from work for three (3) consecutive scheduled working days without
notification to the Employer shall be considered to be a voluntary quit
unless for just cause.
(f) Failure to return to work from lay-off as referred to in Article 5.
(g) Normal retirement.
Section 7. NON-UNIT WORK: An employee who has been transferred to another
position within the Company that is outside the bargaining unit may be returned
by the Company to the bargaining unit in accordance with his seniority level at
the time he left the unit provided he is returned within nine (9) months from
the date he left. If he is not returned within nine (9) months, such employee
shall lose all seniority rights within the bargaining unit.
Section 8. SENIORITY: For purposes of this Agreement, employees who have the
same plant or departmental seniority date will have relative seniority
determined by the application of alphabetical sequence with last names beginning
with the letter "A" deemed to be the most senior. In the event of identical
last names, the employee's first (1st) name will be determinant using the
alphabetical sequence in descending letters.
ARTICLE 6
DISCHARGE - DISCIPLINE - DISCRIMINATION
Section 1. DISCHARGE: The Employer shall not discharge nor suspend any
employee without just cause.
The Employer shall take steps to correct an employee by giving warning notices
in writing of complaints against employees with a copy to the union, except No
warning notices need be given in cases of drunkenness, dishonesty, recklessness
resulting in serious accident, the use of narcotics without a prescription,
unprovoked assault and other incidences of gross misconduct.
Warning notices shall be null and void and shall be removed from the employees
file after a period of twelve (12) months.
Discharge must be by proper written notice to the employee and the Union. Such
notice is to be provided to the employee within ten (10) working days of the
date the Company had sufficient knowledge to make a decision with respect to
such discharge. In the event any employee believes he had been unjustly
discharged or suspended, he shall contest such action through the provisions of
Article 7, Arbitration and Grievance Procedure starting at step 3, provided that
such grievance is presented within ten (10) working days of the date of the
discharge.
Section 2. PLANT RULES: If plant rules and regulations with respect to
disciplinary action are drafted and approved by both the Union and Employer,
such approved plant rules and regulations shall prevail in the application and
interpretation of this Article.
(a) In the event an employee received a disciplinary suspension, the time off
will be given as close to the date of the infraction as practical.
Section 3. UNION ACTIVITIES: Any employee member of the Union acting in any
official capacity whatsoever shall not be discriminated against for his acts as
such officer of the Union so long as such acts do not interfere with the conduct
of the Employer's business, nor shall there be any discrimination against any
employee because of Union membership or activities.
Section 4. OBLIGATION IN BUSINESS: The Employer shall not require, as a
condition of continued employment, that an employee purchase truck tractor
and/or tractor and trailer or other vehicular equipment or that any employee
purchase or assume any proprietary interest or other obligation in the business.
ARTICLE 7
ARBITRATION AND GRIEVANCE PROCEDURE
Section 1. It is mutually agreed that all grievances, disputes or complaints
arising under and during the terms of this Agreement shall be settled in
accordance with the procedure herein provided and that there shall at no time be
any strikes, tie-ups of equipment, slow-downs, walk-outs or any other cessation
of work through the use of any method of lockout or legal proceedings, except as
specifically agreed to in other superseding sections of this Contract.
Every effort shall be made to adjust controversies and disagreements in an
amicable manner between the Employer and the Union. In the event that any
grievance cannot be settled in this manner the question may be submitted by
either party for arbitration as hereinafter provided.
Section 2. (a) Should any grievance, dispute or complaint arise over the
interpretation or application of the contents of this Agreement, there shall be
an earnest effort on the part of the parties to settle such promptly through the
following steps:
Step 1. The employee will discuss his grievance with his immediate supervisor
within ten (10) working days from the time the employee involved first (1st)
knew or should have known of the facts giving rise to the grievance. Where a
Shop Steward has been appointed, he may be present in this discussion. The
employee's supervisor shall give his answer in writing within five (5) working
days from the date of the meeting.
Step 1A. Before proceeding to Step 2 below, it shall be the responsibility of
the aggrieved to reduce any grievance to writing on the regular grievance form
provided by the Local Union.
Step 2. By conference between the shop steward and business agent of the Union
and superintendent or their personnel manager within ten (10) work days.
Step 3. By conference between an official or officials of the union and the
manager, or representative of the company delegated by the manager, or both,
within ten (10) work days.
Step 4. In the event the last step fails to settle the complaint, it shall be
referred to arbitration upon the request of either party. The Executive Board
of the Local Union shall have the right to determine whether or not the
grievance is qualified to be submitted for arbitration by the union. Request
must be made within ten (10) working days following the decision of Local 486
Executive Board as to whether or not the grievance will be arbitrated.
(b) The procedures set forth herein may be invoked only by the authorized Union
representative or the Employer, and the time limits may be extended by mutual
agreement.
Section 3. The notice of submission to arbitration must be in writing and state
the issue to be submitted to the arbitrator.
(a) Either party may request the Federal Mediation and Conciliation Service to
supply a panel of seven (7) arbitrators. The parties will thereafter meet or
otherwise confer to select the arbitrator. The Union and the Company shall each
have the right to strike three (3) names, and the last remaining named person
shall be the arbitrator.
(b) The arbitrator shall have no authority to modify, amend, revise, add to or
subtract from any of the terms of this Agreement and shall be strictly limited
to the interpretation or application of the express provisions of this
Agreement.
(c) Where discharge issues are involved, the arbitrator shall render his award
within thirty (30) days from the date of the hearing. Any deviation from this
requirement must be by mutual agreement of the parties.
(d) The decision and award of the arbitrator shall be in writing and shall be
final and binding upon the parties to the Agreement subject to any remedies at
law.
(e) The fees and expenses of the arbitrator shall be borne and divided equally
between the Company and the Union. Any expenses connected with the calling of
any witness shall be borne by the party calling such witness.
Section 4. Grievances must be taken up promptly and no grievance will be
considered or discussed which is presented later than ten (10) days working day
period as set forth in Section 2, Step 1 above.
ARTICLE 8
STEWARDS
The Employer recognizes the right of the union to designate job steward and
alternates from the Employer's seniority list. The authority of job steward and
alternates so designated by the Union shall be limited to, and shall not exceed,
the following duties and activities.
(1) The investigation and presentation of grievances with his Employer or the
designated Company representative in accordance with the provisions of the
collective bargaining Agreement;
(2) The collection of dues when authorized by appropriate Union action;
(3) The transmission of such messages and information, which shall originate
with and are authorized by the Union or its officers, provided such messages and
information;
(a) have been reduced to writing; or,
(b) if not reduced to writing, are of a routine nature and do not involve work
stoppages, slow-downs, refusal to handle goods, or any other interference
with the Employer's business.
Job steward and alternates have no authority to take strike action or any other
action interrupting the Employer's business, except as authorized by official
action of the Union. The Employer recognizes these limitations upon the
authority of a job steward and his alternates, and shall not hold the Union
liable for any unauthorized acts. The Employer in so recognizing such
limitations shall have the authority to impose proper discipline including
discharge, in the event the shop steward has taken unauthorized strike action,
slow down or work stoppage in violation of this Agreement.
Stewards shall be permitted reasonable time to investigate, present and process
grievances on the Company property without loss of time or pay during his
regular working hours; and where mutually agreed to by the Union or Employer,
off the property or other than during his regular schedule without loss of time
or pay. Such time spent in handling grievances during the Steward's regular
working hours shall be considered working hours in computing daily and/or weekly
overtime if within the regular schedule of the Steward.
When requested by the Union, super-seniority, for lay-offs only, will be granted
to those Union Representatives who are regularly involved in the processing of
grievances and on-the-job contract administration. However, only one (1)
steward shall have super-seniority.
ARTICLE 9
ABSENCE
Section 1. Any employee desiring a leave of absence from his employment shall
secure written permission from both the Union and the Employer. The maximum
leave of absence shall be for ninety (90) days and may be extended for like
periods. During the period of absence the employee shall not engage in gainful
employment in the same industry in classification covered by this Contract.
Failure to comply with this provision shall result in the complete loss of
seniority rights for the employee involved. Inability to work because of proven
sickness or injury shall not result in the loss of seniority rights. The
employee must make suitable arrangements for continuation of Health and Welfare
and Pension payments before the leave may be approved by either the Union or the
Employer.
Section 2. The Employer agrees to grant necessary and reasonable time off
without discrimination or loss of seniority rights and without pay to any
employee designated by the Union to attend a labor convention or serve in any
capacity on other official Union business, provided forty-eight (48) hours
written notice is given to the Employer by the Union, specifying length of time
off. The Union agrees that in making its request for time off for Union
activities, due consideration shall be given to the number of men affected in
order that there shall be no disruption of the Employer's operations due to lack
of available employees.
ARTICLE 10
LIMITATIONS OF AUTHORITY AND LIABILITY
Section 1. No employee, Union member or other agent of the Union shall be
empowered to call or cause any strike, work stoppage or cessation of employment
of any kind whatsoever without the expressed approval of the Executive Board of
the union through its Secretary-Treasurer. The Union shall not be liable for
any such activities unless expressly so authorized.
Section 2. Any individual employee or group of employees, who willfully violate
or disregard the arbitration and grievance procedure set forth in Article 7 of
this Agreement, may be summarily discharged by the Employer without liability on
the part of the Employer or the union.
ARTICLE 11
PROTECTION OF RIGHTS
Section 1. PICKET LINE: It shall not be a violation of this Agreement, and it
shall not be cause for discharge or disciplinary action in the event an employee
refuses to enter upon any property involved in a primary labor dispute or
refuses to go through or work behind any primary picket line, including the
primary picket line of unions party to the Agreement.
Section 2. STRUCK GOODS: It shall not be a violation of this Agreement, and
it shall not be a cause for discharge or disciplinary action if any employee
refuses to perform any new business which his Employer undertakes to perform as
an ally of an Employer or person whose employees are on strike, and which
service, but for such strikes, would be performed by the employees of the
Employer or person on strike.
Section 3. Subject to Article 3 hereof (Subcontracting), the Employer agrees
that it will not cease or refrain from handling, using, transporting, or
otherwise dealing in any of the products of any other employer or cease doing
business with any other person, or fail in any obligation imposed by the Motor
Carriers Act or other applicable law as a result of individual employees
exercising their rights under this Agreement or under law, but the Employer
shall, notwithstanding any other provision in this Agreement, when necessary,
continue doing such business by other employees.
Section 4. GRIEVANCE: Within five (5) working days of filing of a grievance
claiming violation of this Article, the parties to this Agreement shall proceed
to the final step of the grievance procedure without taking any intermediate
steps, any other provision of this agreement to the contrary notwithstanding.
ARTICLE 12
MAINTENANCE OF STANDARDS
The Employer agrees that all conditions of employment in his individual
operation relating to wages, hours of work, overtime differentials and general
working conditions shall be maintained at not less than the highest minimum
standards in effect at the time of the signing of this Agreement, and the
conditions of employment shall be improved wherever specific provision for
improvement are made elsewhere in this Agreement. It is agreed that the
provisions of this section shall not apply to inadvertent or bona fide errors
made by the Employer or the union in applying the terms and conditions of this
Agreement if such error is corrected within ninety (90) days from the date or
error.
This provision does not give the employer the right to impose or continue wages,
hours and working conditions less than those contained in this Agreement.
ARTICLE 13
INSPECTION PRIVILEGES
Authorized agents of the Union shall have access to the Employer's establishment
during working hours for the purpose of adjusting disputes, investigating
working conditions, collection of dues, and ascertaining that the Agreement is
being adhered to, provided however, that there is no interruption of the firm's
working schedule. The representative of the Union shall make his presence known
at the main office.
ARTICLE 14
POSTING - BULLETIN BOARDS
Section 1. POSTING OF AGREEMENT: A Copy of this Agreement shall be posted in a
conspicuous place at the Employer's place of business.
Section 2. UNION BULLETIN BOARDS: The Employer agrees to provide suitable
space for the Union bulletin board. Postings by the Union on such boards is to
be confined to official business of the Union.
ARTICLE 15
HEALTH AND WELFARE AND PENSION
Section 1. The Company and the Union have agreed to a program of benefits for
employees in the bargaining unit represented by the Union and covered by this
Agreement.
Section 2. The Employer agrees to maintain employee Life Insurance and Sickness
and Accident benefits and health and dental coverage in accordance with the
following:
(a) Life Insurance and AD & D:
Effective November 4, 1995 - $20,500
Effective November 3, 1997 - $21,500
An employee can purchase an additional amount of life insurance with additional
AD&D equal to the amount of copaid insurance. The cost will be $0.19 per month
per thousand dollars insurance.
(b) Sickness and Accident (26 week maximum)
Effective November 4, 1995 - $170.00 weekly
Effective November 3, 1997 - $180.00 weekly
(First day of hospitalization for accident, eighth day for sickness.)
(c) Comprehensive Health Program - The Employee shall have four (4) plan
options to choose from. See Schedule A and B for an outline of applicable
coverage. The costs shown in Appendix A shall remain fixed for the term of
this Agreement.
Medical life-time maximum Coverage is $1,000,000, with a $2,000 annual
restoration benefit.
Each employee shall be provided a listing of the schedule of benefits under the
four (4) available health plan options.
Section 3. Employees with twenty-five (25) years of service and age sixty (60)
can purchase Company medical coverage at the cost in effect at time of
retirement.
Section 4. The Employer agrees to pay into the Central States Southeast and
Southwest Areas Pension fund for each employee covered by the collective
bargaining Agreement, who is on the regular seniority list, a contribution of:
$36.00 per week - Effective November 4, 1995
$40.00 per week - Effective November 3, 1996
$44.00 per week - Effective November 2, 1997
All payments into the Central States Southeast and Southwest Areas Pension Fund
must be made within fifteen (15) days from the end of each calendar month and
made payable to Central States Account #7000, and mailed to Harris Bank, P.O.
Box 71147, Chicago, Illinois 60694-1147.
Contributions to the Pension Fund must be made for each week on each regular
employee, even though such employee may work only part time under the provision
of this Contract, including paid vacations and weeks where work is performed for
the Employer, but not under provisions of this Contract and although
contributions may be made for those weeks into some other Pension Fund.
Employees who work either temporarily or in cases of emergency under the terms
of this Contract shall not be covered by the provisions of this Article.
If an employee is absent because of illness or off-the-job injury or lay-off and
notifies the Employer of such absence, the Employer shall continue to make the
required contributions to the Health and Welfare Fund and Pension Fund for a
period of four (4) weeks. If an employee is injured on the job, the Employer
shall continue to pay the required contributions until such employee returns to
work; however, such contributions shall not be paid for a period of more than
twelve (12) months.
If an employee is granted a leave of absence, the Employer shall collect from
said employee, prior to the leave of absence being effective, sufficient monies
to pay the required contributions into the Health and Welfare and Pension Fund
during the period of absence.
In those instances where the Employer is involved in an "owner-operators"
arrangement, there shall be no deduction from equipment rental of owner
operators by virtue of the contributions made to the Health and Welfare and the
Pension Fund, regardless of whether the equipment rental is at the minimum rate
or more and regardless of the manner of computation of owner-driver
compensation.
Notwithstanding anything herein contained, it is agreed that in the event an
Employer is delinquent at the end of a monthly period in the payment of his
contribution to the Health and Welfare and/or Pension Funds, in accordance with
the rules and regulations of the Trustees of such funds and after the proper
official of the Local Union shall have given seventy-two (72) hours notice to
the Employer of such delinquency in the Health and Welfare and Pension Fund
payments, the union shall have the right to take such action as it deems
necessary until such delinquent payments are made, and it is further agreed that
in the event such action is taken, the Employer shall be responsible to the
employees for losses resulting therefrom. Action for delinquent contributions
may be instituted by either the Local Union, the Area Conference or the
Trustees. Employers who are delinquent must also pay all attorneys' fees and
cost of collections.
ARTICLE 16
PAID FOR TIME
All employees covered by this Agreement shall be paid for all time spent in the
service of the Employer. Rates of pay provided for by this Agreement shall be
minimums. Time shall be computed from the time that the employee is ordered to
report for work and registers in until the time he is effectively released from
duty. All time lost due to delays as a result of overloads or certificate
violations involving federal, state or city regulations, which occur through no
fault of the driver, shall be paid. Such payment for driver's time when not
driving shall be at the hourly rate.
If not put to work, employees shall be guaranteed four (4) hours pay at the rate
specified in this Agreement.
ARTICLE 17
PAY PERIOD
Section 1. PAY DAY: All regular employees covered by this Agreement shall be
paid in full each week. All other employees shall be paid at the end of their
working period. Not more than seven (7) days shall be held from a regular
employee. The Union and Employer may by mutual agreement provide for semi-
monthly pay periods. Each employee shall be provided with an itemized statement
of gross earnings and an itemized statement of all deductions made for any
purpose. The Company agrees that if the paychecks are available they will be
given out at lunch time on Thursday except for drivers who are not on the
premises.
Section 2. VACATION PAY: If an employee's paid vacation period accrues or is
payable during a period in which he is otherwise entitled to unemployment
compensation, the employee's right to and payment for such vacation shall be
deferred until after termination of the unemployment benefit period. The
Employer waives the privilege of allocating vacation pay to past, present, or
future weeks of unemployment.
ARTICLE 18
STRIKES AND LOCKOUTS
Section 1. The Company agrees that during the term of this Agreement it will
not engage in any lockout of its employees in whole or in part.
Section 2. During the term of this Agreement the employees covered hereby shall
not engage in any strikes, sit-downs, restriction of production, picketing, or
any other action which will interrupt or interfere with the operations of the
Company. The Union agrees that during the term of the Agreement neither it or
its officers or agents will engage in, encourage or sanction any strike,
sitdown, restriction of production, picketing or any other action which will
interrupt or interfere with the operations of the Company. In the event of any
violation of this Article, the Union agrees that, upon notification by the
Company of it, it will take immediate affirmative steps with the employees
concerned to bring about an immediate resumption of the normal operations of the
Company. The union shall not be liable for damage resulting from the foregoing
provided it makes an effort to instruct its members to cease such activities.
Section 3. Neither the violation of any provision of this Agreement nor the
commission of any act constituting an unfair labor practice shall excuse the
Company, the Union or the employees from their obligations under the provisions
of this Article.
Section 4. It is further agreed that in the event of any violations of this
Article, the Company may discharge or otherwise discipline any employee (whether
individually or in a group) who has violated this Article. In such event an
employee, who has been discharged or otherwise disciplined, may file a grievance
under the grievance provision of this Agreement.
ARTICLE 19
LOSS OR DAMAGE
Employees shall not be charged for loss or damage unless clear proof of
negligence is shown. This Article is not to be construed as applying to
charging employees for damage to equipment under any circumstances.
ARTICLE 20
UNIFORMS
It is understood and agreed that all employees assigned to the driver job
classification will be required to wear a designated uniform during working
hours. Uniforms furnished by the employer shall be worn as a condition of
continued employment. Standards for the uniform will be set by the Employer.
The initial issue of uniforms for the individual drivers will consist of:
* 6 pairs of trousers
* 3 short sleeve shirts* 3 long sleeve shirts
* 1 winter jacket either waist or three-quarter (3/4) length dependent upon the
employee's choice.
Following the initial issue, the Company will determine when individual items no
longer meet standards, and the item will be replaced.
Employee is responsible for washing or dry cleaning said uniforms.
ARTICLE 21
EQUIPMENT, ACCIDENTS AND REPORTS, DANGEROUS WORK
Section 1. UNSAFE EQUIPMENT: The Employer shall not require employees to take
out on the streets or highways any vehicle that is not in safe operating
condition or equipped with the safety appliances prescribed by law. It shall
not be a violation of this Agreement where employees refuse to operate such
equipment unless such refusal is unjustified.
Section 2. DANGEROUS WORK: Under no circumstances will an emloyee be required
or assigned to engage in any activity involving dangerous conditions of work or
danger to person or property or in violation of any applicable statute or court
order, or governmental regulation relating to safety of person or equipment.
Section 3. ACCIDENT REPORT: Any employee involved in any accident shall
immediately report said accident and any physical injury sustained. When
required by his Employer, the employee, before starting his next shift shall
make out an accident report in writing on forms furnished by the Employer and
shall turn in all available names and addresses of witnesses to any accidents.
Failure to comply with this provision shall subject such employee to
disciplinary action by the Employer.
Section 4. DEFECTIVE EQUIPMENT: Employees shall immediately, or at the end of
their shift, report all defects of equipment. Such reports shall be made on a
suitable form furnished by the Employer and shall be made in multiple copies,
one (1) copy to be retained by the employee. The Employer shall not ask or
require any employee to take out equipment that has been reported by any other
employee as being in an unsafe operating condition until same has been approved
as being safe by the mechanical department.
When the occasion arises where an employee gives a written report on forms
issued by the Employer of a vehicle being in unsafe working-operating condition,
and receives no consideration from the Employer, he shall take the matter up
with the officers of the Union who will take the matter up with the Employer.
Section 5. NEW EQUIPMENT: Where new types of equipment and/or operations for
which rates of pay are not established by this Agreement are put into use within
operations covered by this Contract, rates governing such operations and/or
equipment shall be subject to negotiations between the parties. Rates agreed
upon or awarded shall be effective as of the date equipment is put into use.
However, in the event the Company and the Union are unable to agree on a new
rate the matter will be referred directly to arbitration in accordance with the
arbitration provisions of Article 7.
Section 6. HEATERS: The Employer shall install heaters, defrosters and
windshield washers on all trucks and tractors and keep same in an operating
condition.
Section 7. The Employer shall maintain at all times up-dated first-aid kits.
ARTICLE 22
WORKER'S COMPENSATION
The Employer shall provide Worker's Compensation protection for all employees
even though not required by state law.
The Employer also agrees to the following:
*Furnish transportation for emergency first aid treatment.
*Employee shall be paid the balance of his/her shift up to eight (8) hours for
the day of the accident if the doctor certifies that the employee is unable to
return to work and the injury is reported to management.
*Examination and treatment shall be paid by the Employer.
*Employee shall not lose pay for the time away from the Distribution Center for
the day of injury (excluding overtime) provided he is certified to return to
work and returns promptly upon leaving the doctor's office. If the employee is
unable to return to work because of the time of day of his release, he shall
still be eligible for such pay.
*Employer to pay for time lost in follow-up appointments for treatment of work
related injuries provided an employee tries to schedule the appointment outside
normal working hours but cannot do so.
The foregoing notwithstanding, the Employer agrees to abide by the provisions of
Worker's Compensation legislation as set forth in the statutes in the State of
Michigan.
ARTICLE 23
MILITARY SERVICE
Employees enlisting or entering the military or naval service of the United
States, pursuant to the provisions of the Selective
Service Act of 1948, shall be granted all rights and privileges
provided by the Act.
ARTICLE 24
SEPARABILITY AND SAVINGS CLAUSE
If any article or section of this Contract or any riders thereto should be held
invalid by operation of law or by any tribunal of competent jurisdiction, or if
compliance with or enforcement of any article or section should be restrained by
such tribunal pending a final determination as to its validity, the remainder of
this Contract and any Rider thereto, or the application of such article or
section to persons or circumstances other than those as to which it has been
held invalid or as to which compliance with or enforcement of has been
restrained, shall not be affected thereby.
In the event that any article or section is held invalid or enforcement of or
compliance with which has been restrained, as above set forth, the parties
affected thereby shall enter into immediate collective bargaining negotiations
upon the request of the Union for the purpose of arriving at a mutually
satisfactory legal replacement for such article or section during the period of
invalidity or restraint. If the parties do not agree on a mutually satisfactory
legal replacement within sixty (60) days after beginning of the period of
invalidity or restraint, either party shall be permitted all legal or economic
recourse in support of its demands notwithstanding any provision in this
Contract to the contrary.
ARTICLE 25
SEPARATION OF EMPLOYMENT
The Company agrees to abide by State of Michigan statutes as it relates to pay
for separating or terminating employees.
ARTICLE 25
SANITARY CONDITIONS
The Employer agrees to maintain a clean sanitary washroom and lunch room and the
employees agree to cooperate in keeping these areas neat.
ARTICLE 27
EXAMINATIONS AND IDENTIFICATION FEES
Section 1. Physical, mental or other examinations required by a government
body or the Employer shall be promptly complied with by all employees, provided
however, the Employer shall pay for all such examinations. The Employer shall
not pay for any time spent in the case of applicants for jobs and shall be
responsible to other employees only for time spent at the place of examination
or examinations where the time spent by the employee exceeds two (2) hours, and
in that case, only for those hours in excess of said two (2). Examinations are
not to exceed one (1) in any one (1) year unless the employee has suffered
serious injury or illness during the year. Employees will not be required to
take examinations during their working hours.
The Employer reserves the right to select its own medical examiner or physician
and the Union may, if it believes an injustice has been done an employee, have
said employee reexamined at the Union's expense.
All reasonable time spent for the purpose of Company directed drug testing shall
be paid for by the Company.
Section 2. Should the Employer find it necessary to require employees to
carry or record full personal identification, such requirements shall be
complied with by the employees. The cost of such personal identification shall
be borne by the Employer.
Section 3. The Company shall pay the full cost of commercial driver's
license for all fulltime drivers including any required endorsements.
ARTICLE 28
MEAL PERIOD
Employees shall, except by mutual agreement, take at least one (1) continuous
period for meals but not less than thirty (30) minutes nor more than one (1)
hour in any one (1) day. No employee shall be compelled to take more than one
(1) continuous hour during such period nor compelled to take any part of such
continuous hour before he has been on duty four (4) hours or after he has been
on duty six (6) hours. Meal period shall not be compulsory at stops where
driver is responsible for equipment or cargo, nor shall meal period be
compulsory when or where there is not an accessible eating place.
ARTICLE 29
WAGE RATE
A. CLASSIFICATION Effective 11/6/95 11/4/96 11/3/97
Leadman $12.00 $12.20 $12.40
Drivers $11.50 $11.70 $11.90
Warehouse $12.50 $11.70 $11.90
Shops $11.50 $11.70 $11.90
Temporary/Seasonal $ 7.05 $ 7.05 $ 7.05
Utility $11.90 $12.10 $12.30
B. REGULAR EMPLOYEE HIRING SCALE:
(1) First twelve (12) month period worked - $ 8.89
(2) Second twelve (12) month period worked - $ 9.37
(3) Third twelve (12) month period worked - $10.34
(4) After three (3) years of work, employees are paid in
accordance with Paragraph A above.
C. Shift differential, where applicable will be thirty cents ($0.30) for all
hours worked on regular shifts with starting time after 12:00 noon.
D. LEADMAN: It is recognized that the Company may at its discretion from time
to time, assign leadmen in the various departments in the plant. A leadman's
function will be to perform his assigned production work, to assist supervision
in job assignments or in training of employees. No employee shall be forced to
act in the capacity of leadman against his will.
E. It is understood that the Company may assign a utility person because of
the unique requirements of meeting and dealing with the Company's customers and
presenting the Company's image to the public.
F. GAINSHARING: During the first (1st) year of the Contract, a gainsharing
program has been agreed upon which focuses on reduction in damage expense and
improvements in safety performance. Programs will also be in place during the
second and third years of the Contract. The second and third year programs will
be tied in part to safety performance and in part to specific operating goals
that will be determined by the Company in advance of each period.
Payouts earned under these programs will be in a lump sum on an annual basis
following the completion of the program year. Payouts for second and third year
programs are guaranteed at no less than $125.00 in each year.
ARTICLE 30
HOURS
Section 1. The regular work week for day shift employees shall commence
Monday A.M. and end on Friday P.M. and for second shift employees shall commence
Monday P.M. and end Saturday A.M. The regular work week for the night shift
shall commence on Sunday P.M. and end Friday A.M.
Section 2. All employees covered by the Agreement shall guaranteed forty
(40) hours work or pay, Monday through Friday, except when weather conditions,
material shortages or other conditions beyond the control of the Company made it
impossible for the Company to provide forty (40) hours of work during any week.
Section 3. There shall be no split shifts.
Section 4. The Company will post by Friday noon of the prior week the
regular weekly scheduled starting times.
ARTICLE 31
CALL IN PAY
Section 1. Any employee called in to work and put to work any day Monday
through Friday shall be guaranteed six (6) hours pay at the rate specified in
this Agreement.
Section 2. Any employee called in to work and not put to work
any day Monday through Friday shall be guaranteed four (4) hours pay at the rate
specified in this Agreement.
Section 3. Any employee called in to work on Saturday and Sunday shall be
guaranteed four (4) hours at the rate specified in this Agreement.
ARTICLE 32
DAILY AND WEEKLY OVERTIME
SECTION 1. Eight (8) hours shall constitute a day's work and forty (40)
hours shall constitute a week's work. Time and one-half (1 1/2) shall be paid
for all overtime in excess of eight (8) hours per day or forty (40) hours per
week, whichever is the greater, but not both. There shall be no pyramiding.
SECTION 2. When overtime is required, it shall be offered initially to
employees within the department on the basis of their seniority. If required
overtime is not accepted on a voluntary basis within the department, the junior
employees within that department will be required to accept reasonable overtime.
An employee who is temporarily transferred to a department shall be eligible for
daily overtime within that department provided he has worked in the department
for the entire work day and will be eligible for weekend overtime provided he
has worked in that department for the full workweek. An employee eligible for
overtime in a department to which he is temporarily transferred will not have
department eligibility for overtime within his regular department.
If additional overtime is required within the department, it will be offered to
employees in other departments on the basis of seniority and their ability to
perform the job.
Reasonable overtime is defined as two (2) hours per day on a regularly scheduled
basis or not more than twelve (12) hours in any one (1) day. This provision does
not apply to truck drivers.
Management will make every effort to advise bargaining unit employees of daily
overtime requirements as soon as practical after they become aware of the need
for the overtime.
Section 3. When overtime is required and seasonal employees are working
within the department in which the overtime is required, it will be offered in
accordance with the following:
(a) Overtime scheduled Monday through Friday
1st - permanent department employees
2nd - permanent qualified employees outside the
department
3rd - temporary department employees
4th - permanent employees outside the department (not qualified)
5th - other temporary employees outside the department
(b) Overtime scheduled Saturday and Sunday
1st - permanent department employees
2nd - permanent qualified employees outside the department
3rd - permanent department temporary employees
4th - permanent employees outside the department (not qualified)
5th - other temporary employees outside the department
(c) Qualified employees with seniority from another department who want to work
overtime in departments where temporary employees are assigned, must sign an
overtime availability list which will be posted on Monday in overtime is
expected. The signing of such posting by a qualified employee shall commit such
employee to the working of such overtime is offered.
Section 4. If there are not enough volunteers to complete the assigned over-
time work, the least senior employees must perform such overtime work.
Section 5. Company agrees to post Saturday overtime by noon Thursday. Also,
whenever possible, the Company will advise the employees of daily overtime by
lunch.
ARTICLE 33
SATURDAY SUNDAY OVERTIME
Section 1. One and one-half (1 1/2) times the regular hourly rate shall be
paid for all work performed on Saturday.
Section 2. Double the regular hourly rate shall be paid for all work
performed on Sunday, except for the regularly scheduled night shift whose shift
begins on Sunday.
Section 3. Work performed on Saturday, Sunday, or holidays shall not apply
against the guarantee, but must be paid in addition to the guarantee.
Section 4. Holiday pay for not working shall apply against the guarantee.
ARTICLE 34
VACATIONS
Section 1. All employees who have worked for the Company for one (1) year as
of January 1 of any calendar year shall receive vacation according to the
following schedule:
Years of service as of Jan 1. Vacation Entitlement
1 to 3 years service 1 week vacation
3 to 8 years service 2 weeks vacation
8 to 15 years service 3 weeks vacation
15 plus years service 4 weeks vacation
When an employee's anniversary date makes him eligible for a higher vacation
entitlement he may schedule such incremental entitlement following such
anniversary date and prior to the next vacation period.
Section 2. Employees working less than ten (10) months after once completing
a year of employment shall have their vacation computed on the basis of one-
twelfth (1/12th) for each month during a calendar year in which the employee
works at least one-half (1/2) the working days in such month. If an employee
works ten (10) months out of a calendar year, employee is to be paid full
vacation.
Employees may select a specific vacation period(s) based on their seniority
within their department. A vacation selection calendar will be posted on the
first (1st) working day of January of the calendar year. Vacation selection
will take place between the date of posting and April 1st of that year. The
Company will approve and post the final schedule no later than April 15th.
Subsequent modifications to the final schedule may be made only with the
approval of the Company.
Section 3. One (1) week of vacation may be taken in increments of less than
one (1) week (single days) dependent upon approval of immediate supervisor.
Section 4. The Company will pay vacation pay in lieu of time off if
requested prior to April 1st and the employee will not be entitled to the time
off at a future date.
Section 5. Earned vacation must be taken in the January 1 through December
31 period and may not be carried over into the next vacation period unless
agreed to by the Company.
Section 6. AMOUNT OF VACATION PAY: (a) Each week of vacation pay shall be
equal to the forty (40) hour weekly guarantee.
For Christmas, New Years, Thanksgiving and Independence Day weeks the employee
may either elect to receive an additional days pay at straight time or take off
the Friday preceding the vacation or Monday immediately following.
For Good Friday, Memorial Day, and Labor Day, the employee shall be paid an
additional day's pay of eight (8) hours at the straight time hourly rate.
Vacation pay shall be paid to the employee before leaving on his vacation.
Section 7. TIME FOR VACATION, LEAVES OF ABSENCE: (a) The employer shall have
the right to determine vacation leaves of absence so that such vacation leaves
of absence shall not interfere with efficient operation of the Company. At
least two (2) employees shall be allowed off for vacation each week in the year,
if possible.
(b) Subject to Section (a) above, vacation requests shall be granted according
to seniority.
(c) Any employee who has earned his vacation and is separated from his
employment before taking it shall be paid the amount earned at the time of
separation.
Section 8. MISCELLANEOUS
(a) Employees will receive a copy of their vacation
requests when approved by their supervisor.
(b) A single calendar will be used for scheduling vacation and it will be
posted under glass in a locked bulletin board.
(c) If an employee transfers to another department, he must re-submit his
vacation request to his new supervisor.
ARTICLE 35
HOLIDAYS
Section 1. Employees shall not be required to work and shall be paid eight
(8) hours at the straight time hourly rate for the following ten (10) holidays:
New Year's Day, Good Friday, Memorial Day, Fourth of July, Labor Day,
Thanksgiving Day, Day following Thanksgiving, Christmas Day and the day before
Christmas and New Year's Eve.
Section 2. Employees called to work on any of the above listed holidays
shall be paid a minimum of eight (8) hours pay at two (2) times the regular rate
in addition to the eight (8) hours pay referred to above. This section does not
apply to night shift employees whose regularly scheduled shift begins on the
holiday.
Section 3. In order to qualify for eight (8) hours of straight time pay for
a holiday not worked, it is provided that employees must work the regular
scheduled work day which immediately precedes and follows the holiday, except in
cases of proven illness or unless the absence is mutually agreed to.
Section 4. Employees who are serving their sixty (60) days probationary
period are not entitled to holiday pay for holidays falling within the
probationary period.
Section 5. When a holiday falls on Sunday, it shall be celebrated on the
following Monday.
ARTICLE 36
GENERAL PROVISIONS
Section 1. JOB OPENINGS: When a permanent vacancy occurs in a department,
any employee having made previous application for transfer, will be given
consideration for such vacancy on the basis of his plant seniority and ability.
When an employee desires to transfer from one (1) job classification to another
he must complete a request for transfer form. When an employee accepts a
transfer to another job classification all other transfer requests become
invalid for not less than one (1) year duration.
(a) Employees who are permanently transferred into any department shall after
such transfer have their seniority apply only in that department. If it later
develops that an employee is unable to utilize his abilities to the best
advantage in the department to which he has been transferred, he shall within
fifteen (15) work days be allowed to return or be returned to the department
from which he was transferred. Such employee may not request another transfer
for a period of one (1) year.
Section 2. LODGING: All employees out-of-town on Company business shall be
reimbursed for two (2) meals and lodging when receipts are submitted. Such
reimbursement shall be up to a maximum of forty-eight dollars ($48.00) for each
overnight trip, increased to fifty dollars ($50.00) November 4, 1997. A Chicago
trip shall be fifty-six dollars ($56.00) plus tolls increased to fifty-eight
dollars ($58.00) plus tolls effective November 4, 1997.
In case of a breakdown of equipment or other emergencies necessitating a longer
period of hours of service other than the ordinary layover, the driver shall be
paid his hourly wage rate as provided for in this Agreement. A fifty dollar
($50.00) cash advance is available if requested.
Section 3. JOB CLASSIFICATIONS: (a) Any employee transferred from a
lower classification to a higher classification, shall receive the rate of pay
established for the higher classification for all hours worked.
(b) Any employee transferred temporarily from a higher classification to a
lower classification shall retain his higher rate of pay during the temporary
period.
Section 4. SEASONAL EMPLOYEES
(a) The Employer may use seasonal help from May 15th through
October 31st. Seasonal help shall not be covered by the Health and Welfare or
the Pension.
(b) Seasonal help shall be laid off before any regular employees are laid off.
(c) Seasonal help shall be required to join the Union.
(d) Seasonal help shall be given preference for recall the next season before
new employees are hired, provided they notify the Company of their desire to
return in advance of the season, and they must provide the Company with a
current address and telephone number.
(e) If a seasonal employee requests full time employment and the Company
agrees, said employee's seniority date will be the employee's last date of hire
and his rate of pay will fall in the respective wage scale time frame.
(f) When a seasonal employee is retained or called back by December 1st, he
will have the time worked for the summer of that calendar year count towards
probation time, wage progression time, and seniority. His seniority date will
be his most recent date of hire as a seasonal employee.
Section 5. TEMPORARY PART-TIME EMPLOYEES:
During the period from November 1st to May 14th of any Contract year, the
Company may have up to four (4) temporary/part-time employees on the payroll,
two (2) of whom shall be without restrictions and two (2) of whom must be
replacements for seniority employees not available for work. Such temporary
employees:
- - will not be eligible for benefits provided under the Agreement including
holidays and vacation, nor will they have any rights or protection under Article
6.
- - will be laid off before regular employees are laid off.
- - will be required to join the Union after thirty-one (31) days.
- - will be provided the opportunity to fill available fulltime positions provided
they are qualified and have been a temporary or seasonal employee for one (1)
year or more.
- - will be given a seniority date coincident with their new date of regular
employment if offered.
- - will have their original hire date serve as date of hire for purposes of
vacation entitlement and placement in the wage progression.
If the number of full-time regular employees falls below sixty-eight (68), the
Company will fill such positions from the available temporary employees on the
payroll. This in no way is a guarantee that the Company will maintain any fixed
level of permanent full-time employment.
Notwithstanding the other provisions of this Section, the parties acknowledge
that there may be a need to add temporary employees to meet short term
production or shipping requirements. If such a situation develops, the Company
and the Union will meet promptly for the purpose of agreeing on an arrangement
to add such temporary employees.
Section 6. On local deliveries the Company agrees to furnish a helper on the
truck when the driver asks for one, providing the demand is reasonable.
Section 7. If an employee, who because of old age or physical disability, is
unable to accomplish a day's work, the Employer and the Union will have the
right to adjust hours and wages of that employee.
Section 8. Any driver accepting an opening will be required to stay on that
run until the regular driver returns.
Section 9. Daily runs shall be offered to available drivers by seniority. If
not accept, the relief or lowest seniority driver will be assigned the run and
must accept.
Section 10. The company reserves the right to assign runs to drivers with
less than a full week to complete a five (5) day run schedule by seniority.
Section 11. Drivers called to work shall be allowed sufficient time without
pay to get to the garage or terminal, and shall draw pay from the time ordered
to report and register in.
Section 12. ROAD DRIVER ASSIGNMENTS: If any full time driver who has a five
(5) day run schedule (full week) goes on vacation or is off for a full week for
any reason, his run shall be open to any driver who has less than a five (5) day
run by seniority.
Section 13. Drivers with full five (5) day runs shall not be eligible to bid
on these temporary openings.
Section 14. SAFETY SHOES: Upon presentation of a printed receipt from a
recognized dealer, the Company will reimburse an employee up to a total of one
hundred fifty dollars ($150.00) during the life of the Agreement for steel-toed
safety shoes. Employees are required to wear steel-toed safety shoes during
working hours.
ARTICLE 37
FUNERAL LEAVE
Employees who have completed their probationary period will be paid for a
maximum of up to three (3) consecutive scheduled working days, commencing with
the day of death and ending with the day of the funeral, to compensate for
scheduled time lost to attend a funeral due to death in the employee's immediate
family.
The immediate family shall be limited to the employee's spouse, sons and
daughters, mother and father, sister and brother, sister-in-law and brother-in-
law, and mother-in-law and father-in-law. The pay shall be for eight (8) hours
at straight time. One (1) day will be paid for grandparents if the employee
attends the funeral. Employee must attend funeral and will receive a minimum of
two (2) days of pay for the employee's immediate family.
ARTICLE 38
BREAKS
All employees shall be given a fifteen (15) minute break in the A.M. and a ten
(10) minute break in the P.M. without loss of pay. If employees work beyond ten
(10) hours, they shall be given a ten (10) minute break.
ARTICLE 39
MANAGEMENT RIGHTS
The Company retains the right to direct its operations, to determine the number
and location of its plant or plants, the products to be manufactured, the
methods, processes and means of manufacturing, the sources of materials and
supplies, and the disposition of products, and also, subject to the provisions
of this Contract, the right to discipline or discharge any employee for just
cause and to transfer and lay-off employees for lack of work or for other
legitimate reasons. The foregoing includes the right to subcontract, in
accordance with Article 3. For the purpose of preserving work and job
opportunities for the employees covered by this Agreement, the employer agrees
that no work assigned to the collective bargaining unit will be assigned to any
non-unit employee. Neither the Union nor any of its members shall assume
authority to act in any managerial capacity.
ARTICLE 40
NON-DISCRIMINATION
The Company and the Union separately and jointly agree that all terms and
conditions of this Agreement will be applied equally to all employees regardless
of age, race, creed, color, sex, national origin, handicaps, or veteran's
status. Wherein the text of this Agreement, words of masculine gender are used,
they shall be interpreted to denote either masculine or female gender.
ARTICLE 41
WHOLE AGREEMENT CLAUSE
Section 1. The parties acknowledge that during the negotiations, each had the
unlimited right to make demands with respect to any subject, and that the
understandings and agreements are set forth in this Agreement. Therefore, the
Company and the Union for the life of the Agreement, each waives the right and
each agrees that the other shall not be obligated to bargain collectively with
respect to any subject or matter referred to, or covered in this Agreement, even
though such subject or matter may not have been within the knowledge or
contemplation of either or both of the parties at the time they negotiated or
signed this Agreement. This does not preclude the parties from mutually
agreeing to supplement or modify any portion of the Agreement during its term.
However, any such supplement or modification which waives or modifies any of the
terms of this Agreement must be made and executed in writing between the
parties.
Section 2. As stated above, it is agreed that this written Contract reflects
the entire Agreement between the parties. Amendments or clarifications of the
Agreement mutually agreed upon shall be reduced to writing, attached to, and
shall become a part of this Contract.
ARTICLE 42
JURY DUTY PAY
Employees actively employed who have one (1) year or more of seniority and who
are required to serve on a jury panel shall (upon presentation to the Company of
satisfactory evidence of their being required to serve, their time spent in jury
service and the amount of compensation received) be paid the difference between
their straight-time hourly rate of pay (based upon eight [8] hours per day) and
the amount of compensation received for jury service for a maximum of two (2)
weeks during any calendar year.
Employees who are released from jury service before noontime shall be permitted
two (2) hours in which to return to work; employees who are released from jury
service after noontime, shall be excused from work all that day.
ARTICLE 43
TERMINATION OF AGREEMENT
Section 1. This Agreement shall be in full force and effect from November 4,
1995, to and including November 6, 1998 and shall continue in full force and
effect from year to year thereafter unless written notice of desire to cancel or
terminate the Agreement is served by either party upon the other at least sixty
(60) days prior to date of expiration.
Section 2. It is further provided that where no such can-cellation or
termination notice is served and the parties desire to continue said Agreement
but also desire to negotiate changes or revisions in this Agreement, either
party may serve upon the other a notice, at least sixty (60) days prior to
November 6, of any subsequent Contract year, advising that such party desires
to continue this Agreement but also desires to revise or change terms or
conditions of such Agreement. The respective parties shall be permitted all
lawful economic recourse to support their request for revisions if the parties
fail to agree thereon.
Section 3. In the event of an inadvertent failure by either party to give
notice as set forth in this Article, such party may give such notice at any time
prior to the termination or automatic renewal date of this Agreement. If a
notice is given in accordance with the provisions of this section, the
expiration date of this Agreement shall be the sixty-first (61st) day following
such notice.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and seals
the day and year first above written.
FOR THE COMPANY FOR THE UNION
Morgan Distribution Teamsters Local Union No. 486
a Division of Morgan affiliated with the International
Products, LTD. Brotherhood of Teamsters
BY Dennis C. Hood BY David Robinson
Secretary-Treasurer
DATE 2/23/96 DATE 12/22/95
BY C. J. Williams Jr. BY Jim Ayers
Business Agent
DATE 1/4/96 DATE 12/21/95
SCHEDULE "A"
The plan provides benefits for you and each eligible dependent during the life
of the Agreement and in accordance with the individual Health Plan option
selected. The following constitutes a summary of the available options.
HOURLY DISTRIBUTION EMPLOYEES - SAGINAW IBT
SUMMARY OF HEALTH PLAN OPTIONS
BENEFIT OPTION 1 OPTION 2 OPTION 3 OPTION 4
Inpatient 80% after 80% after *80% after 80% after
Hospital deductible deductible deductible deductible
X-ray & Lab 80% after 80% after *80% after 80% after
deductible deductible deductible deductible
Outpatient Surgery 80% after 80% after *100% after 100% after
Home Health Care, deductible deductible deductible deductible
Hospice, Pre-Admis-
sion Testing, Pap
Smear, Birthing
Center
Physician Charges 80% after 80% after 80% after 80% after
deductible deductible deductible deductible
Chiropractor 80% after 80% after 80% after 80% after
deductible deductible deductible deductible
max. $500/ max. $500/
calendar yr calendar yr.
Mental/Nervous Combined Combined Inpatient Inpatient
Alcoholism & Drug Inpatient & Inpatient &
Abuse Treatment Outpatient: Outpatient:
80% after 80% after 80% after 80% after
deductible deductible deductible deductible
max. $7,000 max. $7,000
calendar yr calendar yr
$20,000 $20,000
lifetime lifetime
2 inpatient 2 inpatient 50% to 50% to
treatments/ treatments/ $1,000/ $1,000/
lifetime lifetime calendar yr calendar
yr
Prescription Drugs 80% after 80% after *Generic- Generic-
deductible deductible 100%, no 100%, no
deductible deductible
Brand-80% Brand-80%
deductible deductible
Wellness Benefit:
Routine Physicals 80% after 80% after Not covered Not
deductible, deductible, covered
$200/calen- $200/calen-
dar year, dar year,
max. max.
BENEFIT OPTION 1 OPTION 2 OPTION 3 OPTION 4
Routine Mammograms 80% after 80% after Not covered Not covered
deductible, deductible,
1/calendar 1/calendar
yr after yr after
age 40 after age 40
Well Baby Care 80% after 80% after Not covered Not covered
(to age 24 months) deductible deductible
$200/calen- 200/calen-
dar yr max dar yr max
Lifetime Maximum $1,000,000 $1,000,000 $1,000,000 $1,000,000
Out-Of-Pocket Individual- Individual- Individual- Individual
$1,900 $1,100 $1,000 $1,000
Family- Family- Family- Family-
$3,800 $2,200 $2,000 $2,000
Annual Deductible Individual Individual individual Individual
$1,000 $200 $100 $100
Family- Family- Family- Family-
$2,000 $400 $200 $200
Dental Plan Plan A Plan A Plan B Plan B
Health Care $1,200 $1,200 $1,200 $1,200
Spending Account employee employee employee employee
account account account account
available available available available
1/1/96 & 1/1/96 & 1/1/96 & 1/1/96 &
beginning beginning beginning beginning
of subse- of subse- of subse- of subse-
quent cal- quent cal- quent cal- quent
endar yr. endar yr. endar yr. calendar
yr.
Dependent Care Available Available Not avail- Not Avail-
Spending Account Available Available
*Under Option 3, the first $2,500 of Generic RX, inpatient physician visits, and
(*) expenses are paid at 100% with no deductible.
Cost/week 11/6/95 single $0 single $0 Single- Single-
Family $0 Family $0 $6.40 $4.10
Family- Family-
$16.12 $10.20
11/4/96 Single $0 Single Single Single-
$2.00 $8.50 $6.40
Family $0 Family Family- Family-
$5.00 $21.12 $15.20
11/3/97 Single $0 Single Single Single-
$3.00 $9.50 $7.10
Family $0 Family Family Family
$7.50 $23.62 $17.70
Annual Employee
Rebate-$300
SCHEDULE "B"
MORGAN PRODUCTS LTD.
SUMMARY OF DENTAL PLANS
BENEFIT PLAN A PLAN B
Class I - Preventive services:
Oral Examinations, X-rays, cleaning, 100% 100%
Fluoride, Space Maintainers
Sealants (Dependent Children 100% None
to age 19)
Class 2 - Basic Services:
Emergency Treatment, Endodontics, 80% 80%
Periodontics, Oral Surgery, Local
Anesthesia, Extractions, Restorative
Treatment: Amalgam, Silicate & Acrylic
Fillings & Stainless Steel Crowns
Class 3 - Major Services:
Gold Foil Fillings, Inlays & Onlays, 50% 50%
Crowns
Class 4 - Prosthodontics Services:
Removable or Fixed Bridgework; Partial or 50% 50%
Complete Dentures
Class 5 - Orthodontic Services:
Teeth Straightening Procedures (Dependent 50% 50%
Children to age 19)
Deductible (applies to Classes Individual Individual
2, 3 & 4 service only) $35 $35
Family Family
$70 $70
Annual Non-Orthodontic Maximum $1,000 $1,000
Lifetime Orthodontic Maximum $1,000 $ 500
SCHEDULE "C"
MEMORANDUM OF UNDERSTANDING
It is hereby understood and agreed, all truck runs will be placed up for bid
whenever a complete set of scheduled weekly runs become available due to a
permanent vacancy. Weekly sets of runs will be determined by management, and
may be modified for operational efficiency.
The foregoing not withstanding, if a driver elects to voluntarily give up his
weekly set of runs, the set of runs will be subject to bid by any driver who has
less than a five (5) day set of runs. If there are no bids, the least senior
driver will be assigned the run. The driver electing to give up his runs will
be assigned the run of the aforementioned least senior driver.
EXHIBIT D
MEMORANDUM OF UNDERSTANDING
It is hereby understood and agreed that the Plant Rules and Regulations (Exhibit
E) are a part of the basic Agreement and shall remain in effect during its term.
Further, it is agreed that absences and related offenses shall be handled in a
progressive disciplinary manner in accordance with the following:
1st Offense - Oral Warning
2nd Offense - Written Warning
3rd Offense - Three (3) Day Suspension
4th Offense - Discharge
The foregoing notwithstanding, the provision of Article 5 - Seniority, Section 6
(e) apply.
Employees who believe they have been unjustly disciplined may seek relief
through the grievance procedure.
EXHIBIT "E"
MORGAN PRODUCTS, LTD.
MORGAN DISTRIBUTION DIVISION
PLANT RULES AND REGULATIONS
If your plant is to operate smoothly and efficiently, and if it is to be a safe
and desirable place to work, it is necessary that the Company adopt certain
plant rules and regulations. The purpose of these rules is not to restrict the
rights of anyone, but to define them and protect the rights of all, and insure
cooperation. The violation of any of the following posted rules will be
sufficient grounds for disciplinary action up to and including discharge,
depending upon the seriousness of the offense in the judgement of the Employer.
The Company intents to fulfill its obligation to administer these rules fairly
and consistently, and it solicits the cooperation of all its employees in making
the Birch Run Division a safe, efficient, and pleasant place in which to work.
1. Failure to be at work at starting time or leaving work station prior to the
designated quitting time, or without proper relief when required.
2. Irregular attendance, unexcused absence, or frequent tardiness.
3. Not reporting for duty without notifying his Employer prior to work that he
will not report, except in cases where such notification is impossible.
Failure to give such notice for a period in excess of three (3) consecutive
days shall result in termination.
4. Smoking and use of matches in clearly marked restricted areas or zones.
5. Wasting time or loitering in rest rooms, lunch room or on any company
property during working hours.
6. The use of profane, abusive or threatening language toward fellow employees
or supervisory personnel.
7. Creating or contributing to unsanitary conditions.
8. Failure to properly identify oneself to security guard or supervisor, when
requested.
9. The making or publishing of false, vicious or malicious statements
concerning any employee, supervisor, the Company or its products.
10. Soliciting or collecting contributions for any purpose whatsoever on
Company's premises without permission of the Industrial Relations
Department.
11. Fighting, playing practical jokes, gambling or disorderly conduct on the
job or on the Employer's property.
12. Sleeping on the job or on the Employer's property.
13. Leaving the job or department except in an emergency without securing the
proper permission.
14. Insubordination.
15. Threatening, intimidating or interfering with employees or supervision at
any time.
16. Refusal to obey instructions of foreman or other supervisors. This
includes, among other things, refusal of any employee to satisfactorily
perform any task or duty or job within reason assigned to the employee by
his or other supervisor or to disobey his foreman or other supervisor's
instructions. (Employees are to follow instructions; any complaint may be
taken up later through regular channels.)
17. Failure to carry on the job in a satisfactory manner.
18. Misconduct.
19. Spoilage of work willfully or through carelessness, deficiency, damaging or
destroying the Employer's property such as buildings, equipment, tools,
materials or supplies, or injuring others through carelessness or
negligence.
20. Theft, vandalism or pilferage of the Employer's property or that of fellow
employees or property of contractors doing business on the Employer's
premises.
21. Tampering with any other employees time card, or tampering with the
employees own time card, or falsification of personnel or other Company
records.
22. Possession of, drinking of, or otherwise using liquor or any alcoholic
beverage or other form of intoxicants on Company property at any time.
Reporting for work while under the influence of intoxicants, or when in an
unsafe condition due to the aftereffects of intoxicants.
23. Knowingly restricting production or participating in a work slowdown or
stoppage.
24. Possession of weapons, ammunition or explosives on Company premises at any
time.
25. The violation of safety, production, or other operation rules and
regulations.
26. Using another's pass, or permitting another to use your pass to enter the
property.
27. Intimidation or interference with the rights of any employee, or any
interference with an employees tools, machine, materials, his work or any
other personal property, or that of the Employer being used by an employee.
28. Dishonesty.
29. Failure to report promptly injury or sickness acquired during the course of
employment.
30. Unauthorized distribution of literature, written or printed matter of any
description on Company time.
31. Performing personal work on Company property.
32. Refusing to work overtime unless excused by the Company.
EXHIBIT F
NIGHT SHIFT
Should the Company decide to establish a night shift production operation, they
will staff such a shift by first asking for volunteers who have the necessary
qualifications and who are working on the day shift in the same department. If
there are insufficient volunteers, the Company will transfer the required number
of experienced employees to that shift in inverse order of seniority among the
qualified employees within that department.
This will not restrict the Company from hiring seasonal employees to meet its
remaining production needs.
Exhibit 10.26
INDEMNIFICATION AGREEMENT
INDEMNIFICATION AGREEMENT dated November 3, 1994 (the "Agreement"), between
MORGAN PRODUCTS LTD., a Delaware corporation (the "Corporation"), and a
Director of the Corporation (the "Indemnitee").
WHEREAS, the ability to attract and retain competent and experienced
persons to serve as directors and officers of the Corporation is in the best
interests of the Corporation and its stockholders, and the Corporation's
ability to attract and retain such persons will be enhanced by providing
both its current and prospective directors and officers with indemnification
agreements as permitted by Delaware law so that such persons will be willing
to serve or continue to serve the Corporation;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. GENERAL INDEMNIFICATION. It is the intention of the parties
hereto that the Corporation shall be required to indemnify the Indemnitee to the
fullest extent permitted by the law (both statutory and common) of the State of
Delaware as now or hereafter in effect. Therefore, in addition to the
indemnification and advancement of expenses specifically provided elsewhere
herein, the Corporation shall indemnify and hold the Indemnitee harmless in
connection with any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, and
including any action brought by or in the right of the Corporation, to which
the Indemnitee is, was or at any time becomes a party, or is threatened to be
made a party, by reason of the fact that he is or was or has agreed to become
a director, officer, employee or agent of the Corporation, or is or was
serving or has agreed to serve at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, or by reason of any action alleged
to have been taken or omitted in any such capacity, against all costs,
charges, expenses (including attorneys' fees and costs), judgments, fines
and amounts paid in settlement actually and reasonably incurred
by him or on his behalf in connection with such action, suit or proceeding and
any appeal therefrom, to the fullest extent then permitted by the law (both
statutory and common) of the State of Delaware as now or hereafter in effect,
notwithstanding that such indemnification is not specifically mandated or
authorized by the other provisions of this Agreement, the Corporation's By-Laws
or Certificate of Incorporation or otherwise and notwithstanding that the legal
basis for such indemnification may have arisen subsequent to the act, occurrence
or omission with respect to which indemnification is being sought.
SECTION 2. THIRD PARTY ACTIONS. The Corporation shall indemnify and hold
the Indemnitee harmless in connection with any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation and
covered by Section 3 hereof) to which the Indemnitee is, was or at any time
becomes a party, or is threatened to be made a party, by reason of the fact that
he is or was or has agreed to become a director, officer, employee or agent of
the Corporation, or is or was serving or has agreed to serve at the request of
the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, or by reason
of any action alleged to have been taken or omitted in any such capacity,
against all costs, charges, expenses (including attorneys' fees and costs),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him or on his behalf in connection with such action, suit or proceeding and
any appeal therefrom, if the Indemnitee acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe that his conduct was unlawful.
SECTION 3. ACTIONS IN RIGHT OF CORPORATION. The Corporation shall
indemnify and hold the Indemnitee harmless in connection with any threatened,
pending or completed action, suit or proceeding, brought by or in the right of
the Corporation to procure a judgment in the Corporation's favor, to which the
Indemnitee is, was or at any time becomes a party, or is threatened to be made a
party, by reason of the fact that he is or was or has agreed to become a
director, officer, employee or agent of the Corporation, or is or was serving or
has agreed to serve at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, or by reason of any action alleged to have been taken or
omitted in any such capacity, against all costs, charges and expenses (including
attorneys' fees and costs) actually and reasonably incurred by him or on his
behalf in connection with such action, suit or proceeding and any appeal
therefrom, if the Indemnitee acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Corporation,
except that no indemnification shall be made in respect of any claim, issue or
matter as to which the Indemnitee shall have been adjudged to be liable to the
Corporation unless and only to the extent that the Court of Chancery of the
State of Delaware or the court in which such action, suit or proceeding was
brought shall determine upon application that, despite the adjudication of such
liability but in view of all the circumstances of the case, the Indemnitee is
fairly and reasonably entitled to indemnity for such costs, charges and expenses
which the Court of Chancery or such other court shall deem proper.
SECTION 4. PREVAILING PARTY. Notwithstanding anything herein to the
contrary, to the extent that the Indemnitee has been successful, on the merits
or otherwise, including, without limitation, the dismissal of an action without
prejudice, in defense of any action, suit or proceeding referred to in Sections
2 or 3 hereof, he shall be indemnified against all costs, charges and expenses
(including attorneys' fees and costs) actually and reasonably incurred by him or
on his behalf in connection therewith. In addition, to the extent that the
Indemnitee has been partially successful on the merits or otherwise, including,
without limitation, the dismissal without prejudice, as to one or more but less
than all claims, issues or matters in any action, suit or proceeding referred to
in Sections 2 or 3 hereof, he shall be indemnified against all costs, charges
and expenses (including attorneys' fees and costs) actually and reasonably
incurred by him or on his behalf in connection with each successfully resolved
claim, issue or matter.
SECTION 5. NO PRESUMPTIONS. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
the Indemnitee did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Corporation and,
with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.
SECTION 6. ADVANCES; EXPENSES AS WITNESS.
(a) Costs, charges and expenses (including attorneys' fees and costs)
incurred by the Indemnitee in connection with any civil or criminal action, suit
or proceeding (including one brought by or in the right of the Corporation)
which might give rise to a right of indemnification hereunder shall be paid by
the Corporation in advance of the final disposition of such action, suit or
proceeding, provided, however, that the payment of such costs, charges and
expenses (including attorneys' fees and costs) incurred by the Indemnitee in his
capacity as a director or officer (and not in any other capacity) in advance of
the final disposition of such action, suit or proceeding shall be made only upon
receipt of an undertaking by or on behalf of the Indemnitee to repay all amounts
so advanced in the event that it shall ultimately be determined that the
Indemnitee is not entitled to be indemnified by the Corporation as authorized in
this Agreement. Any advancement of expenses pursuant to this Agreement shall be
made promptly and in any event within 15 days after receipt of written request
therefor from the Indemnitee, accompanied by any required undertaking.
(b) Notwithstanding any other provision of this Agreement, to the extent
that the Indemnitee is a witness in any action, suit or proceeding referred to
in Sections 2 or 3 and any appeal therefrom to which the Indemnitee is not a
party, the Corporation shall indemnify the Indemnitee against all costs, charges
and expenses (including attorneys' fees and costs) actually or reasonably
incurred by him or on his behalf in connection therewith.
SECTION 7. PROCEDURE.
(a) Any indemnification pursuant to this Agreement (unless ordered by a
court) shall be made by the Corporation promptly and in any event within 45 days
after receipt of a written request therefor from the Indemnitee, unless a
determination is made within such 45 day period (i) by the Board of Directors of
the Corporation by a majority vote of a quorum consisting of directors who were
not parties to such action, suit or proceeding, or (ii) if such quorum is not
obtainable, or, even if obtainable a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (iii) by the vote
of the holders of a majority of the issued and outstanding shares of Common
Stock of the Company, that indemnification of the Indemnitee is not proper in
the circumstances because he has not met the applicable standard of conduct.
(b) The right to indemnification or advancement of expenses shall be
enforceable by the Indemnitee in any court of competent jurisdiction if the
Corporation denies such request, in whole or in part (including by failure to
act thereon) within 45 days after receipt of such written request (or, in the
case of advancements, within 15 days), it being the parties' intention that if
the Corporation denies the Indemnitee's request for indemnification, the
question of the Indemnitee's right thereto shall be for the court to decide.
The Indemnitee's costs and expenses incurred in connection with successfully
establishing his right to indemnification and advancements, in whole or in part,
in any such action shall also be indemnified by the Corporation. It shall be a
defense to any such action (other than an action brought to enforce a claim for
advancements where the required undertaking, if any, has been received by the
Corporation) that the Indemnitee has not met the applicable standard of conduct.
The burden of proving such defense shall be an the Corporation, and there shall
be a rebuttable presumption that the Indemnitee did not fail to meet such
applicable standard. Neither the failure of the Corporation (including its
Board of Directors, its independent legal counsel and its shareholders) to have
made a determination prior to the commencement of such action that
indemnification of the Indemnitee is proper in the circumstances because he has
met the applicable standard of conduct, nor the fact that there has been an
actual determination by the Corporation (including its Board of Directors, its
independent legal counsel and its shareholders) that the Indemnitee has not met
such applicable standard of conduct, shall be a defense or sufficient to rebut
such presumption that the Indemnitee has met the applicable standard of conduct.
SECTION 8. NON-EXCLUSIVITY, ETC. The indemnification and advancement of
expenses provided by this Agreement shall not be deemed exclusive of any other
rights to which the Indemnitee may now or hereafter be entitled under any
present or future law (whether statutory or common), agreement, By-Law,
provision of the Certificate of Incorporation, vote of shareholders or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in any other capacity while holding office or while employed by
or acting as agent of the Corporation. No amendment or repeal of any present or
future provision in the Corporation's Certificate of Incorporation or By-Laws
authorizing or requiring the indemnification of or advancements to the
Indemnitee in any such capacity, and which amendment or repeal would diminish
the Indemnitee's right of indemnification or to advancements in any respect
under such provision, shall be effective against the Indemnitee unless he shall
consent to such amendment or repeal in a signed writing or by the Indemnitee's
vote as a director or shareholder.
SECTION 9. SURVIVAL.
(a) The indemnification and advancement of expenses provisions hereof
shall continue after the Indemnitee has ceased to be a director, officer,
employee or agent of the Corporation and shall inure to the benefit of the
Indemnitee's estate, heirs, executors and administrators.
(b) This Agreement shall be binding on the successors and assigns of the
Corporation including, without limitation, any transferee of all or
substantially all of its assets and any successor by merger, consolidation,
operation of law or otherwise.
SECTION 10. PARTIAL INDEMNIFICATION. If the Indemnitee is entitled
pursuant hereto to indemnification for some or a portion of the expenses,
judgments, fines, penalties or amounts paid in settlement, actually and
reasonably incurred by the Indemnitee but not for the total amount thereof, the
Corporation shall indemnify the Indemnitee for such portion thereof to which the
Indemnitee is entitled.
SECTION 11. EXCEPTIONS. Any other provisions herein to the contrary
notwithstanding, the Corporation shall not be obligated pursuant to the terms of
this Agreement:
(a) To indemnify or advance expenses to the Indemnitee with respect to
proceedings or claims initiated or brought voluntarily by the Indemnitee and not
by way of defense, except with respect to proceedings brought to establish or
enforce a right to indemnification under this Agreement or any other statute or
law or otherwise as required under Section 145 of the Delaware General
Corporation Law, but such indemnification or advancement of expenses may be
provided by the Corporation in specific cases if the Board of Directors finds it
to be appropriate.
(b) To indemnify the Indemnitee for expenses or liabilities of any type
whatsoever (including, but not limited to, judgments, fines or penalties, and
amounts paid in settlement) to the extent that such expenses or liabilities have
been paid directly to the Indemnitee by an insurance carrier under a policy of
officers' and directors' liability insurance maintained by the Corporation.
(c) To indemnify the Indemnitee in connection with a suit or judgment
rendered for an accounting of profits arising from the purchase and sale by the
Indemnitee of securities pursuant to Section 16(b) of the Securities Exchange
Act of 1934, as amended,
or any similar successor statute.
SECTION 12. SEVERABILITY. If this Agreement or any provision hereof shall
be invalidated or held illegal or unenforceable for any reason whatsoever:
(a) the validity, legality and enforceability of the remaining provisions
of this Agreement (including, without limitation, each portion of any section of
this Agreement containing any such provision held to be invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable) shall not
in any way be affected or impaired thereby; and
(b) to the fullest extent possible, the provisions of this Agreement
(including, without limitation, each portion of any section of this Agreement
containing any such provision held to be invalid, illegal or unenforceable, that
is not itself invalid, illegal or unenforceable) shall be construed so as to
give effect to the intent manifested by the provision held invalid, illegal
or unenforceable.
SECTION 13. MISCELLANEOUS.
(a) This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original and together which shall constitute one and
the same agreement.
(b) Any headings used herein are used solely for convenience and shall not
be deemed to constitute part of this Agreement or to affect the construction
hereof.
(c) All notices, demands, and other communications hereunder must be in
writing and shall be deemed to have been received if delivered by hand or mailed
by certified or registered mail, postage prepaid, or sent by overnight or
express courier, postage prepaid, to the following persons and addresses:
If to the Corporation:
MORGAN PRODUCTS LTD.
75 Tri-State International; Lincolnshire, IL 60069
Attention: President
If to the Indemnitee:
_________________________________________________
or to such other name and address as to which notice shall duly be given in
accordance with the terms hereof.
(d) This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware.
(e) The Indemnitee agrees to promptly notify the Corporation upon being
served with any citation, complaint, indictment or other document that might
reasonably result in indemnification or advancement of expenses hereunder.
However, no failure to provide such notice shall result in the Indemnitee losing
any of his rights hereunder or impose any liability whatsoever on the
Indemnitee.
(f) This Agreement may not be modified or amended except in a writing
signed by both parties hereto. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provisions
hereof nor shall such waiver constitute a continuing waiver.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first above written.
MORGAN PRODUCTS LTD.
By /s/ Larry R. Robinette
Name: Larry R. Robinette
Title: President, Chief Executive Officer
Exhibit 10.27
10/25/95
FOURTH AMENDMENT TO
LOAN AND SECURITY AGREEMENT
THE FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT ("Fourth Amendment") is
made as of the 30th day of October, 1995 by and among Morgan Products Ltd., a
Delaware corporation having its chief executive office at 469 McLaws Circle,
Williamsburg, Virginia 23185 ("Borrower"), the lenders who are or who may from
time to time become signatories hereto ("Lenders") and Shawmut Capital
Corporation, a Connecticut corporation having an office at 200 West Madison
Street, Chicago, Illinois 60606 ("SCC") which is the successor-in-interest to
Barclays Business Credit, Inc., as agent for the Lenders ("SCC," in such
capacity being "Agent").
WITNESSETH:
WHEREAS, SCC, as Agent and Lender, and Borrower entered into a certain Loan
and Security Agreement dated as of July 14, 1994 as amended by (i) a certain
First Amendment to Loan and Security Agreement ("First Amendment") dated as of
September 30, 1994 by and among Agent, Borrower and the lender signatories
thereto, (ii) a certain Second Amendment to Loan and Security Agreement ("Second
Amendment") dated as of October 20, 1994 by and among Agent, Borrower and the
lender signatories thereto, and (iii) a certain First (sic) Amendment to Loan
and Security Agreement dated as of March 29, 1995 by and among Agent, Borrower
and the lender signatories thereto. Said Loan and Security Agreement, as
amended from time to time, is hereinafter referred to as the "Loan Agreement";
and
WHEREAS, Borrower, Lenders and Agent desire to amend and modify certain
provisions of the Loan Agreement.
NOW THEREFORE, in consideration of the premises, the mutual covenants and
agreements herein contained, and any extension of credit heretofore, now or
hereafter made by Lenders and Agent to Borrower, the parties hereto hereby agree
as follows:
1. Definitions. Except as otherwise specifically provided for herein,
all capitalized terms used herein without definition shall have the meanings
given to them in the Loan Agreement.
2. Borrowing Base. The definitions of "Borrowing Base" and "Interest
Coverage Ratio" contained in Section 1. 1 of the Loan Agreement are hereby
deleted and the following are inserted in their stead:
"Borrowing Base - as at any date of determination thereof, an amount equal
to the lesser of:
(a) the Maximum Revolving Credit Loan; and
(b) an amount equal to:
(i) eighty-five percent (85%) or such lesser
percentage as Agent in its reasonable discretion deems appropriate, of
the net amount of Eligible Accounts outstanding at such date;
PLUS
(ii) the lesser of (A) Thirty-Five Million Dollars
($35,000,000) and (B) the Inventory Percentage of the value of
Eligible Inventory at such date consisting of raw materials and
finished goods, calculated on the basis of the lower of cost or
market, as determined by Agent, in its reasonable discretion, on a
first-in, first-out ("FIFO") basis;
MINUS (subtract from the lesser of clauses
(a) and (b) above)
(c) an amount equal to the sum of (A) the face amount
of all LC Guaranties and Letters of Credit issued by Agent or Bank and
outstanding at such date, plus (B) any amounts which Agent and/or Lenders
may then be obligated to pay for the account of Borrower under this
Agreement.
For purposes hereof, the net amount of Eligible Accounts at any time shall be
the face amount of such Eligible Accounts less any and all returns, rebates,
discounts (which, if granted outside the ordinary course of business as in
effect on the Closing Date, may, at Agent's option, be calculated on shortest
terms), credits, allowances or excise taxes of any nature at any time issued,
owing, claimed by Account Debtors, granted, outstanding or payable in connection
with such Accounts at such time, all as determined by Agent in the reasonable
exercise of its discretion.
Interest Coverage Ratio - with respect to any fiscal
period, the ratio of Borrower's (a) net income before interest, income tax
expense, depreciation expense, amortization expense, any gain or loss (in
excess of $40,000 within the immediately previous twelve month period) from
the sale of assets outside the ordinary course of business and any charge or
expense to net income (in an amount not to exceed $13,000,000) in respect to
the restructuring of Morgan Manufacturing for or taken within such period to
(b) Borrower's interest expense for such period."
3. Capital Expenditures. Section 9.2(L) of the Loan and Security
Agreement is hereby deleted and the following is inserted in its stead:
"9.2. Negative Covenants. During the term of this Agreement, and thereafter
for so long as there are any Obligations to Agent or any Lender, Borrower
covenants that, unless Required Lenders have first consented thereto in writing,
it will not:
* * *
(L) Capital Expenditures. Make Capital Expenditures which, in the
aggregate, as to Borrower and its Subsidiaries, exceed during any fiscal year of
Borrower within the Term hereof the amount set forth opposite such fiscal year
in the following schedule:
Fiscal Year Amount
1995 $8,500,000
1996 $7,300,000
1997 and each succeeding fiscal year $5,000,000"
* * *
4. Specific Financial Covenants. Section 9.3 of the Loan Agreement is
hereby deleted and the following is inserted in its stead:
"9.3. Specific Financial Covenants. During the Term of this Agreement, and
thereafter for so long as there are any Obligations to Agent or any Lender,
Borrower covenants that, unless otherwise consented to by Required Lenders in
writing, it shall:
(A) Minimum Net Worth. Maintain at the end of each fiscal quarter
within the term hereof a Tangible Net Worth of not less than the amount shown
below for the fiscal quarter corresponding thereto:
Fiscal Quarter Ending Amount
September 30, 1994 $46,500,000
December 31, 1994 $46,600,000
March 31, 1995 $46,200,000
June 30, 1995 $46,800,000
September 30, 1995 $46,500,000
December 31, 1995 $44,200,000
March 31, 1996 $42,200,000
June 30, 1996 $42,300,000
September 30, 1996 $44,600,000
December 31, 1996 $43,900,000
March 31, 1997 $43,500,000
June 30, 1997 and the last day
of each fiscal quarter thereafter $44,100,000
(B) Total Liabilities to Tangible Net Worth Ratio. Have at the end
of each month within the Term hereof, a ratio of Indebtedness (computed in
accordance with GAAP) to Tangible Net Worth equal to or less than the ratio set
forth opposite such month in the following schedule:
Month Ratio
Each Month within 1.85 to 1
Fiscal Year 1994
Each Month within 1.50 to 1
Fiscal Year 1995
January, February and 1.50 to 1
March, 1996
April, May, June, July 1.60 to 1
August, September, October
and November, 1996
December, 1996 and each 1.50 to 1
month thereafter
(C) Interest Coverage Ratio. Have at the end of each fiscal quarter
of Borrower within the Term hereof, commencing with the fiscal quarter ending
September 30, 1994, an Interest Coverage Ratio for the twelve consecutive months
then ended equal to or greater than the Interest Coverage Ratio set forth
opposite such fiscal quarter in the following schedule:
Fiscal Quarter Ending Interest Coverage
Ratio
Fiscal Quarters Ending on or Prior 1.30 to 1
to March 30, 1995
June 30, 1995 1.30 to 1
September 30, 1995 .90 to 1
December 31, 1995 1.00 to 1
March 31, 1996 .80 to 1
June 30, 1996 .95 to 1
September 30, 1996 1.60 to 1
December 31, 1996 2.20 to 1
March 31, 1997 2.50 to 1
June 30, 1997 and each 2.50 to 1
Fiscal Quarter thereafter
(D) Minimum Excess Revolving Credit Loan Available. Maintain as of
any date within the Term hereof, average Excess Revolving Credit Loan
Availability for the date of determination and the immediately previous
twenty-nine (29) days of Eight Million Dollars ($8,000,000) or more.
Agent and Lenders have agreed to waive compliance by Borrower with the
covenants contained in Sections 9.3(A) and 9.3(C) for the period ending June 30,
1995. Said waiver does not affect any other covenant or compliance by Borrower
with the covenants contained in Section 9.3(A) and 9.3(C) for any other period."
5. Fee. In order to induce Lenders to enter into this Fourth Amendment,
Borrower agrees to pay, on the date hereof, an amendment fee in the amount of
One Hundred Thousand Dollars ($100,000). Said fee shall be apportioned among
Lenders in accordance with their respective Revolving Credit Percentages.
6. Continuing Effect. Except as otherwise specifically set out herein,
the provisions of the Loan Agreement shall remain in full force and effect.
IN WITNESS "WHEREOF, this Fourth Amendment has been duly executed as of the
day and year specified at the beginning hereof.
MORGAN PRODUCTS LTD., ("Borrower")
By: ____________________________
Name: Douglas H. MacMillan
Title: Vice President and Chief Financial Officer
SHAWMUT CAPITAL CORPORATION ("Agent" and "Lender")
By:
Name: Sandra Evans
Title: Vice President
HARRIS TRUST AND SAVINGS BANK ("Lender")
By: ______________________________
Name: _____M. Elizabeth Gilliam_____
Title: _____Vice President___________
BANK OF AMERICA ILLINOIS ("Lender")
By: ______________________________
Name: ___Joseph T. Koch_____________
Title: ___Sr. Vice President_________
Exhibit 10.28
LEASE AGREEMENT
THIS LEASE AGREEMENT, dated March 2, 1995, by and between Jim Griffith, Builder,
a Virginia Corporation/Assigns, with its principal office at 483 McLaws Circle,
Suite 3, Williamsburg, Virginia 23185, hereinafter referred to as the Lessor,
and Morgan Products, hereinafter referred to as the Lessee, and DIR Diversified
Investment, Realty & Financial Services, Inc. hereinafter referred to as Agent.
WITNESSETH
The Lessor hereby leases to the Lessee and the Lessee hereby leased from the
Lessor the following described property, hereinafter referred to as the "Leased
Premises":
Space designated as Morgan Products Building, Phase 6, Quarterland Commons,
containing approximately 6,909 rentable square feet and being located at the
following address: Phase 6 Quarterland Commons, McLaws Circle, Williamsburg,
Virginia 23185, together with the appurtenances, including without limitation,
the right in common with others, to use for the respective purposes for which
they are intended, the sidewalks, parking areas, stairways, truck service ways,
and other public service portions of the building which Lessee and invitees are
permitted to use hereinafter collectively called "Common Areas".
1. TERM: This Lease shall be a term of Seven Years, commencing on August 1,
1995, and terminating on July 31, 2002 (See Addendum 1),
on the terms and conditions, as set forth herein.
2. USE: The Leased Premises are to be used for general office and for no other
purpose without prior written consent of Lessor. Lessee shall not use the Leased
Premises for any unlawful purpose or so as to constitute a nuisance.
3. POSSESSION: The Lessor covenants and agrees to have the Leased Premises
completed and ready for possession on or before the above commencement date,
barring strikes, insurrection, Acts of God and other casualties, or unforeseen
events beyond the control of the Lessor. Lessee agrees to accept the possession
of said Leased Premises within ten (10) days from receipt of notice by Lessor of
completion. The Lessee, at the expiration of the term shall deliver up the
Leased Premises in good repair and condition, excepting damages beyond the
control of the Lessee, reasonable use, ordinary decay, wear and tear, excepted.
4. RENT: Lessee hereby covenants and agrees to pay, during the term hereof, to
the Lessor, in advance and beginning on the commencement date of this lease and
on the first day of each and every month thereafter a base rent of Six Thousand
Nine Hundred Ninety-Nine Dollars and Eighty-Eight Cents ($6,999.88). Rent shall
be paid to Lessor at 483 McLaws Circle, Suite 3, Williamsburg, Virginia 23185.
If Lessee's possession commences on other than the first day of the month,
Lessee shall occupy the Leased Premises under the terms, conditions and
provisions of this Lease and the pro-rata portion of the monthly rent for said
month shall be paid, and the term of this lease shall commence on the first day
of the month following that in which possession is given. Lessee shall also pay
to Lessor a condominium fee of Six Hundred Thirty-Four Dollars & Seventy Cents
($634.70) monthly beginning the first day of the month. Said fee shall be paid
Lessor no later than the fifth day of the month. In the event possession is
other than the first day of the month, monthly condominium fee shall be prorated
from the date Lessee takes possession.
5. RENT ADJUSTMENT: The rent payable pursuant to this lease shall be increased
annually on the anniversary date by an amount equal to Five Percent (5%) of
previous year's base rent. Such rent increase shall be paid in equal monthly
installments in addition to other rents described in this Lease and shall be
subject to all terms and conditions of this lease. In addition to the monthly
rent due, Lessee shall pay to Lessor its proportionate share of any increase in
real estate taxes, condominium assessments and insurance premiums over and above
those incurred by Lessor in the first year. Lessor will immediately notify
Lessee of any increase resulting from this provision and Lessee will pay one-
twelfth thereof beginning with the next regular monthly installment of rent.
6. SECURITY DEPOSITS: Lessor herewith acknowledges receipt from Lessee of NONE
Dollars (NONE) which Lessor is to retain without liability for interest, as
security for the faithful performance of all the covenants, conditions and
agreements of this lease. Provided the Lessee is not in default hereunder, the
security deposit shall be returned to Lessee no later than sixty (60) days after
termination. Lessor's mortgages shall not be liable to the Lessee for the
return of any security deposit unless such mortgages shall have received such
security deposit from Lessee or Lessor. Provided Lessee is in complete
compliance with all terms and conditions of this Lease.
7. LATE PAYMENTS: In the event any installment of rent is not paid within five
days after its becomes due, a late charge equal to ten percent (10%) of the
monthly rental rate shall be assessed and if not paid within thirty (30) days
such rent and late fee shall bear interest at the maximum legal rate and all of
the foregoing shall accrue as additional rent. Lessee further agrees to pay (or
reimburse Lessor if Lessor elects to pay) any and all attorney fees and court
costs incurred in connection with the collection of delinquent rents and all
other sums due to Lessor, or incurred due to any other default by Lessee.
8. COVENANT OF TITLE AND AUTHORITY: Lessor warrants that Lessor has fullright to
enter into and perform the Lessor's obligations under this lease for the full
term aforesaid and for the extensions herein provided, and has marketable title
to entire building and property upon which the Leased Premises are located in
fee simple, free and clear of all contracts, leases tenancies, agreements,
restrictions, violations, or defects in title of any nature whatsoever affecting
the demised premises, except for the matters specifically set forth in Exhibit
"C" hereto.
9. UTILITIES: Lessee shall pay any and all utility charges including gas,
electricity and telephone.
10. RENEWAL: This lease shall renew for successive additional terms of one (1)
year unless either party shall not less than sixty (60) days prior to the end of
any renewal term, by written notice to the other party, terminate the same.
Failure of either of the parties to serve such written notice of termination on
the other party shall extend the term for an additional periods of one (1) year
and obligate the Lessee to all of the terms and conditions hereof for such
renewal term, included the obligation to pay rent therefore, as set forth
herein.
11. REPAIRS AND MAINTENANCE: Lessee covenants to maintain the Leased Premises in
a fit and habitable condition during the term of this Lease. Lessee shall be
responsible for all maintenance including, but not limited to, plumbing pipes
and fixtures, electrical wiring, heating and air conditioning equipment, water
heater, windows, screens, doors, walls, ceilings, floors and carpets. Lessee
shall return the Leased Premises to the Lessor at the expiration or termination
of this Lease in the condition in which it was received, normal wear and tear
excepted, fit for immediate occupancy by others.
12. COMPLIANCE WITH INSURANCE: Lessee agrees to use the Leased Premises in a
clean, careful, orderly and sanitary manner solely for the purpose above
described. The Lessee covenants that it will not do nor permit to be done, nor
keep or permit to be kept upon the Leased Premises, anything which will
contravene the policy or policies of insurance against loss by fire or other
causes, or which will increase the rate of fire or other insurance on the Leased
Premises beyond the rate chargeable on the commencement date. Lessee covenants
that under no circumstances will it keep or permit to be kept, do or permit to
be done in or about the Leased Premises, anything of a character so hazardous as
to render it impossible to secure such insurance in companies reasonably
acceptable to the Lessor, and further, immediately upon notice, to remove from
the premises and/or to desist from any practice deemed by the insurance
companies or the Associations of Fire Underwriters as materially adversely
affecting the insurance risk.
13. WASTE: The Lessee shall use the Leased Premises with due care and shall not
permit or suffer any waste with respect to the Leased Premises.
14. ALTERATIONS: Lessee covenants that it will not make or erect any external or
internal alterations or changes or any kind to the Leased Premises without first
securing the written consent of the Lessor, after submission of the plans
therefore, and any such alterations or changes as shall be permitted in writing
shall be at Lessee's expense, and will, at the expiration of the terms or sooner
termination thereof, become the property of the Lessor. The Lessee will, in
making any such alterations or changes, fully comply with all national and state
laws, county ordinances, and regulation of public authority, as well as the
requirements of the Associations of Fire Underwriters, or similar governing
insurance body, all at Lessee's expense. Lessee covenants, at its expense,
promptly to comply with and do all things required by any notice served upon it
in relation to said Leased Premises or any part thereof, from any of the
departments of the County, including the Health Department, Fire Department and
Building Inspector's Office, or of the Commonwealth of Virginia or the United
States, if the same shall be caused by the Lessee's use or occupancy of the
Leased Premises, or any alteration, addition or change thereof made by Lessee.
Lessee covenants that no lien shall attach to the Leased Premises by virtue of
any repairs, alterations or changes made by Lessee, and that if any such lien is
filed, Lessee will cause the same to be removed within thirty days. For the
purposes of this Lease "alteration" shall include but not be limited to signage
of all types.
15. INSURANCE: (a) The Lessor shall during the term thereof carry general
liability insurance and casualty insurance of the building comprising the Leased
Premises, for at least ninety percent (90%) of replacement value and keep it
insured against: loss by fire or other hazards covered by the standard broad
form extended coverage in use in Virginia in which the premises are located.
The Lessee shall pay Lessor's prorata share of the cost of said insurance.
b) The Lessee shall, during the term hereof carry general liability insurance
and casualty insurance for the contents of the Leased Premises and the Lessee
shall pay all such insurance premiums from and after the time which the
Commencement Date occurs, which payments shall be made directly to the insurance
carrier or its agent.
c) The insurance policies shall provide for the mortgagee clause for the benefit
of any mortgage holder, and a certificate of such insurance shall be presented
to the Lessor and mortgagee prior to occupancy and yearly thereafter.
d) Notwithstanding anything in this Lease to the contrary, the Lessor shall not
be liable to the Lessee or to any other person to any extent or at any time or
in any event for any failure of water supply, electrical current, or other
utilities or for any injury or damage to the Lessee or to any occurring in
connection with any machinery, appliance, apparatus or the equipment placed on
the premises by Lessee or caused by or resulting from leakage vapor, rain, snow
or ice, running or overflow of water or sewage in any part of the premises, or
caused by or resulting from any action of the elements, or for any personal
injury (including death) or property damage caused by or from any carelessness,
negligence or improper conduct of the Lessee or the Lessee's customers,
employees or visitors.
17. DESTRUCTION: (a) If, during the term hereof, the Leased Premises are damaged
or destroyed so as to render at least twenty-five percent (25%) of the Leased
Premises not reasonably suitable for the purpose of Lessee's business and if, in
the reasonable opinion of Lessor's architect, the damage or destruction can not
reasonably be repaired within one hundred twenty (120) days from the date of
such injury, then Lessee shall have the right to terminate this Lease upon
thirty (30) days notice to Lessor. In the event of such termination, Lessee
shall immediately surrender the premises to Lessor and shall pay rent only to
the date of such damage or destruction. In the event of damage or destruction,
Lessee agrees to release and pay over to Lessor any and all rights it may have
to insurance proceeds or money it has actually received with respect to the
Leased Premises.
b) If the damage or destruction is repairable within one hundred twenty (120)
days , or if Lessee does not exercise its right to terminate as provided in
Paragraph (a) of this Section, Lessor shall rebuild and/or repair the Leased
Premises (exclusive of any personal property belonging to or improvements
affected by the Lessee) such injury until completion of rebuilding and/or
repair, the rent shall abate as follows:
(1) If the Leased Premises be usable during said period, for the purpose of
Lessee's business, rent shall abate in the proration that the areas damaged or
destroyed portion bears to the entire area of the Leased Premises.
(2) If the Leased Premises be usable during said period, for such purpose then
all rent shall abate from the date of said injury until completion of rebuilding
and/or repairs.
(3) Whether the Leased Premises be usable shall be resolved as mutually agreed
upon by the parties, but in the event the parties are unable to agree the matter
shall be settled in accordance with the Rules of the American Arbitration
Association.
18. SUBORDINATION: Lessee accepts this Lease and the tenancy created hereunder,
subject and subordinate to any deed of trust, or other security interest now or
hereafter made or granted by Lessor, which may be a lien upon or affect the
Leased Premises. Although such subordination shall be automatic, with further
act by Lessee, Lessee hereby appoints Lessor as its Attorney in Fact to Execute
and deliver any instrument that may be reasonably requested for the purpose of
confirming that this Lease is subject and subordinated to any such mortgage,
deed of trust or of other security interest granted by Lessor.
19. ATTORNMENT: Lessee agrees that upon any termination of Lessor's interest in
the Leased Premises, Lessee will, upon request, attorn to the person or
organization then holding title to the reversion of the Leased Premises ("the
Successor") and to all subsequent Successor's and will pay to the Successor all
of the rents and other monies required to be paid by the Lessee and perform all
of the other terms, covenants, conditions, and obligation in the Lease.
Although such attornment shall be automatic, without further act by Lessee,
Lessee hereby appoints Lessor as its Attorney in Fact to execute and deliver any
instrument that may be reasonably requested for the purpose of confirming such
Attornment of Lessee.
20. FIXTURES: Lessee may, at any time during the continuance of the term of this
lease or within thirty (30) days after the termination of the term hereof and
the payment of one (1) month's rent, remove from the Leased Premises all
fixtures not affixed to the building which Lessee may have purchased at its own
expense in said premises and if not removed during such period, such items shall
become the property of the Lessor. Upon the payment of one (1) months's rent as
aforesaid, Lessor agrees not the relet the premises during said thirty (30) days
period. Lessee agrees to repair any damage which may be done to the Leased
Premises resulting from the removal of said fixtures within a thirty (30) day
period. Except as herein provided, all alterations, improvements and fixtures
become the property of the Lessor upon the termination of the Lease.
21. INSPECTION OF PREMISES: The Lessee agrees that the Lessor shall have the
right to inspect the premises at all reasonable times during business hours, and
to place upon the same, sale or rent sign, in such part thereof as it may
designate, continuously during the last three (3) months of the lease term
provided such signs do not interfere with Lessee's use of the Leased Premises,
and conform to all laws and ordinances at Lessor's sole expense.
22. CONDEMNATION: (a) If after the execution of this lease and prior to the
expiration of the term of this lease, the whole of the Leased Premises shall be
taken under the power of eminent domain, then the term of this lease shall cease
as of the time when Lessor shall be divested of its title in the Leased
Premises, or such earlier time as Lessee's business is thereby interfered with
and rent obligation of the Lessee shall be adjusted as of the time of
termination.
(b) If only a part of the Leased Premises shall be taken under the power of
eminent domain and as a result thereof the Leased Premises shall be reduced to
such an extent that in the reasonable opinion of the Lessee the same are no
longer suitable for Lessee's business, Lessee may at its election terminate this
lease by giving notice of the exercise of its election with sixty (60) days
after it shall have received notice of such taking, and the termination shall be
effective as of the time that possession of the part so taken shall be required
for public use, or such earlier time as Lessee's business, in Lessee's
reasonable opinion, is thereby interfered with, and rent shall be adjusted as of
the time of termination. If only a part of the Leased Premises shall be taken
under the power of eminent domain and if this lease shall not be terminated as
aforesaid, then this lease shall continue in full force and effect and Lessor
shall, within a reasonable time after possession is required so as to put the
same into condition for use and occupancy by Lessee, and a just proportion of
the rent according to the nature and extent of the injury of the Leased Premises
shall be suspended or abated until that which may remain of the Leased Premises
shall be put into such condition by Lessor and thereafter a just proportion of
the rent according to the nature and extent of the part so taken shall be abated
for the balance of the term of this Lease.
(c) In the event of any taking of the whole or any part of the Leased Premises
under the power of eminent domain, the entire award shall belong to the Lessor
and the Lessee hereby assign to the Lessor any and all other rights, estates, or
interest of the Lessee now arising in and to the same and any thereof. Nothing
herein shall prohibit the Lessee from seeking its own award.
23. DEFAULT: (a) If any rent, additional rent or such other sum herein referred
to or any part there of shall be unpaid on the date of payment by the terms
hereof, and remain so for a period of five (5) days after Lessor shall have
given Lessee notice in writing of such default, then and in such case it shall
be lawful for Lessor, at Lessor's option, by summary proceeding or by any other
appropriate legal action or proceedings to terminate the term of this lease and
to enter into the Leased Premises, or any part thereof, and expel Lessee or any
person or persons occupying the Leased Premises, secure the Leased Premises, and
repossess the Leased Premises. Should the term of this lease at any time be
terminated under the terms and conditions hereof, or in any other way, Lessee
hereby covenants and agrees to surrender and deliver the Leased Premises
peaceably to Lessor immediately upon the termination of the term hereof. Lessor
agrees that in no event shall the nonpayment of rent or such other sums herein
referred to be the basis of the eviction of Lessee or the termination of the
term of this Lease unless said written notice shall have been served on Lessee
as herein provided and Lessee shall have failed to cure such default within said
five (5) day period after the service of said notice. In any event, if payment
is not made within five (5) days, Lessee shall pay a late payment fee in the
amount of ten percent (10%) of the amount due.
(b) It is mutually agreed that if Lessee shall be in default in performing any
of the terms or provisions of this lease other than the provision requiring the
payment of rent, or additional rent, the Lessor shall give to Lessee notice in
writing of such default, and if Lessee shall fail to cure such default within
twenty (20) days after receipt of such notice, or if the default is of such
character as to require more than twenty (20) days to cure after service of such
notice, then Lessor may cure such default for the account of and at the cost and
expense of Lessee, and the full amount so expended by Lessor shall immediately
be owing by Lessee to Lessor as additional rent.
(c) In the event of Lessee's default under subparagraphs (a) and /or (b) the
abandonment of the Leased Premises by Lessee, it shall be deemed as default by
the Lessee and a breach of this Lease, in which case the Lessor shall have the
following remedies.
(1) The rent shall become due and be paid up to the time of such re-entry,
dispossession and/or expiration, together with such expenses as Lessor may incur
for attorney's fees, brokerage, and/or putting the demised premises in good
order, or for preparing the same for re-rental; and/or
(2) The Lessor shall make best efforts to relet the premises or any part of
parts thereof, either in the name of Lessor or otherwise, for a term or terms
which may at Lessor's option be less than or exceed the period which would
otherwise have constituted the balance of the term of this lease and may grant
concessions or free rent in order to mitigate any damages causes in the event of
any early termination of the Lease; and /or
(3) Lessee or the legal representative of Lessee shall pay Lessor as additional
damages for the failure of Lessee to observe and perform Lessee's covenants, any
deficiency between the rent covenanted to be paid and the net amount, if any of
the rents collected on account of the lease or lease of the Leased Premised for
each month of the period which would otherwise have constituted the balance of
the term of this Lease.
(4) The failure of Lessor's reasonable efforts to relet the Leased Premises or
any parts or parts thereof shall not release or affect Lessee's liability for
damages. In computing such damages there shall be added to the deficiency such
expense as Lessor may incur in connection with reletting, such as attorney's
fees, brokerage and for keeping the demised premises in good order or for
preparing the same for reletting. Lessor shall undertake reasonable efforts to
minimize said expenses and to reduce the damages to the claimed against Lessee
and any suit brought to collect the amount of the deficiency for any month shall
not prejudice in any way the rights of Lessor to collect the deficiency for any
subsequent month by a similar proceeding. Lessor at Lessor's option may make
such alterations, repairs, replacement and/or decoration in the demised premises
as Lessor in Lessors' sole judgment consider advisable and necessary for the
purpose of reletting the Leased Premises; and the making of such alteration
and/or decorating shall not operate or be construed to release Lessee from
liability hereunder as aforesaid. In the event of a breach or threatened breach
by Lessee of any of the covenants or provisions hereof, Lessor shall have the
right of injunction and the right to invoke any remedy allowed at law or in
equity as if re-entry, summary proceeding and other remedies were not herein
provided for.
24. LESSEE HOLDING OVER: If the Lessee shall not immediately surrender
possession of the Leased Premises at the termination of this lease, or the
renewal thereof, the Lessee shall become a tenant from month to month, provided
rent shall be paid to an accepted by the Lessor, in advance, at the rate of
rental payable hereunder just prior to the termination of this Lease, but unless
and until the Lessor shall accept such rental from the Lessee, the Lessor shall
continue to be entitled to retake possession of the premises without any prior
notice whatever to Lessee. If the Lessee shall fail to surrender possession of
the premises immediately upon the expiration of the term or any renewal term, it
is agreed that all of the rights and obligations applicable during the term of
this Lease shall be equally applicable during such period of subsequent
occupancy, which shall be deemed to be month to month tenancy and not a renewal
or extension.
25. WAIVER: (a) Any waiver of any covenant or condition of this lease must be in
writing signed by the Lessor and shall extend to the particular case only, and
only in the manner specified, and shall not be construed as waiver of any right
to recover actual damages for any breach in any action at law, or to retain any
breach or threatened breach in equity or otherwise.
(b) The receipt by Lessor of rent or additional rent with full knowledge of the
breach of any covenant of the lease shall not be deemed a waiver of such breach.
No provision of this lease shall be deemed to have been waived by Lessor, unless
such waiver be in writing signed by Lessor. No payment by Lessee or receipt by
Lessor for a lesser amount than the monthly rent or additional rent herein
stipulated shall be deemed to be other than on account of the earliest
stipulated rent, nor shall any endorsement or statement on any check or any
letter accompanying any check or payment as rent be deemed in accord and
satisfaction, and Lessor may accept such check for payment without prejudice of
Lessor's right to recover the balance of such rent or pursue any other remedy in
this lease provided.
26. NOTICE: Any notice or other communication permitted or required to be given
by the provision of this Lease to be effective, must be given in writing by
depositing the same in the United States mails, postage prepaid, certified mail,
return receipt requested addressed to the parties at their respective address
shown herein or that such other address as the party concerned shall have
notified the other in writing. Any notice so given shall be held conclusively to
have been given three (3) business days after the date of such mailing, as
evidenced by the postal receipt obtained by the sender.
27. SECURITY AGREEMENT: As security for the Lessee's faithful performance of its
obligation created pursuant to this Lease, the parties agree that this lease, in
addition to creating a leasehold interest, is a security agreement granting a
security interest in personal property (tangible and intangible) and fixtures
owner by the Lessee location upon the Leased Premises and shall support any
financing state.
28. SIGNAGE: No sign, advertisement or notice shall be inscribed, painted or
affixed by Lessee on any part of the outside of the building expect, such signs
as shall be such size, color and style as Lessor shall approve. Marquis signage
shall be ordered and installed at the Lessee's expense. On a one time basis
building signage will be at Lessor's expense.
29. SUBLEASE OR ASSIGNMENT FEE: Laws agrees to pay Agent a fee of Two Hundred
Fifty Dollars ($250.), for Agent's services rendered in respect to each sublease
or assignment of Lessee's estate, or any part thereof, hereunder.
30. MISCELLANEOUS: (a) The use of the singular herein shall include the plural
and vice versa; and the use of the neuter personal pronoun shall include all
genders.
(b) The captions and heading herein are for convenience and reference only and
shall not be used to construe or interpret this lease.
(c) The covenants herein shall be binding upon, and the right hereunder shall
extend to and bind and inure to the benefit of the parties, their personal
representatives, successors and assigns.
(d) The invalidity or unenforceability of any provision of this lease shall not
affect or impair any other provisions or the validity and unenforceability of
the remainder of this lease.
(e) Lessee agrees to join Lessor in the grant of any easements, right-of-ways,
or the like which do not affect the Leased Premises, or, if reasonable, and the
granting of same does not adversely affect Lessee's business.
(f) This lease constitutes the entire agreement between the parties in respect
to the premises, and there are no oral agreements between the parties in respect
to the premises, and there are no oral agreements between the parties in
connection herewith.
31. AGENT'S LIABILITY: Lessor and Lessee agree that agent shall not be
personally liable to Lessor or Lessee in any way hereunder, including lack of
authority to act as Lessor's Agent. Any and all such liability being hereby
quit-claimed and waived by Lessor and Lessee, except for Agent's willful
misfeasance.
32. LEASING COMMISSION: For services rendered by Agent, Lessor agrees to pay
Agent a leasing commission of Six percent (6%), as shown by separate agreement
between Agend and Lessor. No sale, transfer, assignment, cancellation or release
(including a sale or conveyance to Lessee, his successors or assigns) shall
affect Agent's right to such commission which is hereby made a lien against the
Leased Premises during the term of this Lease or any new lease between Lessor
and Lessee. Said commission is to include a sale commission in the event the
Leased Premises is sold the Lessee.
33. TIME IS OF THE ESSENCE: Time is of the essence.
34. RULES AND REGULATIONS: Lessee covenants and agrees that he will fully comply
with the rules and regulations in regard to the building, wherein the said
demised premises are location, printed upon insert of this lease and marked
Schedule "A", and to comply with such alterations, additions and modifications
thereof as may from time to time be made by Lessor. Such alterations, additions
and modifications shall be made a part of this lease with the same effect as
though written herein, and Lessee covenants and agrees to all rules and
regulations and that all alterations, additions and modifications thereof shall
be faithfully observed by the Lessee, the employees of the Lessee and all
persons invited by the Lessee into said building.
35. EXECUTION: This lease is not binding on Lessor until it is signed,
acknowledged and delivered by or on behalf of Lessor.
36. ATTACHMENTS: See Schedule "A" - Rules and Regulations (Attached)
The parties hereto have executed this Lease at the place and on the date
specified immediately adjacent to their respective signatures.
EXECUTED AT: LESSEE:
Lincolnshire, Illinois Morgan Products Ltd.
City and State Company Name
ON: BY:
March 7, 1995 Dennis C. Hood
DATE Sr. Vice President
ADDRESS:
75 Tri-State International
Suite 222
Lincolnshire, Illinois 60069
EXECUTED AT: LESSOR:
Williamsburg, Virginia Jim Griffith, Builder, Inc.
City and State Company Name
ON: BY:
March 14, 1995 Jim Griffith
DATE
ADDRESS: BY:
AGENT: Diversified Investment, Realty & Financial Services
BY: J. Brown
SCHEDULE "A"
RULES AND REGULATIONS
(A) All blinds and drapes are to be approved by Lessor.
(B) No additional locks shall be placed upon any doors of the premises without
prior approval from the Lessor. Lessor shall furnish to Lessee keys (2) to the
premises. Any additional keys shall be furnished at the cost and expense of
Lessee. Upon the expiration or earlier terminations of the Lease, Lessee shall
surrender to Lessor all keys to the premises. All duplicate keys and lockset
repairs/reset request shall be made to the Lessor.
(C) Lessee and their employees are encouraged to park as far away from the
entrances as possible. This will enable customers and clients to enter and
conduct business without undue inconvenience. Certain spaces have been set aside
as visitor parking spaces and handicapped parking.
(D) Care of Roof - Lessee covenants (1) not to place (or suffer to be placed)
anything on the roof of the building in which the Leased Premises are located,
(2) not to cut into or drive nails into or otherwise mutilate said roof.
(E) Lessee is required to provide evidence of insurance adequate to cover all
Lessee liabilities as stipulated in Paragraph 16 (Insurance) of the Lease.
(F) No loud speakers, televisions, phonographs, radios or other devices shall
be used in a manner so as to be heard or sen outside of the premises or by other
tenants of the center.
(G) Lessee shall keep the premises at a temperature sufficiently high to
prevent freezing of water pipes, fixtures and sprinkler systems within the
Leased Premises.
(H) The plumbing shall not be used for any other purpose other than that for
which they are constructed, and no foreign substance of any kind shall be thrown
therein, and the expense of any breakage, stoppage, or damage resulting from a
violation of this provision shall be borne by Lessee.
(I) Lessee covenants to do and to pay for those things reasonable necessary or
required by law to keep the Leased Premised free of termites, roaches, rodents,
insects and other pests, and Lessee agrees that Lessor shall not be liable for
any damage cause thereby.
(J) In the event the appropriate authorities may so require, Lessee shall
maintain an adequate number of suite fire extinquishers on the Leased Premises
for use in case of local fires, including electrical or chemical fires.
(K) Before Lessor contracts for telephone installation services, Lessee shall
submit to the Lessor for approval the name of individual/company providing such
services.
The Lessor reserves the right to make changes in these rules from time to time.
LESSEE:
______________________ ______________________________
DATE________________________ _______________________________
DATE
LESSOR:
March 14, 1995 Jim Griffith, Builder, Inc.
DATE
March 14, 1995 Jim Griffith
DATE
AGENT: DIVERSIFIED INVESTMENT, REALTY & FINANCIAL SERVICES, INC.
March 14, 1995 J. Brown
DATE
ADDENDUM TO LEASE AGREEMENT DATED
MARCH 2,1995, BY AND BETWEEN
JIM GRIFFITH, BUILDER, Inc.
a VIRGINIA CORPORATION/Assigns, as LESSOR
AND MORGAN PRODUCTS Ltd, as Lessee
1. Conflict. In the event any of the terms and conditions set forth in this
addendum conflict with any terms or conditions set forth in the Lease Agreement,
the terms and conditions of this Addendum shall take precedence and be
controlling.
2. Term. The following sentence shall be added to the end of Section 1:
"Notwithstanding the foregoing, the Lessee shall have the option to terminate
the Lease at any time after the fifth (5) year of the Term. Lessee shall pay
Lessor an early termination penalty of nine (9) months rent provided Lessee
provides Lessor with not less than nine (9) months prior written notice of such
termination. In the event Lessee provides six (6) months notice, the penalty
shall be twelve (12) months rent."
3. Possession. Section 3 shall be deleted and shall be replaced with the
following:
"The Lessor covenants and agrees to have the Leased Premises completed and ready
for possession on or before the above commencement date (August 1, 1995) ,
barring strikes, insurrection, Acts of God and other casualties, or unforeseen
events beyond the control of Lessor. Lessee agrees to accept the possession of
said Leased Premises with ninety (90) days from receipt of notice by Lessor of
completion. The Lessee, at the expiration of the term shall deliver up the
Leased Premises in good repair and condition, excepting damages beyond the
control of the Lessee, reasonable use, ordinary decay, wear and tear, excepted.
Not withstanding anything herein to the contrary, rent and term of Lease shall
begin on the date the Lessee takes possession of the premises. If the occupancy
date is other than the first of the month, rent will be prorated on a daily
basis until the first day of the next month. That first day will also become
the first day of the TERM of this Lease.
4. Rent. The "condominium fee" referenced in Section 4 is the pass-through
amount of the condominium assessment for the Leased Premises. Lessor represents
that Lessor currently operates the condominium associates as a separate entity
and has established segregated accounts for the association. Lessor further
represents that such association provides all disposal service,, outside
lighting, water, sewer, structural insurance, association office expenses,
common area taxes, exterior painting and sign related to the Leased Premises.
5. Real Estate Taxes. Lessee's proportionate share of any increases in real
estate taxes as set forth in Section 5 shall be based on the taxes applicable to
the second year of the Lease term or such other year thereafter as the real
estate taxes are first calculated based on the fully developed value of the
Leased Premises.
6. Security Deposit. Section 6 will be deleted in its entirety, No security
deposit will be required.
7. Late Payments. Notwithstanding the provisions of Section 7, no late charge
shall be payable by Lessee unless and until Lessee fails to pay any installment
of rent within two (2) days after written notice of Lessee's failure to make
timely payment of any such installment is delivered to Lessee by Lessor.
8. Renewal. Notwithstanding the provisions of Section 10., Lessor shall
provide Lessee with six (6) months prior written notice of the expiration of the
Lease term and Lessee's termination notice requirements under Section 10.
9. Repairs and Maintenance. Notwithstanding the provisions of Section 11,
Lessor hereby agrees to be solely responsible for all structural aspects of the
Leased Premises, including, but not limited to, the foundation, roof and outside
walls of the Leased Premises. Lessor and Lessee acknowledge that the
Quarterland Commons Condominium Association is solely responsible for all
exterior areas of the Leased Premises, included, but not limited to, parking
lots, sidewalks, and landscaping.
10. Assignment and Subletting. The following sentence shall be added to the
end of Section 15. " Notwithstanding the foregoing, no guaranty shall be
required where the Sublessee is otherwise creditworthy as reasonably determined
by the Lessor."
11. Destruction. Notwithstanding the provisions of Section 17, in the event of
the destruction of 25% or more of the Leased Premises, either party shall have
the right to terminate the Lease.
12. Powers of Attorney. Lessee shall not grant the Lessor with any powers of
attorney. The last sentence of Sections 18 and 19 shall be deleted.
13. Condemnation. Section 22 shall be deleted in its entirety.
14. Security Agreement. Section 27 shall be deleted in its entirety.
15. Reasonableness. Lessor hereby agrees that wherever in the Lease its
consent is required or it is undertaking a discretionary action, it will act in
a reasonable manner.
16. The monthly rental schedule, which includes the base rent and condominium
fee, shall be as follows: BASE RENT
August 1, 1995 - July 31, 1996 $6,999.88 per month
August 1, 1996 - July 31, 1997 $7,349.87 per month
August 1, 1997 - July 31, 1998 $7,717.36 per month
August 1, 1998 - July 31, 1999 $8,103.23 per month
August 1, 1999 - July 31, 2000 $8,508.39 per month
August 1, 2000 - July 31, 2001 $8,933.81 per month
August 1, 2001 - July 31, 2002 $9,380.50 per month
Condominium Fee
August 1, 1995 through term unless notified of any increase: $634.70 per month
17. For services rendered by Agent, DIR Diversified Investment, Realty &
Financial Services, Lessor agrees to pay Agent a leasing commission of Six
Percent (6%) of monthly rent collected and includes any renewal, extensions,
expansion or new Lease between Lessor and Lessee. No sale, transfer,
assignment, cancellations or release (includes as sale or conveyance to Lessee,
his successor or assigns) shall affect Agent's right to such commission which is
hereby made a lien against the Leased Premises during the term of this Lease or
any new lease between Lessor and Lessee. Said commission is to include a six
percent sale commission, which would be paid by Lessor, in the event the Leased
Premises is sold to the Lessee.
In Witness Whereof this Addendum was executed this 7th day of March, 1995.
LESSEE:
MORGAN PRODUCTS Ltd.
By: Dennis C. Hood
Sr. Vice President
LESSOR:
Jim Griffith, Builder, Inc.
By: James Griffith, Pres.
3/14/95
Agent:
DIR Diversified Investment, Realty & Financial Services
By: J. Brown
Addendum to Lease Agreement dated
March 2, 1995 by and between
Jim Griffith, Builder, Inc.
A Virginia Corporation/Assigns, as Lessor
and Morgan Products Ltd., as Lessee
Addendum #18 following Item 17 of Addendum 1
The following condition is added to Addendum to above referenced lease as Item
#18.
#18. Lessor will furnish Lessee with evidence of the insurance to be maintained
hereunder by Quarterland Commons Owners Association and for Jim Griffith,
Builder, Inc. upon request of Lessee. Lessee shall be responsible for its
own business personal property and public liability insurance including
those trade fixtures which will be removed upon lease termination in
accordance with other conditions of the lease pertaining to such removal.
Upon completion of demised premises, Lessor shall be responsible for
providing casualty insurance with respect to all leasehold improvements
other than such trade fixtures, and shall be responsible for making sure
all premiums are kept current and paid in a timely manner.
LESSEE:
Dennis C. Hood 3/7/95
Sr. Vice President
Morgan Products Ltd DATE
LESSOR:
Jim Griffith, Builder, Inc. 3/14/95
James Griffith, Pres. DATE
AGENT:
J. Brown 3/14/95
Diversified Investment,Realty & DATE
Financial Services
Addendum to Lease dated March 2, 1995 by and between
Jim Griffith Builder, Inc.
a Virginia Corporation/Assigns, as Lessor
and Morgan Products Ltd, as Lessee
469 McLaws Circle, Williamsburg, VA 23185
Addendum #20 and 21 following Item 19 of Addendum 1 Dated March 7, 1995
The following terms are added to Addendum for above referenced lease:
#20. Lessee's rent for above referenced unit will commence on September 18,
1995. The pro-rated amount due for September, 1995 is: $3,033.16 Base
Rent and $299.29 for Quarterland Commons condominium fee. Thereafter
rental schedule for monthly payments and yearly adjustment dates will
be in accordance with existing lease agreement dated March 2, 1995 (
See Addendum to Lease Agreement #16.)
#21. Paragraph #4 Lease Agreement dated March 2, 1995 is hereby amended to
reflect that Lessee shall make base rent and applicable increases
payable to Diversified Investment, Realty & Financial Services, Inc.
at 161A John Jefferson Road, Williamsburg, VA 23185 (Telephone 804-
220-5688) until notified otherwise in writing by Lessor. Condominium
fee shall be paid to Quarterland Commons Unit Owners Association 483
McLaws Circle, Suite 3, Williamsburg, VA 23185 until notified other-
wise in writing by Lessor.
All other terms and conditions to remain the same.
Dennis C. Hood 10/3/95
Morgan Products Ltd. (Lessee) Date
_____________________________ ________________
Jim Griffith Builder (Lessor) Date
_____________________________ ________________
Diversified Investment Realty Date
Financial Services, Inc. (Agent)
[Letterhead and Logo Exhibit 10.29
601 Oregon Street
P.O. Box 2446
Oshkosh. WI 54903-2446
414/235-7170
Morgan Manufacturing
A Morgan Products Ltd. Company]
August 30, 1995
VIA FAX
Mr. Michael J. Morgan
Roseburg Forest Products
P. 0. Box 1088
Roseburg, OR 97470
Dear Mr. Morgan:
As stated in Paragraph 2 of the Lease Agreement dated March 7, 1986, and amended
March 5, 1988, between Morgan Products Ltd. and Roseburg Forest Products Co.,
Morgan Products Ltd. hereby exercises its option to extend the term of lease.
Per our telephone conversation the renewal option is modified to a term of 3
years, with the second option remaining as is.
If you have any questions, please call.
Sincerely,
Albert J. Ebert
Controller
Morgan Manufacturing
AJE:bk
L E A S E
THIS LEASE, made as of the 7th day of March, 1986, between ROSEBURG FOREST
PRODUCTS CO., an Oregon corporation, hereinafter referred to as "Lessor," and
MPL ACQUISITION CORPORATION, a Delaware corporation, hereinafter referred to as
"Lessee";
W I T N E S S E T H:
That, in consideration of the rents hereinafter specified and the
covenants, terms and conditions herein contained, the parties hereto do hereby
covenant to and with each other as follows:
1. Demised Premises.
Lessor does hereby lease and demise to Lessee, and Lessee hereby
leases from Lessor, on the covenants, terms and conditions hereinafter set
forth, the "Factory Building" and three adjacent outbuildings, described as the
"Existing Buildings" in Exhibit A hereto, together with all appurtenances to
said buildings and the use in common with Lessor, of such land area surrounding
such buildings necessary and convenient for Lessee's use of said buildings, all
situated on North Davis Street, Weed, in the County of Siskiyou, State of
California (herein referred to as the "demised premises") and all located in the
southern portion of Lessor's wood products property, located in Sections 1 and
2, Township 41 North, Range 5 West, M.D.M., Siskiyou County, California, being a
portion of the lands described in Parcel I in Deed from International Paper Co.,
a New York Corporation, to Roseburg Lumber Co., an Oregon Corporation, dated
February 7, 1983, recorded February 14, 1983 in Book 983, official Records, page
410, Siskiyou County Recorder's Office.
Said demised premises are leased as is subject to such covenants,
conditions, restrictions, easements, reservations and rights of way, if any, as
are now of record against said premises, any state of facts an accurate survey
might show, zoning rules, restrictions, regulations, resolutions and ordinances,
and building restrictions and governmental regulations now in effect or
hereafter adopted by any governmental authorities having jurisdiction.
If during the term of this Lease and any extension thereof any duly
constituted authority of the State of California having jurisdiction thereof
requires that the demised premises be partitioned or subdivided in accordance
with any California subdivision or partition law, Lessor agrees to cooperate
with Lessee in the filing of any such application or petition, including the
filing in Lessor's name, if required. Obtaining the required subdivision or
partition, however, shall be the responsibility of Lessee and all costs and
expenses shall be paid by Lessee.
TO HAVE AND TO HOLD the above-described demised premises, together
with the tenements, hereditaments and appurtenances thereunto belonging, at the
rental and for the term of this Lease hereinafter described.
2. Term.
(a) The term of this Lease shall commence March 7, 1986, and extend
to and including February 29, 1996.
(b) If this Lease shall then be in full force and effect and the
Lessee shall have fully performed all of its terms and conditions by Lessee to
be performed and Lessee is not then in default, then Lessor agrees that Lessee
shall have and is hereby granted two (2) successive options to extend the term
of this Lease for a term of five (5) years on each such option, such extended
term to begin respectively upon the expiration of the initial term of this Lease
or of this Lease as extended, and all the terms, covenants and provisions of
this Lease shall apply to each such extended term, including but not limited to
provisions for annual adjustments to rent, with the exception, however, that the
Lessee shall not have any further option to again extend the term of this Lease
following the exercise, if any, of the two (2) options to extend. If the Lessee
shall elect to exercise the aforesaid options, it shall do so by giving to the
Lessor notice in writing of its intention to do so not later than one hundred
eighty (180) days prior to the expiration of the initial term of this Lease or
of this Lease as extended.
3. Rent.
Rent in the amounts hereinafter provided which Lessee agrees to pay
shall be due and payable on the first day of each month in advance during the
term of this Lease and any extensions thereof. For the period ending February
28, 1991, Lessee agrees to pay to Lessor as rent without offset the sum of Four
Thousand Two Hundred Fifty and no/100 Dollars ($4,250.00) per month. Rent for
the initial partial month of the lease term shall be prorated on a daily basis.
Rent shall be payable on the date hereof and thereafter on the first day of each
month in advance by check payable to Lessor and mailed to Lessor at P. 0. Box
1088, Roseburg, Oregon 97470, or by check to any other payee or mailed to any
other address which Lessor, or any successor in interest of Lessor, may in
writing designate.
The monthly rental due and payable by Lessee to Lessor, which Lessee
agrees to pay to Lessor, commencing March 1, 1991, for each month of each rent
year thereafter during the term of this Lease and any extensions thereof (a rent
year for the purposes of this Lease is a twelve (12) month period commencing
March 1, 1991, and on each succeeding anniversary of such date) shall be
determined on or before March 1 of each rent year, commencing March 1, 1991, by
multiplying Four Thousand Two Hundred Fifty and no/100 Dollars ($4,250.00) by a
fraction, the numerator of which shall be the Consumer Price Index for all Urban
Consumers (CPI - U) - San Francisco-Oakland, California States; (1967=100) as
published by the Bureau of Labor Statistics, United States Department of Labor,
or successor index, for the preceding January, and the denominator of which
shall be such Index for January, 1986, provided, however, that under no
condition shall the monthly rental for each month be less than Four Thousand Two
Hundred Fifty and no/100 Dollars ($4,250.00) per month.
If said Index shall be discontinued, then another consumer price index
generally recognized as a reputable and authoritative index shall be substituted
by the mutual agreement of the Lessor and Lessee, and if the parties are unable
to reach an agreement within thirty (30) days following the commencement of any
such rent year then the determination of another consumer price index generally
recognized as a reputable and authoritative index to be used as a substituted
index shall be settled by arbitration. Each party shall appoint an arbitrator
and shall advise the other party of the choice. On the failure of either party
to appoint an arbitrator within fifteen (15) days of notification of the
appointment by the other party the person so appointed as arbitrator may appoint
an arbitrator to represent the party in default. The two arbitrators appointed
in either manner shall appoint a third arbitrator and the three arbitrators
shall then proceed to select a substitute index. The arbitration shall be
conducted in Oregon, and any award signed by any two of the three arbitrators
shall be binding and conclusive on each party. Lessor and Lessee shall each
bear the costs and expenses of the arbitrator representing such party, and the
costs and expenses of the third arbitrator shall be borne equally by Lessor and
Lessee.
4. Taxes
In addition to the Lessee's paying said monthly rent, in lawful money
of the United States of America, to the Lessor, as aforesaid, the Lessee will
pay to the Lessor, on account of rent for said demised premises, during said
term of this Lease and any extensions thereof, all taxes, assessments, charges
and impositions, general and special, ordinary and extraordinary, of whatever
nature, kind or description, levied and assessed against the demised premises
including any and all such taxes, assessments, charges and impositions on the
reversionary estate therein of the Lessor. If at any time during the term the
State of California or any political subdivision of the state, including any
county, city, city and county, public corporation, district or any other
political entity or public corporation of such state, levies or assesses against
Lessor a tax, fee or excise on rents, on the square footage of the premises, on
the act of entering into this Lease, or on the occupancy of Lessee, or any other
tax, fee or excise, however described, as a direct substitution in whole or in
part for, or in addition to, any real property taxes, Lessee shall pay before
delinquency that tax, fee or excise on rents. Taxes assessed during the term
but payable in whole or in installments after the termination of this Lease
shall be adjusted and prorated and Lessor shall pay the prorated share thereof
for the period subsequent to the term, and Lessee shall pay the prorated share
thereof for the term of this Lease.
Notwithstanding the foregoing, the Lessee shall not be liable for
increases in real property taxes that result from changes in ownership of the
demised premises. For purposes of this Lease "change in ownership" has the same
definition as in California Revenue and Taxation Code sections 60-62, or any
amendments or successor statutes to those sections. Lessor shall be obligated
to pay any such increase due to change in ownership. Further notwithstanding
the foregoing, if any general or special assessment is levied and assessed
against the premises, Lessor can elect to either pay the assessment in full or
allow the assessment to go to bond. If Lessor pays the assessment in full,
Lessee shall pay to Lessor each time a payment of real property taxes is made a
sum equal to that which would have been payable (as both principal and interest)
had Lessor allowed the assessment to go to bond.
The parties recognize that the taxes and assessments pertaining to the
demised premises are not assessed and levied by the County Assessor separately
from Lessor's wood products property of which the demised premises are a part
but that the County Assessor can furnish the assessed valuations attributable
each tax year to the demised premises, including the land and improvements, and
the amount of the taxes and assessments attributable to the demised premises.
Lessor will obtain this information each year from the County Assessor and will
invoice Lessee for the taxes and assessments attributable to the demised
premises at the time Lessor receives its tax statement from the County Tax
Collector, and Lessee agrees to pay such invoice within fifteen (15) days. If
Lessee does not agree with the amount of the taxes and assessments to be paid by
Lessee and the parties are unable to mutually agree upon the amount, the amount
shall be determined by arbitration following the same arbitration procedure as
set forth in paragraph 3 of this Lease except that the arbitrators named in all
instances are to be AIA appraisers qualified to make appraisals in Siskiyou
County, California.
Lessee may contest in good faith all such taxes, assessments, charges
and impositions against said demised premises as the Lessee reasonably may deem
unlawful, and, for such purpose, the Lessee may, at Lessee's own expense, prose-
cute such suits, actions or other proceedings in Lessee's own name or in the
name of the Lessor, or both, as the Lessee may deem appropriate, or, in like
manner, and on like conditions, the Lessee may defend suits, actions or other
proceedings prosecuted for the collection of taxes, assessments, charges and
impositions that the Lessee reasonably may deem unlawful, but the Lessee shall
save harmless and indemnify the Lessor from and against all losses, costs,
expenses and damages, including the Lessor's reasonable attorneys' fees,
incurred by the Lessor as a result of such prosecution or defense of such suits,
actions or other proceedings.
5. Utilities.
Lessee agrees that it will pay all charges for electricity, gas,
telephone, and all other utility services used on the demised premises. Sewer
and water services will be supplied to demised premises by the Lessor without
additional charge as long as such services can be furnished with existing lines
and facilities.
6. Use.
Lessee shall use the premises for manufacturing products from wood
and warehousing such manufactured products in accordance with applicable zoning
and for no other use without Lessor's prior written consent. Lessee shall
maintain the premises in a neat, sightly and orderly manner and shall neither
conduct, nor permit to be conducted, on, in or about said demised premises any
unlawful, improper or offensive trade, occupation, business or pursuit. Lessee
agrees that it will not make any unlawful, improper or offensive use of the
demised premises, will not suffer any strip or waste thereof, will not use the
demised premises in such a way or for such a purpose that the fire insurance
rate on the building of which the demised premises are a part is thereby
increased, will not permit any objectionable noise or odor to escape or to be
emitted from the demised premises, or do anything or permit anything to be done
about the demised premises in any way tending to create a nuisance.
7. Compliance with laws.
Lessee agrees, at Lessee's own cost and expense, to comply with and
observe all laws, ordinances, rules and regulations of the United States of
America, the State of California, the County of Siskiyou and the City of Weed
and all the duly constituted authorities thereof affecting the use and occupancy
of said demised premises. Lessee shall not, however, be required to comply with
any requirement to bring the building in compliance with any now or hereafter
existing building code. In the event it becomes necessary to comply with any
requirement to bring the building into compliance with any such building code
and the parties are unable to agree upon the manner thereof and who shall bear
the cost and expense, and without such compliance Lessee is unable to use the
demised premises for the use provided in this Lease, either party may terminate
this Lease by giving the other party thirty (30) days' written notice of
termination.
8. Repairs, Maintenance and Alterations.
Lessee agrees that Lessor shall be under no obligation to rebuild,
replace, maintain or make any repairs to the demised premises or to the
buildings or improvements thereon during the lease term except as provided in
paragraphs 10 and 13 of this Lease. Lessee shall, at all times during the lease
term, and at its own cost and expense, put, keep, replace and maintain in good
repair and condition all buildings and improvements erected on the demised
premises, or forming a part thereof (including all building equipment which is
an integral part of the building structure), both inside and outside, structural
and nonstructural, extraordinary and ordinary, except as provided in paragraphs
10 and 13 of this Lease. Lessee shall not make any structural alterations to the
premises or any substantial alterations without first obtaining Lessor's written
consent, which consent will not be unreasonably withheld.
9. Liens.
Lessee agrees that it will not permit any mechanics', materialmen's or
other liens to stand against the demised premises for work or materials
furnished Lessee, it being provided, however, that Lessee shall have the right
to contest the validity of any such lien or claim, but upon a final
determination of the validity thereof, Lessee shall immediately pay any judgment
or decree rendered against Lessee, with all proper costs and charges, and shall
cause any such lien to be released of record without cost to Lessor.
10. Fire Insurance.
(a) Lessor agrees that, until September 1, 1986, it, at its
expense, and thereafter Lessee agrees that it will, during the term hereof or
any extensions thereof, at its expense, keep in effect upon the demised
premises, fire insurance with extended coverage endorsement, written by a
responsible insurance company or insurance companies authorized to do an
insurance business in the State of California in the amount of One Million and
no/100 Dollars ($1,000,000.00) on the Factory Building. Such policy or policies
of insurance shall provide that payment for any losses covered under or by said
Policy or policies of insurance shall be made to Lessor. The party required to
provide such insurance shall provide a duplicate original of such policy or a
certificate verifying such coverage to the other party. Such policy or
certificate shall provide that such insurance shall not be terminated except
upon thirty (30) days' written notice to the Lessor and Lessee.
(b) In the event that the demised premises shall be damaged by
fire or other casualty to such an extent that the Lessee is unable
satisfactorily to conduct its operations therein, the Lessee shall notify the
Lessor that Lessee elects to terminate the Lease. Such notice shall be given
within sixty (60) days after such damage or destruction shall occur. Such
termination shall be effective thirty (30) days after such notice has been
given. The insurance proceeds shall be paid to and be the property of the
Lessor who shall pay to Lessee such amounts paid by the Lessee for security or
protection of the demised premises with the prior approval of Lessor.
(c) In the event the demised premises shall be damaged by fire
or other casualty, but Lessee shall be able satisfactorily to conduct its
operations therein, this Lease shall not terminate, and the Lessor shall repair
the same, except that Lessor shall not be obliged to expend an amount for
repairs or reconstruction greater than the insurance proceeds paid to Lessor and
available under the policy called for in subsection 10(a) above. Any proceeds
not so expended shall be the property of the Lessor. Lessee, at Lessee's own
cost, shall be permitted to make additional repairs not covered by such
proceeds.
(d) If, during the period prior to termination as provided in
subsection 10(b) or during the period of reconstruction, Lessee shall be unable
to occupy all or any part of the demised premises for the period of time between
the date of such fire and other casualty and termination or until such repairs
have been substantially completed, there shall be such an abatement of monthly
rental under paragraph 3 as the nature of injury or damage and its interference
with the occupancy of the Lessee shall warrant. It is further understood and
agreed that, if the demised premises be slightly injured and the damage so
occasioned shall not cause any material interference with the occupation, use
and operation by the Lessee, there shall be no abatement of rental.
(e) No abatement, diminution or reduction of rent except as
above specifically provided, charges or other compensation shall be claimed by
or allowed to Lessee, or any persons claiming under it, under any circumstances,
whether for inconvenience, discomfort, interruption of business, or otherwise
arising from the making of alterations, changes, additions, improvements or
repairs to any building and improvements now on or which may hereafter be
erected on the demised premises, by virtue of or arising from and during the
restoration of the demised premises after the destruction or damage thereof by
fire or other cause.
11. Waiver of Subrogation.
The parties release each other, and their respective authorized
representatives, from any claims for damage to any person or to the premises and
to the fixtures, personal property, Lessee's improvements and alterations of
either Lessor or Lessee in or on the premises that are caused by or result from
risks insured against under any insurance policies carried by the parties and in
force at the time of any such damage.
Each party shall cause each insurance policy obtained by it to provide
that the insurance company waives all right of recovery by way of subrogation
against either party in connection with any damage covered by any policy.
Neither party shall be liable to the other for any damage caused by fire or any
of the risks insured against under any insurance policy required by this Lease.
If any insurance policy cannot be obtained with a waiver of subrogation, or is
obtainable only by the payment of an additional premium charge above that
charged by insurance companies issuing policies without waiver of subrogation,
the party undertaking to obtain the insurance shall notify the other party of
this fact. The other party shall have a period of ten (10) days after receiving
the notice either to place the insurance with a company that is reasonably
satisfactory to the other party and that will carry the insurance with a waiver
of subrogation or to agree to pay the additional premium if such a policy is
obtainable at additional cost. If the insurance cannot be obtained or the party
in whose favor a waiver of subrogation is desired refuses to pay the additional
premium charged, the other party is relieved of the obligation to obtain a
waiver of subrogation rights with respect to the particular insurance involved.
12. Installation of Machinery and Equipment.
Lessee may place or install on and/or in the demised premises such
machinery and equipment as it shall deem desirable for the conduct of business
therein. Personal property, machinery and equipment used in the conduct of
Lessee's business (as distinguished from fixtures and equipment used in
connection with the operation and maintenance of the building and improvements)
placed by Lessee on or in said demised premises shall not become a part of the
realty, even if bolted or screwed or otherwise fastened to the premises, but
shall retain their status as personalty and may be removed by Lessee at any
time. The Lessor represents that as of the date of this Lease it does not own
any personal property, machinery and equipment used in the conduct of Lessee's
business and located upon the demised premises. Any damage caused the demised
premises by the removal of such property shall be repaired by Lessee at its
expense. Any trade fixtures or personal property belonging to Lessee, if not
removed within sixty (60) days after expiration or the sooner termination of
this Lease, shall be deemed abandoned and shall become the property of Lessor
without any payment or offset therefor.
13. Condemnation.
If the whole of the demised premises shall be taken under eminent
domain, then this Lease shall terminate on the date on which title shall vest in
the condemnor. If a portion of the demised premises shall be taken under
eminent domain and if after such taking the portion remaining cannot reasonably
be adapted to enable Lessee satisfactorily to conduct its operations therein,
then Lessor and Lessee shall each have the option, exercisable at any time prior
to the date on which title vests in the condemnor, and on not less than ten (10)
days' written notice to the other, to terminate this Lease on the date on which
title shall vest in the condemnor. Lessor promises and agrees, however, to give
Lessee at least thirty (30) days' written notice of the date upon which title
shall vest in condemnor. If neither Lessor nor Lessee shall exercise the option
to terminate herein granted, or if the taking is not of sufficient extent to
cause the option to arise, then this Lease shall continue in full force and
effect for the remainder of the term, with the Lessor making the necessary
repairs and replacement caused by the taking, and the monthly rental shall be
adjusted so that the Lessee shall be required to pay for the remainder of the
term only such portion of such annual fixed rental as the value of the part of
the premises remaining after the taking bears to the value of the entire
premises at the time of condemnation. In no event shall Lessee be entitled to
payment from Lessor of any consideration or either the termination or partial
loss of occupancy, nor shall Lessee be entitled to any part of an award, if any,
which may be made in the exercise of eminent domain, whether before or after
condemnation proceedings are instituted, and all rights of action and claims for
damages thereon shall inure solely to the benefit of the Lessor. Lessee shall
have the right, however, to claim and recover from the condemning authority
compensation for leasehold improvements and any loss to which Lessee may be put
for Lessee's moving expenses, business interruption or taking of Lessee's
personal property (not including Lessee's leasehold interest) provided that such
damages may be claimed only if they are awarded separately in the eminent domain
proceedings and not out of or as part of the damages recoverable by Lessor. The
term "eminent domain" shall include the exercise of any similar governmental
power and any purchase or other acquisition in lieu of condemnation.
14. Indemnity Insurance.
Upon the execution of this Lease, the Lessee shall, wholly at the
expense of the Lessee, obtain, and thenceforth during said term of this Lease
the Lessee constantly shall, wholly at the expense of the Lessee, maintain,
indemnity insurance by means of which the Lessor shall at all times be insured
and indemnified against any and all loss, liability and damage whatever for
personal injury and property damage, or either, resulting from, or alleged to
have resulted from, negligence or the condition or use of said demised premises
or of any sidewalk or way adjacent to said demised premises, with policy limits
in an amount not less than $250,000 for property damage and in an amount not
less than $1,000,000 for personal injury (whether or not resulting in death)
suffered by one person and $2,000,000 for personal injuries (whether or not
resulting in death) suffered by more than one person in one occurrence. Each
policy of such indemnity insurance so to be obtained and maintained by the
Lessee, as aforesaid (and each renewal thereof), shall be executed by a good,
safe and reliable insurance company, duly licensed to transact such insurance
business in the State of California, as the insurer, and a certificate of
insurance for each such policy of such indemnity insurance (and each renewal
thereof) shall, forthwith upon the issuance thereof, be delivered by the Lessee
to the Lessor to be held by the Lessor during the existence of this Lease.
15. Holding Lessor Harmless.
Independently of said obligation of the Lessee so to obtain and
maintain said indemnity insurance, as aforesaid, the Lessee shall at all times
save the Lessor harmless from, and keep the Lessor fully indemnified against,
any and all such loss, liability and damage whatever on account of personal
injury (whether or not resulting in death) and property damage, or either,
resulting from, or alleged to have resulted from, any of, or all, the causes
above mentioned, it being hereby specifically agreed that the Lessor shall not
be liable for any personal injury or property damage suffered or occurring in,
on or about said demised premises or the use by the Lessee of the sidewalks or
ways adjacent thereto at any time, and that payment in satisfaction of each, or
any, claim, demand or judgment arising out of each, or any, such personal injury
or property damage shall be the obligation of the Lessee, and shall be made by
the Lessee, wholly at the expense of the Lessee, and that the Lessee will
defend, wholly at the expense of the Lessee, any and all actions, suits and
proceedings instituted against the Lessor arising out of any and all such
personal injury and property damage, or either, including without being limited
to any and all attorneys' fees, court costs and incidental expenses incurred in
such defense of the Lessor. The Lessor shall give to the Lessee notice in
writing in the manner hereinafter provided for the giving of notice, of the
service on the Lessor of summons, subpoena or process in any such action, suit
or proceeding at least five (5) days prior to the return day of such summons,
subpoena or process, unless service shall be made upon the Lessor within five
(5) days preceding the return day, in which latter event the Lessor shall give
the Lessee immediate notice of such service.
16. Assignment.
Lessee shall not voluntarily assign or encumber its interest in this
Lease or in the premises, or sublease all or any part of the premises, or allow
any other person or entity (except Lessee's authorized representatives) to
occupy or use all or any part of the premises, without first obtaining Lessor's
written consent. Any assignment, encumbrance or sublease without Lessor's
written consent shall be voidable and, at Lessor's election, shall constitute a
default. No consent to any assignment, encumbrance or sublease shall constitute
a further waiver of the provisions of this paragraph. Lessor will not
unreasonably withhold its consent. Notwithstanding the foregoing, the Lessor's
consent shall not be required in the event of any assignment of the Lease or a
subletting of all or a portion of the demised premises to a party which is a
related entity of the Lessee. A "related entity" for purposes of this Lease
shall include a parent corporation or company owning a majority of the voting
shares in the Lessee, a successor corporation which shall have assumed and
agreed to pay the obligation of the Lessee, an affiliated company or
corporation, i.e., a company or corporation in which the majority voting
interest is held by the same company or corporation holding a majority of the
voting shares in the Lessee or a subsidiary of the Lessee, i.e., a corporation
or company in which the Lessee owns a majority voting interest. Lessor hereby
consents to a sublease by the Lessee of the "Cut stock" operation to Big Valley
Lumber Company.
17. Default or Breach and Remedies.
If any rent reserved in this Lease is in arrears for ten (10) days
after it is due and payable, or if the Lessee defaults in the performance of any
other covenant or provision of this Lease and the default is not cured within
thirty (30) days after written notice of the breach is given to the Lessee by
the Lessor, provided, however, if such noncompliance cannot be cured within the
30-day period this provision shall be satisfied if Lessee commences correction
within such period and thereafter proceeds in good faith and with reasonable
diligence to effect compliance as soon as possible, time being of the essence of
this Lease, or if the premises are abandoned, the Lessor may resume possession
of the premises and dispossess all persons and the goods and chattels of any
person, by force or otherwise, without being liable to prosecution therefor; and
the Lessor may either terminate this Lease by giving written notice of the
termination to the Lessee and recover from the Lessee all damages and costs
incurred by the Lessor, including the expense of recovering possession, or the
Lessor may refuse to terminate this Lease, put the premises in good order and
repair, make alterations and repairs and relet any part or all of the premises
for any part or all of the remainder of the term, or for a longer term, to a
tenant or tenants satisfactory to the Lessor and at such rental or rentals as
may seem adequate to the Lessor, all in the reasonable discretion of the Lessor.
The Lessor shall receive the rentals from the premises and apply them, first, to
the payment of the expenses of recovering possession and the rerenting of the
premises, secondly to the payment of the expense incurred in putting the
premises in good order and condition and making alterations and repairs to them,
and then to the payment of the rent due under this Lease and to the cost of
performing the other covenants of this Lease. The balance, if any, shall be
paid to the Lessee, and the Lessee shall remain liable for any deficiency, which
the Lessee agrees to pay monthly as it accrues. Notwithstanding any re-leasing
without termination, the Lessor may, at any time, elect to terminate this Lease
for the previous breach. Each of the remedies given to the Lessor is cumulative
and the exercise of one remedy shall not impair the Lessor's right to any other
remedy.
18. Bankruptcy.
If at any time during the term hereof proceedings in bankruptcy shall
be instituted by or against the Lessee and result in an adjudication of
bankruptcy, or if the Lessee shall file, or any creditor of the Lessee shall
file, or any other person shall file any petition under Chapter X or Chapter XI
of the Bankruptcy Act of the United States of America, as the same is now in
force or may hereafter be amended, and same be judicially approved, or if a
receiver of the business or assets of Lessee be appointed and such appointment
is not vacated within ninety (90) days after notice thereof to Lessee, or the
Lessee makes an assignment for the benefit of creditors, or any sheriff,
marshal, constable or keeper takes possession thereof by virtue of any
attachment or execution proceedings and offers same for sale publicly, and such
attachment or execution proceedings are not vacated, bonded, released or
satisfied within sixty (60) days from the date thereof, then Lessor may, at its
option, in either or any of such events, without notice to Lessee or any other
person or persons, immediately re-enter and take possession of the demised
premises and terminate this Lease, with or without process of law, such process
being expressly waived by Lessee. Upon such termination all installments of
rent earned to the date of termination and unpaid shall at once become due and
payable, and in addition thereto Lessor shall have all rights provided by the
bankruptcy laws relative to the proof of claims for an anticipatory breach of an
executory contract.
19. Remedies Cumulative and Not Exclusive.
No remedy herein conferred upon or reserved to lessor is intended to
be exclusive of any other remedy herein or by law or equity provided, but each
shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute.
20. Net Lease.
This is a net lease, it being the intention of the parties hereto that
Lessee shall pay as additional rent, without offset, all costs of insurance,
maintenance, taxes and other charges that are assessed or levied against said
premises, including without limitation the costs, taxes and charges set forth in
this Lease. All taxes, charges, costs and expenses which Lessee assumes or
agrees to pay hereunder, together with all interest and penalties that may
accrue thereon in the event of Lessee's failure to pay the same as herein
provided, all other damages, costs and expenses which Lessor may suffer or
incur, and any and all other sums which may become due, by reason of any default
of Lessee or failure on Lessee's part to comply with the covenants, agreements,
terms and conditions of this Lease on Lessee's part to be performed, and each or
any of them, shall be deemed to be additional rent and in the event of
nonpayment Lessor shall have all the rights and remedies herein provided in the
case of nonpayment of rent.
21. Lessor's Entry on Premises.
Lessor and its representatives shall have the right to enter and go
upon the demised premises at all reasonable times to examine and inspect the
same and for any other reasonable purpose.
22. Covenant of Title, Authority and Quiet Possession.
Lessor represents and warrants that Lessor has full right and lawful
authority to enter into this Lease for the full term aforesaid, and that Lessor
is lawfully seized of the entire premises hereby demised and has good fee simple
title thereto, and Lessor covenants that if Lessee shall discharge the
obligations herein set forth to be performed by Lessee, Lessee shall have and
enjoy during the term hereof the quiet and undisturbed possession of the demised
premises.
23. Surrender.
At the expiration or earlier termination of this Lease, Lessee shall
surrender to Lessor the demised premises in good condition and repair, allowance
being made for ordinary wear and tear and damage by casualty alone excepted.
24. Holding Over.
If Lessee shall hold over with the consent of the Lessor after the
expiration of the term of this Lease or any extension thereof, such tenancy
shall be from month to month only and upon all of the terms, covenants and
conditions hereof.
25. Attorneys' Fees.
If suit or action is instituted by either the Lessee or the Lessor to
enforce any provisions of this Lease or any rights granted to either hereunder
or hereby, the prevailing party may recover therein, or in any appeal thereof,
as attorneys' fees such sum as the court may adjudge reasonable, in addition to
costs and disbursements allowed.
26. Waiver.
The waiver by the Lessor of a default or breach made by the Lessee in
respect of any term, covenant, provision or condition contained in this Lease
shall not operate as a waiver of any subsequent default or breach made by the
Lessee in respect of the same, or any other, term, covenant, provision or
condition contained in this Lease.
27. Notices.
All notices herein required or permitted to be given to or served upon
either party shall be in writing. Any such notice shall be sufficiently given
or served if served personally on the person to whom written notice is to be
given or if sent by registered or certified mail addressed to such person at the
address set forth below as follows:
In the case of a notice to Lessor:
P. 0. Box 1088
Roseburg, Oregon 97470
In the case of a notice to Lessee:
601 Oregon Street
Oshkosh, Wisconsin 54903-2446
Either party may at any time change the place of giving notice by giving written
notice to the other in the manner above set forth.
28. Captions.
Paragraph captions in this Lease are used for convenience and
reference, only, and the words contained therein in no way shall be held to
explain, modify, amplify or aid in the interpretation, construction or meaning
of any of the terms, covenants, provisions or conditions contained in this
Lease.
29. Successors and Assigns.
The terms, covenants, provisions and conditions contained in this
Lease shall inure to the benefit of, and shall be binding upon, not only the
Lessor and the Lessee, respectively, but, also, their respective successors in
interest and assigns to the extent permitted.
IN WITNESS WHEREOF, the parties hereto have executed this Lease on the
day and year in this Lease first above written.
ROSEBURG FOREST PRODUCTS CO. MPL ACQUISITION CORPORATION
By: Frank H. Spears By: Michael Lupo
Assistant Secretary Vice President
LESSOR LESSEE
STATE OF OREGON, )
)
County of Multnomah )
On this 6th day of March, 1986, before me appeared FRANK H. SPEARS, to me
personally known, who, being duly sworn, did say that he is the Assistant
Secretary of ROSEBURG FOREST PRODUCTS CO., the within-named corporation, and
that the said instrument was signed in behalf of said corporation by authority
of its Board of Directors, and he acknowledged said instrument to be the free
act and deed of said corporation.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official
seal, this, the day and year first in this, my certificate, written.
Mabelle F. Conn
Notary Public for Oregon
My commission expires: May 20, 1986
STATE OF California
County of Shasta
On this 7th day of March, 1986, before me appeared Michael Lupo to me personally
known, who, being duly sworn, did say that he is the Vice President of MPL
ACQUISITION CORPORATION, the withinnamed corporation, and that the said
instrument was signed in behalf of said corporation by authority of its Board of
Directors, and he acknowledged said instrument to be the free act and deed of
said corporation.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official
seal, this, the day and year first in this, my certificate, written.
Viola M Bever
Notary Public for
My commission expires:
[Notary Seal
Official Seal
Viola M. Bever
Notary Public-California
Principal Office in Shasta County
My Commission Expires July 8, 1988] Exhibit A
[Map of property described as "Existing Buildings on North Davis Street, Weed,
California.]
Exhibit 10.30
OFFICE
LEASE
PARK PLAZA MALL & OFFICE COMPLEX
OSHKOSH, WISCONSIN
between
MORGAN PRODUCTS, LTD.
and
PARK PLAZA by OSHKOSH, INC.
INDEX
1. Section 1: Witnesseth L-1
2. Section 2: Demise; Premises L-2
3. Section 3: Term L-2
4. Section 4: Rental Base Rent L-2
5. Section 5: Condition of Suite at Commencement L-3
of Term
6. Section 6: Use L-3
7. Section 7: Use of Common Areas L-3
8. Section 8: Utility and Building Services L-4
9. Section 9: Electrical Service and Charge L-5
10. Section 10: Repairs L-5
11. Section 11: Assignment; Sublease. L-6
12. Section 12: Compliance with Laws, Bldg. Rules and L-6
Reg
13. Section 13: Signs L-6
14. Section 14: Alterations L-7
15. Section 15: Fire Damage and Condemnation L-7
16. Section 16: Default by Tenant L-8
17. Section 17: Non-Liability of Landlord L-9
18. Section 18: Indemnity; Insurance L-9
19. Section 19: Surrender of Suite L-10
20. Section 20: Landlord's Right of Access L-10
21. Section 21: Covenants of Title and Quiet Enjoyment L-10
22. Section 22: Notices L-11
23. Section 23: Holding Over L-11
24. Section 24: Benefit L-11
25. Section 25: Force Majeure L-11
26. Section 26: Severability L-12
27. Section 27: Paragraph Headings L-12
28. Section 28: Governing Law L-12
29. Section 29: Entire Agreement L-12
30. Section 30: Nonwaiver L-12
31. Section 31: Estoppel Certificate L-12
32. Section 32: Limitation on Landlord's Liability L-13
33. Section 33: Miscellaneous L-13
34. Section 34: Addenda L-14
35. Section 35: Confidentiality L-14
36. Section 36: Payment for Leasehold Improvements L-14
37. Section 37: Americans with Disabilities L-14
38. Section 38: Hazardous Wastes L-14
Exhibit A - Site Plan
Exhibit B - Legal Descriptions
Exhibit C - Building Rules and Regulations
PARK PLAZA MALL & OFFICE COMPLEX
OFFICE LEASE
Park Plaza Mall & Office Complex
246 Park Plaza
Oshkosh, Wisconsin 54901
THIS AGREEMENT, made this _ day of August, 1995, by and between Park Plaza
of Oshkosh, Inc., (the "Landlord") and Morgan Products, Ltd. Oshkosh, Wisconsin
(the "Tenant").
WITNESSETH:
SECTION 1:
LANDLORD: PARK PLAZA OF OSHKOSH, INC.
TENANT: MORGAN PRODUCTS, LTD.
SUITE: The address of the Suite is 500 Park Plaza, which is located in
the Park Plaza Mall & office Complex consisting of approximately
16,000 square feet of Rentable Area, as outlined on the Site
Plan of the Park Plaza Mall and Office Complex, which is
attached hereto as Exhibit A.
TERM: Sixty (60) months (and such fraction of a month, if any, prior
to the first day of the first full calendar month), commencing
on the date that the Suite is available for occupancy and ending
on the last day of the 60th full month of the Lease Term.
Tenant shall have the option to extend the term of this Lease
for an additional sixty (60) month term (the "Extension Period")
by notifying Landlord in writing at least 180 days prior to the
end of the initial 60 month period (the "Initial Term") that it
wants to exercise this option to extend.
The date on which the Suite will be available for occupancy by
Tenant shall be seventy (70) days following the later of the
date of the execution of this Lease or the date that final
architectural drawings, that are in biddable form, are approved
by Tenant. If, however, any delays are due to change orders or
modifications requested by Tenant, then Landlord shall not be
obligated to have the space ready for occupancy within the
seventy (70) day period, but such seventy (70) day period shall
be extended to the extent, and only to the extent of the delay
caused by such modifications requested by Tenant. In any event,
Landlord shall provide fourteen (14) days prior written notice
of the occupancy date.
BASE RENT: $14,400 per month which includes Operating Expenses, Taxes,
Insurance, and charges for heating, and air conditioning
service. If Tenant exercises the option to extend the term of
this Lease then the rent for the entire Extension Period rent
shall be $14,400 per month adjusted for the increase in the
Consumer Price Index during the initial term of this Lease
calculated in accordance with Subsection (4)(S) below.
ELECTRICAL
SERVICE: Tenant shall pay the costs of its own Electrical Service which
shall be separately metered and will be billed to directly to
Tenant.
USE: Tenant shall use the space for offices and for a showroom and such
other uses as are approved by the Landlord.
SITE: The real estate tax parcel on which the Park Plaza Mall and
Office Complex is located, as such tax parcel is currently
constituted or as it may be modified in the future. The legal
description of the Site is attached hereto as Exhibit B.
SECTION 2:
Demise; Premises. Landlord hereby leases unto Tenant, and Tenant
hereby leases from Landlord, the Suite indicated in Section (1) above in the
Park Plaza Office Complex (the "Building") adjacent to and which constitutes a
part of the integrated office, shopping center and other mixed use development
known as Park Plaza Mall and Office Complex (herein called the "Center") located
in Oshkosh, Wisconsin.
SECTION 3:
Term. This lease shall be for the term indicated in Section (1)
above.
SECTION 4:
Rental. (A) Base Rent. During the initial term of this Lease, Tenant
shall pay basic rental ("Base Rent") for the Suite in equal monthly installments
as set forth in Section (1) above (which amount shall include Operating
Expenses, Taxes, Insurance and charges for heating and air conditioning) on or
before the first day of each calendar month during the term. Such Base Rent
shall be payable in advance, without previous demand therefore and without
deduction or set-Off or right to assert any counterclaim in any action for rent.
Base Rent shall be computed based on Rentable Area of the Suite.
"Rentable Area" of the Suite means floor space actually available for
discretionary use of each tenant for the accommodation of its personnel,
furniture and equipment. It is computed for the depth of the Suite by measuring
from the tenant side (the interior face) of the corridor wall to the tenant side
of the exterior glass. The width of the Suite shall be measured from the center
of the party wall partition, except if the Suite or any part thereof is end
space, in which event the measurement shall include the full width of the end
wall(s). No deductions shall be made for columns and projections necessary to
the Building.
(B) Consumer Price Index Adjustment for Extension Period. If Tenant
exercises its option to extend the term of this Lease and landlord is required
to either replace or repair carpet or wall covering or perform other renovation
work required by Tenant, then the Base Rent in effect for the Extension Period
shall be the Base Rent for the initial term of this Lease increased by the
increase in the Consumer Price Index from December 1, 1995 through November 30,
2000 however this adjustment shall not exceed $1.80 per square foot. In the
event this maximum adjustment is made the monthly Base Rent for each month
during the Extension Period shall be $16,800.
"Consumer Price Index" shall mean the United States Department of
Labor, Bureau of Labor Statistics, Consumer Price Index for All Urban Consumers
(United States City Average, All Items), as currently published in the "Monthly
Labor Review" of the Bureau of Labor Statistics of the United States Department
of Labor. In the event the Bureau of Labor Statistics cease publishing the
index number for the United States City Average, the most comparable index
figure for the City of Oshkosh shall be used in lieu thereof. In the event the
Bureau ceases publishing the Consumer Price Index, or materially changes the
method of its computation, components, base year, consumers whose experiences
are included therein, or other features thereof, Landlord and Tenant shall
accept comparable statistics on the purchasing power of the consumer dollar, as
published at the time of such discontinuation or change, by the Bureau, another
governmental agency or unit, or a responsible financial periodical of recognized
authority, to be then chosen by Landlord.
SECTION 5:
Condition of Suite at Commencement of Term. Landlord and Tenant are
concurrently working with an architect to design the floor plan the Suite.
Landlord shall be responsible for having the space renovated in accordance with
the final architectural drawings approved by Tenant. In order to ensure that
the project is completed within this seventy (70) day period, the landlord shall
make all the final decisions regarding the construction of the improvements to
the Suite, provided that the construction complies with the architectural plans
approved by Tenant. The Suite shall be built out to a finish comparable to
similar office space in the Building which was recently renovated for other
tenants (however no chair rails or crown moldings will be included). Landlord
will provide Tenant with an allowance for carpeting of $18.00 per square yard
(installed) and for wall covering equal to $.62 per square foot of floor space
(Tenant may at its own cost have more expensive carpeting and wall covering
installed in the Suite as other office tenants have elected to do. ) Landlord
will provide standard electrical and telephone access. Any special telephone or
computer hook-ups or switches shall be paid for by the Tenant. Any special
lighting for a showroom shall also be paid for by Tenant. Windows will be cut
into the walls on the west and south walls of the Building. Tenant shall not
allow outside contractors to do any work in the Suite without prior written
approval by Landlord or Landlord's architects.
SECTION 6:
Use. The Suite shall be used only for the purposes set forth in
Section (1) above.
SECTION 7:
Use of Common Areas. Tenant shall be entitled to the reasonable
nonexclusive use of the parking areas, sidewalks, roadways, public and common
washrooms, lounges and shelters, any other common areas and facilities within or
upon the Site, and the elevators, stairways, corridors and additional common
areas within the Building, all as they may from time to time exist, but such use
shall be in common with Landlord and all others to whom Landlord has or may
hereafter grant rights to use the same, and such use shall be subject to such
rules and regulations (hereinafter referred to as "Rules and Regulations") as
Landlord may from time to time adopt governing the use, occupancy and operation
of the common areas of the Building, including but not limited to the Building
Rules and Regulations. Rules and Regulations now in force are attached hereto
and commencing at page R-1 hereof. Landlord shall have the right to close any
or all portions of the common areas and facilities to such extent as may, in the
opinion of Landlord's counsel, be necessary to prevent a dedication thereof or
the accrual of any rights to any person or to the public therein and to close
temporarily, if necessary, any part of the common areas in order to discourage
noncustomer parking; and Landlord may do such other acts in and to the parking
areas as in its judgement may be desirable to improve the convenience thereof.
Landlord shall at all times have full control, management and direction of the
common areas, and shall maintain and repair the same. The parking and other
common areas and facilities located from time to time on the Site are available
for use by occupants of other premises in the Center, their customers,
employees, agents, contractors and invitees. Landlord reserves the right to
reduce, increase, enclose or otherwise change from time to time the
configuration, size, number, location, dimensions, identity, types of stores,
type of offices and the nature of the common areas and facilities, the other
tenancies, premises and buildings upon the Site and the Center, and the right to
construct additional building and additional store, and to create additional
leasable building area(s) through enclosure(s) of or construction in common
area, and to place signs on the building(s) located to transfer, lease,
sublease, otherwise convey, dispose of, enlarge, decrease, or change the size
and dimensions of the Site or the Center. Landlord may designate from time to
time the parking areas to be used for the parking of Tenant's delivery and other
vehicles and those driven by Tenant's employees, which areas may be on the Site,
on the Center or on land in the vicinity of the Center. Tenant agrees to park
its delivery and other vehicles (and to exert its best efforts to cause its
employees to park) in such designated areas. Tenant shall not at any time
interfere with the rights of Landlord and other tenants, and their respective
concessionaires, officers, employees, agents, customers and invitees, to use any
part of the parking areas and other common areas.
SECTION 8:
Utility and Building Services. (A) Landlord shall: (i) furnish heating
and air-conditioning service for the Suite in such manner and without additional
charges to Tenant so as to provide a temperature and humidity condition required
in Landlord's judgement for comfortable occupancy of the Suite as a general
office under normal business operations during the seasons and hours specified
in the Building rules; and (ii) furnish without additional charge to Tenant a
reasonable quantity of water for lavatory purposes, elevator service for the
Building to the extent provided for in the Building rules and normal lighting in
the common areas of the Building.
(B) Tenant shall be responsible for contracting with a cleaning
service for the cleaning of the Suite.
(C) Tenant shall be responsible for the costs of Electrical Service
for lighting of the Suite and operation of normal office machines and equipment.
This Electrical Service shall be separately metered and billed directly to
Tenant.
(D) It Tenant requests and if Landlord elects to make available to
tenants in the Building services or supplies, other than those services or
supplies listed in subsections (A), (B), and (C) of this Section (8) above,
(including but not limited to towels, music, special heating or air-conditioning
in excess of that provided pursuant to Subsection 8 (A) above, special security
services, hanging pictures or moving furniture), or arranges a master contract
therefor, Tenant agrees to obtain its requirements, if any, therefor from
Landlord, provided that Landlord's charges to Tenant for such services shall be
the actual Cost to Landlord plus fifteen percent (15%) for administration and
overhead. If after commencement of the term of this Lease, Tenant's
requirements for water or other services or supplies exceed the quantities
provided by Landlord (for example, if the Tenant uses dental facilities or a
water-cooled air-conditioner), Landlord and Tenant shall negotiate an additional
monthly charge for such services or supplies. Payment for the foregoing
services shall be made monthly within ten (10) days following the date of
Landlord's bill therefor to Tenant. Landlord may, for any reason whatsoever and
at any time, discontinue supplying these additional services, such as water,
special heating or air-conditioning or supplies upon reasonable notification to
the Tenant without any liability or responsibility therefor. No such
interruption or discontinuance shall relieve Tenant from performance of any of
its obligations hereunder.
(E) Landlord shall not be liable to Tenant, in damages or otherwise,
should the furnishing of water, electricity, heat or air-conditioning or any
other service undertaken or elected to be supplied by Landlord be interrupted
because of necessary repairs or improvements or for any cause beyond Landlord's
control. Landlord shall use reasonable efforts to minimize disruption caused by
such necessary repairs or improvements and, except in an emergency, shall if
feasible provide Tenant advance notice of such interruptions in service.
(F) Landlord shall not be liable under any circumstances for loss or
injury to property or person, however occurring, through or in connection with
or incidental to the furnishing of or the failure to furnish any of the
foregoing, including documents, files or other property damaged, destroyed, or
lost through acts or omissions of the personnel performing janitorial, cleaning
or other services unless such loss or injury results from the failure of
Landlord to respond within a reasonable amount of time after receiving written
notice from Tenant about a condition requiring corrective action.
SECTION 9:
Electrical Service and Charge. Tenant shall pay the costs of its own
Electrical service which shall be separately metered and will be billed directly
to Tenant.
SECTION 10:
Repairs. Landlord shall, at Landlord's cost and expense, make all
structural and exterior repairs to the Suite and Building and all repairs to the
water, electrical, heating, air-conditioning and plumbing equipment and
facilities located in the Suite or Building and owned by Landlord, unless such
repairs are required by reason of willful conduct or the negligent acts or
omissions of Tenant, its employees, contractors, customers or invitees, or the
particular nature of Tenant's use of the Suite, in which case the cost of such
repairs shall be made at Tenant's cost and expense by Landlord's contractor.
Tenant shall give Landlord written notice of the need for any such repairs to be
made by Landlord, and Landlord shall be under no liability for damage or injury,
however caused, in the event of its failure to make such repairs unless it shall
have received such notice from Tenant and failed to make such repairs within a
reasonable time after receipt of such notice. Except as above provided in this
Section (10), Tenant shall at its cost and expense keep the Suite in good
condition and repair. Unclogging of the plumbing system of the Suite shall be
at Tenant'S sole cost and expense, and shall be done only by Landlord's
contractor. Tenant shall, at its expense, perform all decorating of the Suite.
The plans and specifications for any repair work, alterations or additions to be
performed by Tenant shall be subject to Landlord's prior written approval and
Tenant shall indemnify Landlord against all construction liens against the Suite
or Site for materials or labor purchased, employed or hired in connections with
the construction, repair, or alteration of the Suite, and shall cause any such
liens which are filed to be immediately removed and discharged of record.
Tenant shall perform all of the foregoing work only with contractors,
materialmen and laborers approved in advance by Landlord. Approval by Landlord
of plans and specifications shall not constitute an assumption of responsibility
for their accuracy or sufficiency, the same being the sole responsibility of the
Tenant.
SECTION 11:
Assignment; Sublease; Change in Control. Tenant shall not assign,
sell, pledge, mortgage or otherwise encumber or transfer this Lease or any
interest therein or sublease any part or all of the Suite without Landlord's
prior written consent and shall not permit any transfer of its interest in the
Suite or this Lease by operation of law. Said consent shall not be unreasonably
withheld or delayed. In no event shall any assignment or sublease be for other
than the use expressly permitted hereunder. In the event that any party
acquires or has agreed to acquire substantially all of Tenant's assets, either
through an outright purchase or as a result of a merger, consolidation,
liquidation, or other similar transaction, then Tenant must immediately notify
Landlord of any such transaction. Tenant shall cause the entity that has
acquired substantially all of its assets to guarantee Tenant's or any successor
corporation's performance under the terms and conditions of this Lease, unless
Landlord chooses to waive said guarantee. Prior to agreeing to any such
transfer, Tenant shall provide Landlord with financial statements of the
acquiring entity so that Landlord can determine the financial condition of the
acquiring entity. Notwithstanding Landlord's consent to any of the foregoing,
Tenant shall remain liable to Landlord for the payment of rental then due, and
thereafter to become due, and the performance of all other obligations of Tenant
hereunder for the balance of the term hereof.
This Lease may be assignable to any corporation affiliated with Tenant upon
notice to Landlord.
SECTION 12:
Compliance with Laws, Building Rules and Regulations. Tenant shall
not use or permit to exist upon the Suite anything that will increase the cost
to Landlord of any insurance now or hereafter carried on the Building by
Landlord, or that will invalidate any such insurance, or that will tend in any
way to create a nuisance or to injure the reputation of the Building, the Site
or the Center in the judgement of Landlord. Tenant shall comply with all
statutes, orders, rules, ordinances, regulations and requirements of law, and
all directions of public officers affecting the Suite and all rules, orders,
recommendations, regulations and requirements of the local rating bureau, and
Rules and Regulations established by Landlord. Not by way of limitation because
of the specification, Tenant shall also comply fully with the Medical Waste
Tracking Act of 1988 and any and all regulations promulgated pursuant thereto,
which includes requirements for separation of specified medical wastes, use of
special containers appropriately labeled to contain such medical waste and
accurate record-keeping and tracking of the medical waste. A list of the
Building Rules and Regulations is attached hereto as Exhibit C.
SECTION 13:
Signs. Tenant shall not, without Landlord's prior written consent,
install, affix or use: (a) any signs, lettering or advertising media of any
other kind, blinds, shades, curtains, draperies or similar items on the exterior
of the Suite or Building or in the interior of the Suite in such a manner as
shall be visible from outside the Suite, or (b) any awnings, radio or television
antennae or other objects or equipment of any nature whatsoever, on the exterior
of the Suite.
Tenant shall be permitted to erect a sign on the outside wall on the
west side of the Building and on the stair tower to the west of the Suite. Any
sign erected by Tenant shall conform to the existing exterior signs presently
affixed to the Center and shall be subject to approval by Landlord. Such
permission will not be unreasonably withheld.
No name, symbol, mark, design or insignia adopted by Landlord for use
in connection with the Building, the Site or the Center shall be used by Tenant
in the conduct of business in the Suite or elsewhere without the prior written
consent of Landlord. All rights to and use of the exterior walls of the Suite
and the roof of the Building are reserved to Landlord.
SECTION 14.1
Alterations. Tenant shall not make any alterations or other changes
of any kind to the Suite without Landlord's prior written consent. In the event
Landlord's prior written approval is obtained, Tenant agrees to pay promptly
when due the entire cost of any work in the Suite undertaken by Tenant so that
the Building and the Site shall at all times be free of liens for labor and
materials; to procure all necessary permits before undertaking such work; to do
all of such work in a good and workmanlike manner employing materials of good
quality; to perform such work only with contractors previously approved in
writing by Landlord; to comply with all governmental requirements; and to save
Landlord harmless and indemnified from all injury, loss, claims or damage to any
person or property occasioned by or growing out of such work.
SECTION 15:
Fire Damage and Condemnation. (A) If all or any part of the Suite or
the Building shall be destroyed or damaged by fire or other casualty, Landlord
shall have the right to terminate this Lease at any time during the ninety (90)
days following the occurrence of such destruction or damage by written notice to
Tenant. If Landlord does not so terminate this Lease, it shall thereafter
diligently proceed to repair or restore the Suite or Building to the condition
existing immediately prior to such destruction or damage. If the Suite or any
part thereof shall be rendered untenantable by any such destruction or damage, a
just proportion of the rental, based upon the number of square feet of area in
the Suite which are untenantable, shall be abated until the Suite or such part
thereof shall have been put in tenantable condition by Landlord. Landlord's
obligations shall be limited to the repair or restoration of such basic building
structure and facilities as Landlord furnished upon the commencement of the term
hereof. Each party hereby expressly waives any right of recovery it may have
against the other party for loss to the Suite or Building or contents of either
due to fire or any peril covered by the standard extended coverage endorsement
of the standard fire insurance policy, however caused, including such losses as
may be due to negligence of such other party, its agents, employees,
contractors, invitees, successors or assigns. All such policies of insurance
carried by Landlord or Tenant shall contain a provision that they are not
invalidated by the foregoing waiver, and such waiver shall cease to be effective
if the existence thereof precludes either party from obtaining any such policy.
If either party incurs any additional premiums due to the existence of such
waiver, it shall, upon it's request, be reimbursed therefor by the other party.
In the event that the suite or Building cannot be repaired within 180 days or if
Landlord cannot provide a suitable alternative location within the Center that
is acceptable to Tenant within ninety (90) days of the damage to the Suite, then
Tenant shall have the option to terminate the Lease without penalty.
(B) If more than 25 percent of the Suite shall be taken by any public
or quasi-public authority under its power of condemnation, this Lease shall
terminate as of the date possession shall be taken by the acquiring authority,
and the rental payable hereunder shall be apportioned accordingly. If any part
of the Suite or the Building shall be taken, then Landlord (whether or not the
suite be affected) shall have the right to terminate this Lease, effective as of
the date possession shall be taken by the acquiring authority, by giving written
notice to Tenant at any time within ninety (90) days after such taking, and the
rental payable hereunder shall be apportioned accordingly. Upon any such taking
and the continuing in force of the Lease as to a part of the Suite, the rental
payable thereafter shall be reduced in proportion to the amount of total floor
area of the Suite taken until the Suite is rebuilt or restored. In the event of
any such taking, Landlord, at its expense and promptly after the receipt of the
condemnation award or compensation from the acquiring authority, shall, unless
this Lease has been terminated, diligently rebuild or restore the remainder of
the Suite or Building to a complete architectural unit. Landlord's obligations
shall be limited to the rebuilding or restoration of such basic building
structure and facilities as Landlord furnished upon the commencement of the term
hereof. In any event, all damages awarded by the acquiring authority for any
such taking, whether for the whole or a part of the Suite or Building, shall
belong to and be the property of Landlord whether such damages shall be awarded
as compensation for loss of, or diminution in value to, the leasehold or the fee
of the Suite or Building. In the event that this Lease is terminated as herein
provided, Tenant shall not have any claim against Landlord for the value of the
unexpired term hereof.
SECTION 16:
Default by Tenant. (a) In the event of (a) a default in any of the
covenants or agreements herein contained to be kept by Tenant and such default
shall continue for five (5) days, in case of a default in the payment of rental
or other monetary sum, or for twenty (20) days, in case of any other defaults,
after written notice of such default is given to Tenant by Landlord or
Landlord's agents, or (b) the filing of any petition in bankruptcy or insolvency
or arrangement by or against Tenant or Tenant's adjudication as a bankrupt or
insolvent, or, (c) the appointment of a receiver for Tenant, or (d) the making
by Tenant of any general assignment for the benefit of creditors, or (e) the
Suite being vacated, then in any of the foregoing events Landlord may, if it so
elects, without notice terminate this Lease and declare the term ended, re-enter
the Suite, and with or without process of law expel and remove the Tenant
therefrom and again repossess and enjoy the Suite, all without prejudice to any
remedies which might otherwise be available to Landlord. Such expulsion or
removal shall not affect the liability of Tenant for rental or other charges or
obligations past due or thereafter accruing under this Lease. All Landlord's
remedies shall be cumulative and not exclusive of other available remedies.
Tenant hereby covenants and agrees that in the event of Tenant's failure to pay
rental and other charges when due, and further failure to cure such payment
default or defaults within the grace periods hereinabove provided, that Landlord
shall be entitled to charge, and Tenant shall become fully obligated to pay,
from and after the due date thereof, interest on all such unpaid sums at the
rate of eighteen percent (18%) per annum. Tenant acknowledges and agrees that
Landlord shall be entitled to charge and collect interest on past due rentals
and other charges notwithstanding the fact that Tenant may amortize all or some
portion of leasehold improvements in the Suite as part of the Base Rent paid by
Tenant hereunder.
(B) Additional Right in the Event of Default by Tenant. Since
Landlord is making or has made leasehold improvements to the Suite for use by
Tenant, with the reasonable expectation that such expenditures will not be
required again during the term of this Lease, and since vacating the Suite or
termination of this Lease or Tenant's right to occupy the Suite under this Lease
prior to the original expiration date of the Lease term will frustrate such
expectation in a manner as to make it almost impossible to measure the damages
to Landlord, and any reletting will cause additional costs to be incurred by
Landlord, therefore, Tenant agrees that in the event it vacates the Suite or
this Lease or Tenant's right to occupy the Suite under this Lease is terminated
due to a default by Tenant prior to the original expiration date of the term of
this Lease, then, in addition to and not in reduction of the rental or other
charges and obligations past due or thereafter accruing under this Lease, Tenant
shall pay to Landlord, Landlord's then unamortized costs of renovating the Suite
for Tenant's use. For this purpose, the assumed costs that are associated with
the improvements made to the Suite are $300,000 plus the actual costs of
improvements made to the Suite during the Lease Term. Amortization is to be
computed on a straight-line basis, without salvage value, over a 120 month
period. In addition to reimbursing Landlord for the unamortized costs of
improving the Suite, Tenant shall also pay an amount equal to three (3) months
rent for the Suite under this Lease at the then current rate.
SECTION 17:
Non-Liablilty of Landlord. Landlord shall not be responsible or
liable to Tenant for any loss or damage to Tenant or its property that may be
occasioned by or through the acts or omissions of any other occupant of premises
in the Building or any person transacting business or otherwise being present in
the Building or for any loss or damage resulting to Tenant or Tenant's property
from burst, stopped or leaking water, gas or sewer pipes or fixtures, or from
any failure or defect in any electric line, circuit or facility.
SECTION 18:
Indemnity; Insurance and Mutual Waivers of Subrogation. (A) Indemnity.
Tenant agrees to protect and hold Landlord, Landlord's employees, agents,
contractors, successors, assigns or invitees harmless and indemnified from and
against any and all claims, demands, actions and expenses, arising out of or on
account of any damage or injuries, including wrongful death, sustained or
claimed to have been sustained to any person or property in or upon the Suite by
any person whatsoever and noncompliance with any law or regulation including,
but not limited to, the Medical Waste Tracking Act of 1988 and its implementing
regulations, except for injuries directly caused by Landlord. Tenant agrees to
defend any action or proceeding brought against Landlord by reason of any of the
aforementioned causes. Notwithstanding any provision of this Lease or the Rules
and Regulations governing the Building, Landlord shall only be responsible for
damages or injuries to Tenant, Tenant's employees, agents, contractors,
successors, assigns or invitees caused substantially by the active negligence of
Landlord, Landlord's employees or agents and provided further that in no event
shall Landlord be responsible:
(i) in those cases where such damages are covered by Tenant's contents
insurance, which contents insurance shall include endorsements for vandalism,
malicious mischief, theft and mysterious disappearance (or would be covered by
contents insurance if Tenant had carried the same); or
(ii) for cash, securities, paintings, sculptures, and other objects of art,
photographs, records, files, work in process and work product, and other unique
or one-of-a-kind items which have high individual values, for all of which it
shall be the Tenant's responsibility to provide adequate security and
safekeeping.
(B) Insurance. Tenant shall, at its expense, obtain and carry at all
times during the term of this Lease, (i) public liability insurance covering the
Suite with limits of $1,000,000 for one person and $2,000,000 for any number of
persons injured or killed in one occurrence, and $500,000 property damage (or
such higher amounts as Landlord shall from time to time determine), and (ii)
fire insurance, with extended coverage, vandalism, malicious mischief, and theft
and mysterious disappearance endorsements and without co-insurance, covering the
contents of the Suite and all alterations, additions and leasehold improvements
made by or for Tenant, in the amount of their full replacement value, and (iii)
water damage and sprinkler insurance. All of such policies shall cover both
Landlord and Tenant, as their respective interests may appear, and all insurers
thereon shall agree not to cancel or change the same without at least ten (10)
days' prior written notice to Landlord. A certificate of Tenant's insurance
evidencing such insurance shall be furnished to Landlord upon occupancy and from
time to time.
(C) Mutual Waivers of Subrogation. whenever (i) any loss, cost,
damage or expense resulting from any peril described in this Section (18) is
incurred by any party to this Lease in connection with the Suite or any part of
the contents thereof, and (ii) such party is then covered under this Lease in
whole or in part by insurance with respect to such loss, cost, damage or
expense, then the party so insured hereby releases the other party from any
liability it may have on account of such loss, cost, damage or expense to the
extent of any amount recovered by reason of such insurance and waives any right
of subrogation which might otherwise exist in or accrue to any person on account
thereof, provided that such release of liability and waiver of the right of
subrogation shall not be operative in any case where the effect thereof is to
invalidate such insurance coverage or increase the cost thereof; provided,
however, in the case of an increase in the cost of the insurance coverage, the
insured shall give to the other party notice of such increase and of the amount
thereof and the other party may reinstate such waiver by paying to the insured
the amount of the increase in the cost of such insurance. The failure to give
notice of the increase in the cost shall mean the waiver is in effect
notwithstanding such increase. If Tenant fails to maintain in force any
insurance required by this Lease to be carried by it, then for the purposes of
this waiver of subrogation it shall be deemed to have been fully insured and to
have recovered the entire amount if its loss.
SECTION 19:
Surrender of Suite. Tenant agrees that it shall, upon the termination
of this Lease, by expiration or otherwise, surrender to Landlord the Suite,
including all alterations, improvements, decorations and repairs made thereto,
in as good condition and repair as when delivered by Landlord, ordinary wear and
tear and damage by fire or other insured casualty only excepted. All trade
fixtures, equipment (including special equipment of all types), and other
personal property owned by Tenant and not attached to the walls and/or floor of
the Suite as well as any improvements, fixtures, additions or alterations made
by Tenant may (and upon Landlord's request shall) be removed from the Suite by
Tenant, provided that all the terms and conditions of this Lease have been
complied with, and provided further that Tenant shall fully repair any and all
damage caused by such removal.
SECTION 20:
Landlord's Right of Access. Landlord and Landlord's agents,
contractors or employees may enter the Suite at any reasonable time to inspect
the condition thereof, to make any repairs or alterations which Landlord may, in
its discretion, deem necessary or proper for the safety, preservation or
improvement of the Building or the Suite, and to exhibit the Suite to
prospective tenants. Nothing herein contained shall be deemed to impose on
Landlord any obligation or duty to make repairs or alterations to the Suite
except as expressly provided in Section (10) above.
SECTION 21;
Covenants of Title and Quiet Enjoyment. It is understood and agreed
that Landlord is the owner of the fee interest of the Site. Landlord warrants
that Landlord has good right and title to enter into this Lease. Landlord
reserves the right at any time to enter into one or more concurrent of
successive mortgages covering its interest in the land and improvements thereon
including the Building (the term "mortgage", as used herein, includes all
extensions, renewals, amendments and supplements to any such mortgage). This
Lease shall be subject and subordinate to any such mortgage. Tenant hereby
agrees to promptly execute and deliver any further instrument which may be
deemed requisite by Landlord or any mortgagee to confirm the foregoing
subordination of this Lease to any such mortgage.
Notwithstanding anything hereinabove contained in this Section (22),
in the event the holder of any mortgage shall at any time elect to have this
Lease constitute a prior and superior lien to the mortgage, then and in such
event, upon such holder notifying Tenant to that effect in writing, this Lease
shall be deemed a prior and superior lien to the mortgage, whether this Lease is
dated prior to or subsequent to the date of the mortgage. Landlord covenants
that so long as Tenant shall duly and punctually perform and observe all of
Tenant's obligations under this Lease, Tenant shall peaceably and quietly have,
hold and enjoy the Premises free from let or hindrance by Landlord or any party
claiming by, through or under Landlord; provided, however, that Landlord's
foregoing covenant shall, nevertheless, be subject and subordinate to any zoning
or municipal laws or ordinances, regulations and building restrictions,
easements for public utilities and any mortgage or mortgages which may now or
hereafter affect the land of which the Premises are a part.
SECTION 22:
Notices. Notices and demands required or permitted to be given
hereunder shall be given by registered or certified mail, in the case of the
Landlord, addressed to it at 246 Park Plaza, Oshkosh, Wisconsin 54901; and in
the case of Tenant, addressed to it at the Suite. Notices and demands shall be
given by Landlord or Landlord's agents and by Tenant or Tenant's agents and
shall be deemed to have been given when so mailed. Either party may change the
address to which notices and demands to it are to be given by notifying the
other party hereto in writing of a new address to be used for such purpose.
SECTION 23:
Holding Over. If Tenant, with the consent of Landlord, remains in
possession of the Suite after the termination of this Lease and without the
execution of a new lease, Tenant shall be deemed to be occupying the Suite as a
tenant from month-to-month, subject to all applicable terms, conditions and
covenants of this Lease. If Tenant, without Landlord's prior written consent
and without the execution of a new lease, remains in possession of the Suite
after expiration of the term, Tenant shall pay (i) twice the monthly Rent and
all sums due under the Lease (without any reduction for a hold over of a partial
month), and (ii) any and all losses or liabilities arising out of Tenant's
failure to surrender the Suite on the expiration of the term.
SECTION 24:
Benefit. The covenants, conditions and agreements contained in this
Lease shall be binding upon and inure to the benefit of the parties hereto and
their respective heirs, administrators, executors, successors and assigns, but
in the case of Tenant's successors and assigns, only to the extent that
assignment is permitted hereunder.
SECTION 25:
Force Majeure. In the event that Landlord shall be delayed or
hindered in or prevented from the performance of any act required hereunder by
reason of strike, lockouts, labor troubles, inability to procure materials,
failure of power, restrictive governmental law, regulations, orders, or decrees,
riots, insurrection, war, acts of God, inclement weather, or other reason of
like or unlike nature or cause beyond Landlord's control, then performance of
such act shall be excused for the period of the delay and the period for the
performance of any such act shall be extended for a period equivalent to the
period of such delay.
SECTION 26:
Severability. Should one or more of the provisions hereof or any
given application of any particular provision hereof be found invalid or
unenforceable by a court of appropriate jurisdiction, the parties hereto
recognize and agree that the remainder of this Lease shall remain in full force
and effect and enforceable in accordance with its terms.
SECTION 27:
Paragraph Headings. The paragraph headings of this Lease are inserted
for reference and as a matter of convenience only and shall not be considered in
any way to define, limit or describe the size or intent of this Lease nor affect
it's terms and provisions.
SECTION 28:
Governing Law. This Lease shall be construed according to, and
governed by, the internal laws of the State of Wisconsin.
SECTION 29:
Entire Agreement. Tenant confirms that Landlord and its agents have
made no representations or promises with respect to the Suite or the making or
entry into of this Lease except as in this Lease expressly set forth, and agrees
that no claim or liability shall be asserted by Tenant against Landlord for, and
Landlord shall not be liable by reason of, breach of any representations or
promises not expressly stated in the Lease. This Lease can be modified or
altered only by agreement in writing between landlord and Tenant, and no act or
omission of any employee or agent of Landlord shall alter, change or modify any
of the provisions hereof.
SECTION 30:
Nonwaiver. No waiver of any provision of this Lease shall be implied
by any failure of Landlord or Tenant to enforce any remedy on account of the
violation of such provision, even if such violation be continued or repeated
subsequently, and no express waiver shall affect any provision other than the
one specified in such waiver and that one only for the time and in the manner
specifically stated. No receipt of monies by Landlord from Tenant after the
termination of this Lease shall in any way alter the length of the Term of
Tenant's right of possession hereunder or after the giving of any notice shall
reinstate, continue or extend the Term hereof or create a new tenancy or affect
any notice given Tenant prior to the receipt of such monies, it being agreed
that after the service of notice or the commencement of a suit for possession of
the Suite or after final judgement for possession of the Suite, Landlord may
receive and collect any Base Rent or Additional Rent due, and the payment of
said Base Rent or Additional Rent shall not waive, affect or nullify said
notice, suit or judgement.
SECTION 31:
Estoppel Certificate. Tenant agrees that from time to time upon not
less than fifteen (15) days prior request of Landlord or Landlord's mortgagee,
Tenant or Tenant's duly authorized representative having knowledge of the facts
will execute and deliver to Landlord an estoppel certificate in the form
reasonably so requested, together with a written statement certifying as to such
other matters regarding this Lease as Landlord or Landlord's mortgagee may
reasonably request (or duly noting exceptions to the matters covered in the
estoppel certificate, if appropriate), it being intended that any such
statements and certificates may be relied upon by any mortgagees or prospective
mortgagees of the Land or Building or the Site, or any prospective or subsequent
purchaser or transferee of all or a part of Landlord's interest in the Land or
the Building or the Suite or this Lease or any prospective transferee of all or
any part of the interests in Landlord or in any partner in Landlord.
SECTION 32:
Limitation on Landlord's Liability. It is expressly understood and
agreed by Tenant that none of Landlord's covenants, undertakings or agreements
are made or intended as personal covenants, undertakings or agreements by
Landlord and any liability of Landlord for damages or breach or nonperformance
by Landlord or otherwise arising under or in connection with this Lease or the
relationship of Landlord and Tenant hereunder, shall be collectible only out of
Landlord's interest in the Land, Building, and Center, in each case as the same
may then be encumbered, and no personal liability is assumed by, nor at any time
may be asserted against, Landlord or any of its officers, agents, employees,
legal representatives, successors or assigns, all such liability, if any, being
expressly waived and released by Tenant. The provisions of this Section (34)
are not intended to relieve Landlord from the performance of any of Landlord's
obligations under this Lease, but only to limit the personal liability of
Landlord in case of recovery of a judgement against Landlord; nor shall the
foregoing be deemed to limit Tenant's right to obtain injunctive relief or
specific performance.
In no event shall Landlord's liability for any breach of this Lease
exceed the amount of Base Rent then remaining unpaid for the then current Term
(exclusive of any extension periods which have not then actually commenced),
except for any liabilities that are covered by Landlord's liability insurance.
This provision is not intended to be a measure or agreed amount of Landlord's
liability with respect to any particular breach and shall not be utilized by any
court or otherwise for the purpose of determining any liability of Landlord
hereunder, except only as a maximum amount not to be exceeded in any event.
Landlord shall not be considered to be in default hereunder, unless
Landlord (i) shall fail to perform a covenant, term or condition of this Lease
to be performed by Landlord, (ii) shall receive written notice of the same from
Tenant specifying a such nonperformance, and (iii) shall fail to cure the same
within thirty (30) days after written notice of the same or such longer time as
is necessary to cure the same.
SECTION 33:
Miscellaneous.
(A) No rights to any view or to light or air, over any property,
whether belonging to Landlord or any other person, are granted to Tenant by this
Lease.
(B) All of the covenants of Tenant hereunder shall be deemed and
construed to be "conditions", if Landlord so elects, as well as "covenants", as
though the words specifically expressing or imparting covenants and conditions
were used in each separate instance.
SECTION 34:
Addenda. Exhibits A & B are attached to this Lease and hereby made a part
hereof as though set forth in full at this point.
SECTION 35:
Confidentiality. Tenant agrees to treat all the terms and conditions
of this Lease as confidential.
SECTION 36:
Payment for Leasehold Improvements and Other Build Out Costs. In the
event that Tenant does not elect to exercise the option to extend the term of
this Lease as set forth in Section 1 then Tenant shall pay to Landlord, as
reimbursement for the improvements made to the Suite, the sum of $150,000 plus
the actual cost of any additional improvements to the Suite that were made
during the initial term of the Lease. Such payment shall be a lump sum payable
with the rent for the last month of the initial term of the Lease.
SECTION 37:
Americans with Disabilities. Landlord hereby warrants and represents
that the Suite and those areas contiguous to the Suite comply fully with all
federal, state, and local laws, including without limitation, the Americans with
Disabilities Act ("ADA").
Landlord at its sole cost and expense shall remove all barriers to
access and provide auxiliary aids as required with respect to the Suite and
those areas contiguous to the Suite, as now or hereafter required by the ADA.
SECTION 38:
Hazardous Wastes. (A) Landlord represents and warrants that, to the
best of Landlord's knowledge, neither the Building nor the Center is
contaminated with any "Hazardous Materials" (as that terms are hereinafter
defined) and, to the best of Landlord's knowledge, there has never occurred the
release of any Hazardous materials within, in, on, or affecting the Center or
the Building. Use of the Suite will not subject the Tenant to any liability for
clean-up, removal, or relocation of any Hazardous Materials to the extent that
such clean-up, removal, or relocation is not attributable to the act or omission
of Tenant.
(B) As used herein, the term "Hazardous Materials" means any
hazardous or toxic substance, material, or waste which is or becomes regulated
by any local governmental authority, the State of Wisconsin, or the United
States Government. The term "Hazardous Material" includes, without limitation,
any material or substance that is (i) defined or designated as a "hazardous
substance" under the laws of the State of Wisconsin, (ii) petroleum, (iii)
asbestos, (iv) designated as a "hazardous substance" pursuant to Section 311 of
the Federal Water Pollution Control Act (33 U.S.C. Subsection 1321), (v) defined
as a "hazardous waste" pursuant to Section 1004 of the Federal Resource
Conservation and Recovery Act, 42 U.S.C. Subsection 6901 et. seq. (42 U.S.C.
Subsection 6903), (vi) defined as a "hazardous substance" pursuant to Section
101 of the Comprehensive Environmental Response Compensation and Liability Act,
42 U.S.C. Subsection 9601 et. sect. (42 U.S.C. Subsection 9601), or (vii)
defined as a "regulated substance" pursuant to Subchapter IX, Solid Waste
Disposal Act (Regulation of Underground Storage Tanks), 42 U.S.C. Subsection
6991 et. seq.
(C) Landlord represents and warrants that, to the best of Landlord's
knowledge, as of the date hereof and when constructed by Landlord, the Building
and the Center complies and shall comply with all federal, state, and local
governmental, municipal laws, ordinances, and public requirements with respect
to the matters referred to in paragraphs (a) and (b) above. Landlord covenants
to comply with all federal, state, and local governmental, municipal laws,
ordinances and public requirements with respect to matters referred to in
paragraphs (a) and (b) above; provided, however, that to the extent that an act
or omission of Tenant and/or Tenant's agents, contractors or employees causes or
is responsible for violation of any federal, state, and local governmental,
municipal laws, ordinances, and/or public requirements with respect to the
matters referred to in paragraphs (a) and (b) above, then Tenant shall bear such
costs and expenses.
(D) Landlord covenants that neither the Suite nor any walls,
ceilings, beams or ducts enclosing or connected to or serving the Suite shall
contain or be exposed to asbestos as a result of acts of Landlord and those whom
it engages.
(E) Notwithstanding anything to the contrary in this Lease, Landlord
hereby indemnities and holds Tenant harmless from all costs and expenses paid or
incurred by Tenant as a result of or in connection with the breach of any
representation, covenant, or agreement of Landlord pursuant to this Section.
However, Landlord will not reimburse Tenant for any expenses incurred by Tenant
unless prior to incurring any such expenses Tenant has notified Landlord of the
reason for and the amount of the expenditure and Landlord has agreed to
reimburse Tenant.
IN WITNESS WHEREOF, Landlord and Tenant have duly executed this Lease,
in triplicate, under seal, on the day, month and year first above written.
PARK PLAZA OF OSHKOSH, INC.
By:
President
Witness:
MORGAN PRODUCTS LTD. ("Tenant")
By: Albert J. Ebert
Printed name: Albert J. Ebert
Attest: James A. Logerquist 10/13/95
Printed Name: James A. Logerquist
EXHIBIT A
[Lease Plan Park Plaza Mall
P.O. Box 234
Oshkosh WI 54902-0234
Layout and map of mall]
EXHIBIT B
Commencing at the Intersection of the Southwesterly line of Pearl Avenue and the
Westerly line of Commerce Street; thence South 0 deg. 26' 46" West along the
Westerly line of Commerce Street 385.40 feet to the centerline of a vacated
portion of Marion Road; thence North 65 deg. 33' 25" West along the centerline
of vacated Marion Road 10.95 feet to a point; thence South 0 deg. 26' 46" West
123.44 feet; thence South 6 deg. 56' 46" West 129.27 feet: thence North 68 deg.
42' 00" West along the U.S. Harbor Line 1096.45 feet to the East line of Jackson
Street; thence North 0 deg. 22' 34" West along the East line of Jackson street
325.58 feet; thence North 37 deg. 32' 06" East 356.58 feet to a point; thence
Easterly 189.77 feet along a line which is 50 feet to a point; thence Easterly
189.77 feet along a line which is 50 feet Southerly from and at right angles to
the centerline of the Soo Line Railroad track; thence North 37 deg. 32' 06" East
22.55 feet; thence Easterly 70.03 feet along a line which is 35 feet Southerly
from and at right angles to the centerline of the Soo Line Railroad track;
thence South 53 deg. 30' 44" East along the Southwesterly line of Pearl Avenue
702.65 feet, to the point of commencement.
EXHIBIT C
BUILDING RULES AND REGULATIONSTENANT agrees as follows:
(1) All loading and unloading of goods shall be done only at such times, in the
areas and through the entrances, designed for such purposes by Landlord.
(2) The delivery or shipping of merchandise, supplies and fixtures to and from
the Leased Premises shall be subject to such rules and regulations as in the
judgment of Landlord are necessary for the proper operation of the Leased
Premises or the Center.
(3) All garbage and refuse shall be kept in the kind of container specified by
Landlord. Tenant will be required to place any containers in the area
designated by Landlord for pick up. If Landlord shall provide or designate a
service for picking up refuse and garbage, Tenant shall use same at Tenant's
cost. Tenant shall pay the cost of removal of any of Tenant's refuse or rubbish
based on Tenant's Proportionate Share (as defined in Subsection 4(B)(1)(b)).
(4) Except for normal office radios, no radio or television or other similar
device shall be installed without first obtaining in each instance Landlord's
consent in writing. No aerial shall be erected on the roof or exterior walls of
the premises, or on the grounds, without in each instance, the written consent
of Landlord. Any aerial so installed without such written consent shall be
subject to removal without notice at any time.
(5) Except for normal daily outside accumulations the outside areas immediately
adjoining the premises shall be kept clean and free from dirt and rubbish by
Tenant to the satisfaction of Landlord and Tenant shall not place or permit any
obstructions in such areas.
(6) Tenant and Tenant's employees shall park their cars only on the second or
third levels of the Center's parking ramp and in the area designated for that
purpose by Landlord.
(7) The plumbing facilities shall not be used for any other purpose than that
for which they are constructed and no foreign substance of any kind shall be
thrown therein, and the expense of any breakage, stoppage or damage resulting
from a violation of this provision shall be borne by Tenant who shall, or who
employees, agent or invitees shall have caused it.
(8) Tenant shall not burn any trash or garbage of any kind in or about the
Leased Premises or the Center.
(9) Tenant will not utilize any floor areas outside of Tenant's space without
Landlord's prior written approval.
(10) Tenant shall observe all security regulations established from time to
time by the Landlord and will cooperate by using any security system in place
during the term of this lease.
(11) Tenant will cooperate and follow any regulations established by
Municipal, County, State or Federal authorities.
(12) Any individuals or companies doing business with or for the Tenant
during hours outside normal business hours, shall be registered with the Center
security before commencing work.
Exhibit 10.31
[Letterhead & Logo]
ANDERSEN WINDOWS, INC.
December 1994
Morgan Distribution
12100 Heath Street
Birch Run, MI 48415
TO: Andersen Distributor
RE: Andersen Windows, Inc. Distributor Agreement
Your Andersen Regional Sales Manager will be delivering to you with this letter
two copies of the new Andersen Windows, Inc. Distributor Agreement for your
distributor location. We ask that you review and complete this Agreement, sign
both copies, and return them to Tim Gunderson, Manager, Channel Planning &
Analysis. The Agreement will become effective when we sign it in Bayport after
review. We will then send you a copy signed by us.
The new Distributor Agreement replaces the Terms and Conditions agreement that
Andersen has entered into with many distributors. Andersen believes that the
Distributor Agreement contains many improvements as compared with the Terms and
Conditions agreement. We anticipate that all distributor locations will enter
into the new Distributor Agreement with Andersen.
As you review the Distributor Agreement, please be aware of the following:
1. The name used for your business in the opening paragraph of the
Agreement and on the signature page should be the legal name under
which your business is incorporated and operated at the location
referred to in the Distributor Agreement. Please enter the state of
your incorporation in the blank in that opening paragraph. If your
business is not a corporation, please contact your Andersen Regional
Sales Manager.
2. Section 6 of the Agreement addresses competitive products. Over the
longer term, Andersen's aggressive sales goals will provide you with
significant growth opportunities. One of our longer-term goals is
distributors dedicated to Andersen products without reservation.
While Andersen considers any other window or patio door to be
competitive, the second sentence of Section 6 only addresses major
competitor's products. Major competitor's products include: products
that fill a substantial number of openings that would be otherwise
filled by Andersen products or that divert substantial energy and
resources from your promotion of Andersen products. We also ask that
you inform us if you are considering the addition of any other
manufacturer's windows and patio doors.
3. Section 15 of the Agreement requests a copy of your current Articles
of Incorporation, as amended, and a copy of a resolution of your Board
of Directors authorizing you to enter into the new Distributor
Agreement. If it is inconvenient for you to provide these documents
to us, please review this with your Andersen Regional Sales Manager.
4. Section 23 of the Agreement provides that the entire legally binding
agreement between you and us is the Distributor Agreement and written
Andersen policies provided generally to Andersen distributors. The
following are the only written Andersen policies in this category
which, along with the Distributor Agreement, constitute the entire
legally binding agreement between you and us at this time:
a. Andersen Windows, Inc. Sales Policy of September, 1994.
b. Andersen WindowCare [SM] Service Policy dated May, 1994.
c. Andersen Distributor Bulletin SM-793 dated November 19, 1993
including Appendices A (as currently in effect), B and C.
d. The Andersen Advertising and Sales Promotion Policy as revised
April, 1993.
Your Andersen Regional Sales Manager will be providing you a copy of the
September 1994 Sales Policy and Distributor Bulletin SM-793 with current
Appendix A when he delivers the Distributor Agreement to you. If you have any
questions concerning the Agreement, please raise them with your Andersen
Regional Sales Manager.
Very truly yours,
ANDERSEN WINDOWS, INC.
Tim Gunderson
Manager, Channel Planning & Analysis
ANDERSEN WINDOWS, INC.
DISTRIBUTOR AGREEMENT
Andersen Windows, Inc. ("We," "Us," "Our," "Andersen") welcomes Morgan
Distribution, a (an)_________________________ corporation, ("You," "Your") as a
distributor for us. We agree to sell products to you as an authorized Andersen
distributor at your warehouse located at:
12100 Heath Street
Birch Run, MI 48415
1. Andersen Policies. Your rights and obligations as an Andersen distributor
are contained in this Agreement, the Andersen Sales Policy and Distributor
Bulletin SM-793, and any other written Andersen policies provided generally
to you and other Andersen distributors.
2. Your Name. In your business as an Andersen distributor you will use the
name Morgan Distribution. You may not use a name containing "Andersen."
3. Inventory. You agree to maintain an inventory representative of Andersen
products at a level we both believe is adequate for vigorous growth and
maintenance of customer service.
4. Primary Market Area. You agree to vigorously promote the sale of Andersen
products throughout your Market Area (shown in Distributor Bulletin
SM-793).
5. Goals. We will agree with you on goals for your sales and participation in
the window and patio door business in your Primary Market Area. Together
we periodically will review your progress in reaching these goals.
6. Other Products. We believe it is not in the best interests of Andersen
distribution for you to devote significant effort or resources to promoting
or selling other brands of window or patio door products. While you are an
Andersen distributor, you will not promote or sell another major window or
patio door manufacturer's products at your above location. Also, you will
advise us before you make any decision to begin promoting or selling window
or patio door products of any other manufacturer at your above location.
7. Sales, Service and Promotion. You will vigorously promote, sell and
provide service to those existing and potential retailers of our products
throughout your Primary Market Area which do or will actively promote, sell
and support our products. You may refuse to sell to a retailer whose
financial condition creates an unsatisfactory risk to your business.
8. Andersen Components. Whenever an Andersen component is available for use
with Andersen products, you will actively promote its availability to your
customers.
9. Staffing. You agree to employ adequate (a) sales staff to vigorously
promote the sale of Andersen products to retailers, consumers and
contractors and (b) architectural/builder specialty representatives to
vigorously promote Andersen products to architects, engineers and other
building professionals.
10. Prices; Shipments. The prices, payment terms and discounts that apply to
your purchases of products from us will be those in our price schedule and
distributor discount sheet which are in effect on the date of each shipment
by us to you. We can change our prices, terms and discounts at our
discretion without giving you prior notice. The volume, schedule for and
destination of each of our shipments to or for you will be as we state from
time to time in writing to you as expressly applicable to your above
location and can be changed by us at our discretion. We can allocate
production and deliveries of our products at our discretion.
11. Order Acceptance; Credit. Orders from you will be accepted by us only by
shipment. We can reject orders at any time, without cause.
We can decide at any time at our discretion, regardless of any security you
may have given us, that your financial condition is not adequate for us to
make additional sales or shipments to you on the credit terms then
available to you. We can then cease accepting orders from you and withhold
or stop shipments for orders we already have accepted from you. We will
not resume shipments to you until you have satisfactorily improved your
financial condition and provided us such mortgages, security interests,
guarantees or other security for payment that we in our discretion request
to assure your payment of amounts you then and will in the future owe us.
Before we accept any orders from you as an Andersen distributor, you will
furnish us the following instruments to secure your obligation to pay for
your purchases from us:
Without limiting our rights to reject orders or withhold shipments from
you, we can do so if you are past due on any unpaid invoice or are failing
to take any cash discount we make available for prompt payment. We can
refuse credit or remove, reduce or place conditions upon any credit limit
we establish for you at any time at our discretion without giving you prior
notice.
12. Nonagent. You are not an agent or other legal representative of us for any
purpose. You are not granted any authority to assume or create any
obligation on our behalf. This Agreement does not create a legal
partnership, joint venture, franchise or similar arrangement between you
and us, and you waive the application of any laws concerning such
arrangements.
13. Termination. You and we have the following termination rights:
A. Either you or we can terminate this Agreement and you as an Andersen
distributor at the above location at any time without cause by giving
the other party at least 60 calendar days' prior notice.
B. Either you or we can immediately terminate this Agreement and you as
an Andersen distributor at the above location for cause by giving the
other party notice.
C. We can immediately terminate this Agreement and you as an Andersen
distributor at the above location by giving you notice if there is a
change in the ownership or in the direct or indirect control of you or
your business.
D. This Agreement and your position as an Andersen distributor will
terminate automatically if you file or have filed against you a
petition for your bankruptcy, become insolvent, make an assignment for
the benefit of creditors, or go into liquidation or receivership.
Termination of this Agreement and you as an Andersen distributor will not
release your obligation to pay all amounts you owe us. Neither you nor we
will be liable to the other party for any loss, recoupment or damage,
whether actual, indirect, incidental, consequential, special, punitive or
otherwise, on any contract, warranty, tort, negligence, strict liability,
antitrust, RICO or any other legal basis, for or related to any termination
of this Agreement and you as an Andersen distributor as permitted by this
Agreement.
14. Confidential Information. You will use any of our confidential or
proprietary information which you receive only for the purpose of your
performing as our distributor, and you will keep the information
confidential except as necessary for that purpose. Upon any termination of
you as our distributor you will cease using our confidential or proprietary
information and will promptly return to us any such information in your
possession or control.
Our confidential or proprietary information is any nonpublic information
concerning us including information relating to our research, product
development, manufacturing, sales, marketing, administration and finances.
This information is confidential or proprietary information regardless of
its form, e.g. oral, written, electronic, or other, and whether or not it
is labeled as "confidential." Our confidential or proprietary information
includes our information and that of our affiliates and third parties
concerning or relating to us.
15. Authority. You will deliver to us the following documents along with a
copy of this Agreement signed by you:
A. A copy of your Articles of Incorporation certified by your Secretary
of State; and
B. A copy of the resolution of your Board of Directors, certified by your
Secretary, authorizing you to sign and perform this Agreement.
16. Financial Statements. While you are our distributor and we are making
credit terms available to you or you have an unpaid balance owing us, you
will furnish to us as soon as available your year-end financial statements,
which will fairly represent your financial position, your results of
operations and your cash flows in conformity with generally accepted
accounting principles. As part of our credit review process, we may
request other financial statements from time to time, which you agree to
provide. Failure to prepare and provide any financial statements will
affect any credit determination made by us under Section 11 of this
Agreement.
17. Governing Law. This Agreement, and any controversy or claim or cause of
action concerning your being our distributor, are governed by the laws of
the State of Minnesota (without regard to the laws of conflict of any
jurisdiction) as to all matters, including validity, interpretation,
liability, litigation and remedies.
18. Severability. Each provision of this Agreement will be interpreted so as
to be valid under applicable law. If any provision of this Agreement is
found invalid, the provision will be ineffective without invalidating the
remainder of that provision or any other provisions of this Agreement.
19. Mediation. If a controversy or claim arises between you and us concerning
this Agreement or your being our distributor, you and we will meet together
in an effort to resolve the controversy or claim. If you and we are unable
to do so, the dispute will be submitted to nonbinding mediation
administered by the American Arbitration Association under its Commercial
Mediation Rules.
Either you or we may initiate the mediation by filing a request for
mediation with the Association. No legal action may be commenced in court
by either you or us relating to the controversy or claim until 45 calendar
days after the filing with the Association of the request for mediation.
The running of any applicable statute of limitations is not affected by
this Section.
This Section 19 does not apply to any claim or action by us asserting
nonpayment by you for Andersen products or services and will be of no
effect if the Association ceases to exist or to administer mediation. This
Section also does not apply to any claim or action by us against you
concerning our rights in our confidential or proprietary information, in
our patents, copyrights or trademarks, or in those of our affiliates.
20. Litigation. You consent to the personal jurisdiction of the state and
federal courts in Minnesota in connection with any controversy, claim or
cause of action between you and us, on any contract, warranty, tort,
negligence, strict liability, antitrust, RICO or any other legal basis,
concerning this Agreement or your being a distributor for us. You waive
any argument that venue in such courts is not convenient.
Any action or proceeding by us in connection with such controversy, claim
or cause of action may be brought and enforced against you in such
Minnesota courts. Further, any action or proceeding brought by you against
us in connection with such controversy, claim or cause of action will be
brought and enforced by you only in a state or federal court in Minnesota.
This Section 20 does not prevent us from bringing any action or proceeding
against you or your property in the courts of any other jurisdictions
asserting or relating to nonpayment by you for Andersen products or
services. This Section also does not apply to any claim or action by us
against you concerning our rights in our confidential or proprietary
information, in our patents, copyrights or trademarks, or in those of our
affiliates.
21. Expenses. The expenses of the American Arbitration Association and
mediator referred to in Section 19 will be shared equally by you and us.
If we assert a claim for relief, including a counterclaim, in litigation in
court against you in connection with any controversy, claim or cause of
action concerning this Agreement or your being our distributor and we do
not prevail on that claim for relief, we will reimburse you for all
reasonable costs, expenses and fees, including attorneys' fees, you
incurred in the litigation in defending against our claim for relief.
If you assert a claim for relief, including a counterclaim, in litigation
in court against us in connection with any controversy, claim or cause of
action concerning this Agreement or your being our distributor and you do
not prevail on that claim for relief, you will reimburse us for all
reasonable costs, expenses and fees, including attorneys' fees, we incurred
in the litigation in defending against your claim for relief.
A party prevailing as to any claim for relief, including a counterclaim,
asserted by that party shall bear its own fees, costs and expenses except
as otherwise provided by law.
22. DAMAGES LIMITATION. DAMAGES SOUGHT BY EITHER PARTY AGAINST THE OTHER PARTY
IN CONNECTION WITH ANY CONTROVERSY, CLAIM OR CAUSE OF ACTION CONCERNING
THIS AGREEMENT OR YOUR BEING OUR DISTRIBUTOR, WHETHER BASED ON CONTRACT,
WARRANTY, TORT, NEGLIGENCE, STRICT LIABILITY, ANTITRUST, RICO OR OTHERWISE,
SHALL BE LIMITED TO DIRECT DAMAGES. FURTHER, IN NO EVENT WILL EITHER PARTY
BE LIABLE TO THE OTHER PARTY, AND NEITHER PARTY WILL SEEK TO RECOVER OR
ENFORCE A JUDGMENT AGAINST THE OTHER PARTY, FOR:
A. INDIRECT, INCIDENTAL, CONSEQUENTIAL OR SPECIAL DAMAGES, INCLUDING,
WITHOUT LIMITATION, DAMAGES RELATING TO LOSS OF INVESTMENT,
INDEBTEDNESS, LOSS OF FINANCING, LOSS OF SALES OR PROFITS, OR BUSINESS
INTERRUPTION, DISCONTINUANCE OR TERMINATION, OR
B. PUNITIVE, TREBLE OR OTHER DAMAGES IN EXCESS OF DIRECT DAMAGES,
WHETHER THE UNDERLYING CONTROVERSY, CLAIM OR CAUSE OF ACTION IS BASED ON
CONTRACT, WARRANTY, TORT, NEGLIGENCE, STRICT LIABILITY, ANTITRUST, RICO OR
OTHERWISE, AND EACH PARTY WAIVES ANY CLAIM AGAINST THE OTHER PARTY FOR
INDIRECT, INCIDENTAL, CONSEQUENTIAL AND SPECIAL DAMAGES AND FOR PUNITIVE,
TREBLE OR OTHER DAMAGES IN EXCESS OF DIRECT DAMAGES.
THIS SECTION 22 DOES NOT APPLY TO ANY CLAIM OR ACTION BY US AGAINST YOU
CONCERNING OUR RIGHTS IN OUR CONFIDENTIAL OR PROPRIETARY INFORMATION, IN
OUR PATENTS, COPYRIGHTS OR TRADEMARKS, OR IN THOSE OF OUR AFFILIATES.
23. Entire Agreement; Amendment. This Agreement, the Andersen Sales Policy and
Distributor Bulletin SM-793, and any other written Andersen policies
provided generally to you and other Andersen distributors, as they may be
changed or adopted from time to time, constitute the entire legally binding
agreement between you and us concerning your being a distributor for us and
the rights and obligations of you and us concerning your Andersen
distributorship. All prior and contemporaneous agreements and discussions
between you and us, whether oral or written, are superseded by this
Agreement and are null and void. If there is any conflict between this
Agreement and any of our current or subsequent written policies, this
Agreement will govern.
This Agreement can only be amended by a statement in writing signed by you
and us. We can change the Andersen Sales Policy, Distributor Bulletin
SM-793 and our other written policies and adopt new policies from time to
time in our discretion without your consent and without giving you prior
notice.
24. Assignment. You cannot assign or delegate any of your rights or
obligations under this Agreement voluntarily, involuntarily or by operation
of law without our prior written consent. We can assign or delegate any of
our rights or obligations only to our affiliates.
25. Notices. All notices and consents required to be given by this Agreement
will be given in writing by telecopier, by personal delivery, or by United
States registered or certified mail, postage prepaid, return receipt
requested, to the parties at these addresses:
WE: Andersen Windows, Inc.
551 North Maine Street
Bayport, Minnesota 55003
Attention: President
Telecopier: (612) 430-5107
YOU: ___________________________
___________________________
___________________________
Attention: ________________
Telecopier:________________
or to another address which a party designates by notice to the other party.
All notices will be effective upon delivery to the designated address.
26. Waiver. No failure or delay by either you or us to assert any right or
remedy under this Agreement will be a waiver of that right or remedy if the
circumstances giving rise to the right or remedy continue or are repeated.
No waiver shall be effective unless given in writing.
27. Survival. Sections 12 through 14 inclusive, 17 through 23 inclusive, and
26 of this Agreement shall survive any termination of this Agreement or
your ceasing to be our distributor and will remain in full force and effect
thereafter.
Please show your agreement with the above provisions by signing this Agreement
and returning it to us.
Agreed:
Morgan Distribution
______________________
(DISTRIBUTOR NAME)
BY ____________________________
(OFFICER'S SIGNATURE)
NAME __________________________
(Print or Type)
TITLE ________________________
Accepted at Bayport, Minnesota and
entered into on _____________, 19 ___.
ANDERSEN WINDOWS, INC.
BY _________________________________
President
SALES POLICY
[Logo Andersen
Windows - Patio Doors]
September 1994
Andersen Windows, Inc. Bayport, Minnesota
ANDERSEN SALES POLICY
I. GENERAL STATEMENT
Andersen Windows, Inc. (Andersen) distributes its products through wholesale
window distributors. Adequate distribution is the governing factor in
Andersen's determining the number of distributor warehouses needed to serve a
given area. It is the practice of Andersen to seek distributors in such a
number that will maintain a vigorous distribution business for all concerned.
Each Andersen distributor has been determined by Andersen to have the unique
qualifications necessary to adequately promote and sell its products. When the
ownership of a distributor is to be changed, it is necessary for Andersen to
determine whether the new party can and will adequately represent Andersen.
Therefore, the Andersen Distributor Agreement provides that Andersen has the
right, without incurring any liability to any distributor, to terminate
Andersen's relationship with the distributor in the event that there is a change
in the ownership or in the direct or indirect control of the distributor or its
business.
If a distributor plans a change in ownership or in the direct or indirect
control of the distributor and the new owner or controlling parties wishes to
continue as an Andersen distributor, the existing distributor and the proposed
new owner or controlling parties should each notify Andersen in writing at least
60 days before the proposed change. This written notice should describe the
proposed change in ownership or control and should request that, following the
change, the distributor be permitted to continue as an Andersen distributor. If
the new ownership or control of the distributor is acceptable to Andersen,
Andersen will expect that the distributor, at the time of the change in
ownership or control, remains or becomes bound to a Distributor Agreement with
Andersen.
Andersen maintains a consistent price policy in selling to its distributor
customers, adhering to its published price lists and discounts. Andersen
Corporation's reputation of fairness to all customers in the distribution
channels has been established over many years of the company's existence and all
Andersen personnel are committed to it.
II. DIRECT FACTORY SHIPMENTS
Andersen will ship products to the distributor's warehouse or to the business
location of the distributor's customers, as provided in Distributor Bulletin
SM-793. Andersen will not divert shipments.
III. THE ANDERSEN SALES REPRESENTATIVE'S TERRITORY
A. The Andersen sales representative's territory will be established by
Andersen management. The Andersen sales representative will make
calls and service the Andersen distributors in that territory.
B. The Andersen sales representative will make calls in his territory
with distributor sales representatives for introduction of new
products, training in new selling techniques and training of
distributor's retail customers. Travel by an Andersen sales
representative into another Andersen sales representative's territory
is not encouraged and should be done only when absolutely necessary.
C. The Andersen sales representative will conduct meetings for a
distributor's retail customer in another Andersen representative's
territory when practical and if requested to do so, but will invite
the Andersen representative assigned to the other territory to attend
and participate in these meetings.
D. The Andersen sales representative servicing a distributor is the
representative from whom the distributor should seek sales help and
solutions to problems.
IV. ANDERSEN WILL PROVIDE THE FOLLOWING FOR ITS DISTRIBUTORS:
A. Administration of Sales Policy
1. The Andersen sales representative, with the regional sales
manager, is responsible for the interpretation and
administration of the Andersen Sales Policy and other Andersen
policies.
B. Sales Promotion Assistance
1. Andersen's promotional program is stated in the Andersen
Advertising and Sales Promotion Policy. Each Andersen
distributor, Andersen sales representative and regional sales
manager has a copy of the Andersen Advertising and Sales
Promotion Policy.
2. Andersen sales representatives will give adequate sales
promotion and selling time to all distributors but this should
be on a proportionally equal basis, based upon each
distributor's volume of sales and promotional activities. The
allocation of time spent with each distributor is the
responsibility of the Andersen sales representative.
3. Workshops
a. The Andersen sales representative will conduct workshops
for distributor personnel as needed.
b. Consistent with Distributor Bulletin SM-793, the Andersen
sales representative will assist distributors in
conducting dealer workshops as these are arranged.
4. Meetings
a. It is Andersen's recommendation that only Andersen
products be presented at promotional meetings. With the
expanded lines of Andersen products now available, an
effective presentation is not possible if other products
are shown.
b. Consistent with Distributor Bulletin SM-793, Andersen will
conduct meetings for a distributor and its retail
customers.
5. Service (repair) of Andersen products
a. The Andersen WindowCare [SM] service Policy is followed in
performing service work by Andersen sales representatives
and service representatives. Each Andersen distributor,
regional sales manager, Andersen sales representative and
service representative has a copy of the Andersen
WindowCare [SM] Service Policy.
b. Andersen will assist in training the Set-Up Department of
the distributor and distributor's retail customers and in
the training of distributor's service employees. This
work will be done by the Andersen sales representative and
service representative.
V. ANDERSEN EXPECTS THE DISTRIBUTOR TO PROVIDE THE FOLLOWING AS AN ANDERSEN
DISTRIBUTOR:
A. The distributor's obligation for handling and promoting Andersen
products:
1. Andersen expects the distributor to vigorously promote and sell
the available Andersen products that meet the building needs of
the distributor's primary market area as specified in
Distributor Bulletin SM-793.
2. To maintain a strong market position by selling inventories of
Andersen products to distributors' customers which do or will
actively promote, sell and support Andersen products.
3. To provide vigorous sales and sales promotion coverage to all
market factors, including promotion to architects, engineers
and other building professionals.
B. Cooperate with Andersen in providing distributor personnel for
training in selling and promotion techniques.
C. Sales promotion activities
1. Provide manpower at distributor meetings and promotional shows,
set up displays, furnish promotional material, participate in
presentations, etc. with the assistance of Andersen sales
representative. Provide transportation for these promotional
materials.
2. The distributor is expected to offer promotional programs for
retail customers in order to encourage and promote sales of
Andersen products.
D. Catalogs
To publish an assembled Andersen product catalog for its customers.
E. Service (setting up) of Andersen Products
All Andersen products should be set up by the distributor or the
distributor's retail customers according to the instruction sheets
and assembly manuals furnished by Andersen.
F. Service (scheduled delivery) of Andersen Products
Strive to give delivery within one week or provide whatever level of
more rapid service is necessary to meet competitive practices.
G. Service (repair) of Andersen Products
Assist Andersen in providing repair service of Andersen products in
line with the current published Andersen WindowCare [SM] Service
Policy.
It is not possible to anticipate all specific situations which might arise that
would relate to this Sales Policy. Situations not covered should be discussed
with the Andersen sales representative. The solving of problems arising from
distributor-retailer relationships is the responsibility of each Andersen
distributor.
Andersen retains the right to change or modify this Sales Policy and other
Andersen policies from time to time in its discretion.
Andersen Windows, Inc.
Bayport, Minnesota
September, 1994
ANDERSEN
DISTRIBUTOR BULLETIN
November 19, 1993
BULLETIN NO.: SM-793
SUBJECT: Primary Market Area Policy
EFFECTIVE: July 1, 1994
Effective July 1, 1994 this Bulletin replaces Distributor Bulletin No. SM-186
(except for 4., below, the change in which is effective January 1, 1994). This
Bulletin also qualifies the Andersen Windows, Inc. Sales Policy to the extent
the Sales Policy is inconsistent with the Bulletin. Andersen Windows, Inc.
(Andersen) hereby informs each of its distributors of the following policies
which have been adopted by Andersen:
1. Except as set forth in 1.a. and 1.b. below, Andersen will not make direct
shipments for a distributor to any location outside that distributor's
primary market area as determined from time to time by Andersen. (See 3.,
below and Appendix A to this Bulletin)
a. Effective July 1, 1994 Andersen will make direct shipments for a
distributor to a retailer's redistribution center located within or
outside that distributor's primary market area, provided (i) that
the retailer has an outlet located within that distributor's primary
market area and (ii) that annually the amount of the direct
shipments to the redistribution center for that distributor
substantially corresponds to or is less than the amount of Andersen
products the retailer ships back to outlets within the distributor's
primary market area.
If the amount of Andersen products cannot be identified
specifically, Andersen will estimate volume based on the number of
retail sales outlets within a distributor's Primary Market Area.
For the time period of July 1, 1994 through December 31, 1994
Andersen will estimate historical volume on the basis of sales from
July 1, 1993 through December 31, 1993. Effective January 1, 1995,
Andersen will estimate volume on the basis of sales during the prior
calendar year.
Andersen defines a redistribution center as a central warehouse
operated by a retailer at which the retailer receives shipments to
be redistributed by the retailer to other locations where the
retailer maintains sales outlets. In addition, to qualify as a
redistribution center for purposes of this Bulletin:
(1) the retailer must operate forty or more retail sales outlets in
at least eight or more states; and
(2) the retailer must have received at least $4 million (Andersen's
price to distributor) of Andersen products in direct van
shipments to the redistribution center in 1993.
b. Upon request from a distributor Andersen may make direct shipments
for the distributor to a location outside the distributor's primary
market area if Andersen determines that the circumstances justify
the shipments.
c. Andersen will not authorize customer pick-up at Andersen's Bayport,
Minnesota facility for a customer of the distributor located outside
that distributor's primary market area; and
d. Andersen will not authorize reconsignment of a car or van shipment
to any location outside that distributor's primary market area.
2. The following will apply with respect to any distributor location upon
Andersen's determining, based on information deemed sufficient by Andersen,
that at any time on or after July 1, 1994 that location has made a sale
from its warehouse to customers located outside its primary market area:
a. For a period of ninety (90) days after Andersen has determined that
a distributor location has made a sale outside its primary market
area, Andersen will apply a discount reduction to each invoice sent
by Andersen for all shipments to that distributor location. In the
case of a distributor organization with multiple locations, if
Andersen cannot determine the location which made the sale, the
discount reduction will be applied to shipments to the distributor's
location nearest to the customer to whom the sale was made.
b. The amount of the discount reduction will be one and one-half per
cent (1-1/2%), i.e. based on Andersen's current discounts the
discount on carload - vanload shipments will be 50% rather than
51.5% and on L.C.L. shipments will be 40% rather than 41.5%.
c. As to any sale or sales by a distributor location to which 2.a. -
2.b. above would otherwise apply, Andersen shall have the right, at
its election, to make an additional charge to that distributor
location in lieu of 2.a. - 2.b. above. The additional charge shall
be 10% of the dollar amount (Andersen's price to distributor) of the
sale or sales outside its primary market area by that distributor
location to which 2.a. 2.b. would otherwise apply.
The additional charge shall be invoiced by Andersen when Andersen
determines the sale or sales have been made and shall be payable by
the distributor in full thirty days after the date of invoice. The
amount of sales by the distributor location outside its primary
market area shall be determined by Andersen based on information
Andersen deems sufficient.
d. Amounts realized by Andersen from the discount reduction in 2.a. -
2.b. above or additional charge in 2.c. above will not be returned
to the distributor and may be used by Andersen for any purposes
determined by Andersen in its discretion. Such uses may include
application by Andersen of the amounts against costs or unrecovered
expenses related to sales by distributors outside their primary
market areas or for advertising or other sales promotion activities
supporting Andersen products.
e. Upon request from a distributor, this part 2. may be inapplicable to
sales made by the distributor outside its primary market area if
Andersen determines that the circumstances of such sales justify
inapplicability.
f. Andersen emphasizes that, as set forth in the final paragraph of
this Bulletin, it has the right to change, modify, or interpret this
Bulletin, including part 2, from time to time in its discretion.
Appendix B to this Bulletin contains examples of the application of this
part 2.
3. A list of those counties which effective July 1, 1994, Andersen considers
to be your primary market area is attached to this Bulletin as Appendix A.
Andersen has determined each distributor's primary market area on an
equitable basis. Upon any distributor's request, Andersen will identify
for any particular county or counties, the number and names of those
distributors that have that county within their primary market areas.
4. A partial list of the activities with respect to which Andersen will
participate for a distributor only within the distributor's primary market
area is attached to this Bulletin as Appendix C. This list applies
throughout the U.S. and the first part of it is effective at present.
Effective January 1, 1994, purchases by a dealer from a distributor whose
sales to the dealer are outside the distributor's primary market area at
the time of the sale will not qualify for the Andersen/Distributor
Cooperative Merchandising program for Andersen Dealers.
Implementation of this Distributor Bulletin is a matter solely between Andersen
and each of its individual distributors. If you have questions concerning the
Bulletin, please feel free to discuss them with the Andersen Regional Sales
Manager. We suggest that each distributor refrain from discussing this Bulletin
with any other Andersen distributor.
The Andersen Windows, Inc. Sales Policy remains in full force and effect,
except to the extent expressly modified in this Distributor Bulletin. Andersen
retains the right to change, modify, or interpret the policies set forth in this
Bulletin, as well as the Sales Policy and other Andersen policies, from time to
time in its discretion.
ANDERSEN WINDOWS, INC.
Revised April 6, 1994
Effective July 1, 1994
Appendix A
to Andersen Windows, Inc.
Distributor Bulletin No. SM-793
In accordance with paragraph 3 of Andersen Distributor Bulletin No. SM-793, the
primary market area of the following distributor authorized warehouse location:
MORGAN DISTRIBUTION
12100 HEATH STREET
BIRCH RUN, MI 48415
is comprised of these counties:
MICHIGAN
Alcona Crawford Isabella Oscoda
Alpena Eaton Lapeer Otsego
Antrim Emmet Luce Presque Isle
Arenac Genesee Mackinac Roscommon
Bay Gladwin Macomb Saginaw
Charlevoix Gratiot Midland St Clair
Cheboygan Huron Montcalm Sanilac
Chippewa Ingham Montmorency Shiawassee
Clare Ionia Oakland Tuscola
Clinton Iosco Ogemaw
Nothing in this Appendix or the accompanying Andersen Distributor Bulletin No.
SM-793, or in the Andersen Windows, Inc. Sales Policy or any other Andersen
policies or agreements, shall be interpreted to in any way indicate or otherwise
suggest that the distributor has an exclusive right to make sales to customers
in the counties listed above.
Andersen retains the right to provide for supplemental or alternative
distribution by Andersen or others in any or all of the counties listed above
from time to time in its sole discretion. Andersen retains the right to change
or modify the designation of counties in the above distributor's (or any other
distributor's) primary market area from time to time in its discretion by adding
counties, removing counties, or in any other manner.
Appendix B
to Andersen Windows, Inc.
Distributor Bulletin No. SM-793
Examples of Part 2 of Distributor Bulletin SM-793
(1) On August 1, 1994 Andersen determines that Distributor Location A
made a sale outside its primary market area on July 15, 1994. For
90 days beginning August 1, 1994 each invoice sent by Andersen for
shipments to that location will have a 1-1/2% discount reduction.
For example, if the total amount for Andersen products on an invoice
based on the Andersen Price Schedule is $100,000, Distributor
Location A will be invoiced $50,000 ($100,000 x .5) rather than
$48,500 ($100,000 x .485), assuming vanload shipments. This
discount reduction will apply to all invoices sent by Andersen for
shipments to that location from August 1, 1994 through October 29,
1994.
(2) The discount reduction will cease for invoices sent on and after
October 30, 1994 unless Andersen has determined that Distributor
Location A has made another sale outside its primary market area.
For example, if on October 15, 1994 Andersen determines that on
August 15, 1994 Distributor Location A made another sale outside its
primary market area, the discount reduction will apply to all
invoices sent by Andersen for shipments to that location through
January 12, 1995.
(3) The discount reduction will not apply to invoices sent by Andersen
for direct shipments from Bayport to the business locations of
customers of Distributor Location A. It only applies to shipments by
Andersen to Distributor Location A's warehouse.
Andersen retains the right to change, modify or interpret part 2 of Distributor
Bulletin SM-793 and the above examples from time to time in its discretion.
Appendix C
to Andersen Windows, Inc.
Distributor Bulletin No. SM-793
Andersen Activities Limited to a
Distributor's Primary Market Area
1. Effective at present:
a. Andersen will forward sales leads to a distributor only for those
counties within that distributor's primary market area. Andersen will
forward sales leads to dealers in accordance with Andersen's then
current policy.
b. With respect to customer calls on dealers and contractors, the
Andersen representative will travel with a distributor only within the
distributor's primary market area.
c. With respect to meetings and workshops held for the benefit of a
distributor, Andersen and Andersen representatives will participate
with a distributor in only those meetings and workshops held in the
distributor's primary market area.
d. With respect to meetings held for the benefit of dealers, Andersen and
Andersen representatives will participate with any dealer, and will
participate with those distributors in whose primary market areas the
dealer is located.
e. Andersen will participate in the Cooperative Print Advertising Program
for Distributors only for those advertisements printed in publications
circulated within a distributor's primary market area.
f. The Andersen Window of Knowledge [TM] System, the Andersen Window
Center [R] Program, group visits to Bayport, and the dealer built-in
display co-op program can be made available by a distributor only to
dealers located in the distributor's primary market area.
2. Effective January 1, 1994:
a. Purchases by a dealer from a distributor whose sales to the dealer are
outside the distributor's primary market area at the time of the sale
will not qualify for the Andersen/Distributor Cooperative
Merchandising program for Andersen Dealers.
For example, assume in each of 1993 and 1994 90% of Dealer X's
purchases of Andersen products are from a distributor selling within
its primary market area at the time of the sale and 10% of Dealer X's
purchases are from another distributor selling outside its primary
market area. 100% of Dealer X's purchases in 1993 qualify for its
co-op budget for use in 1994 and 90% of its purchases in 1994 qualify
for its co-op budget for use in 1995.
EXHIBIT 13
MORGAN PRODUCTS LTD.
FIVE-YEAR SELECTED FINANCIAL DATA
(In Thousands, Except Per Share Data)
OPERATING RESULTS
Year Ended December 31,
------------------------------------------------
1994 1993 1992 1991 1990
------------------------------------------------
Net Sales.................. $358,357 $392,702 $387,393 $353,144 $413,527
Gross Profit............... 52,398 52,797 51,833 44,924 53,860
Operating Expenses......... 58,292 49,347 58,690 53,292 48,477
Operating Income (Loss).... (5,894) 3,450 (6,857) (8,368) 5,383
--------- -------- -------- -------- --------
Other Expense.............. (3,307) (2,248) (4,325) (4,141) (5,162)
--------- -------- -------- -------- --------
Income (Loss) Before Income
Taxes.................... (9,201) 1,202 (11,182) (12,509) 221
--------- -------- -------- -------- --------
Net Income (Loss).......... $ (9,401) $ 952 $(10,178) $ (8,131) $ 135
========= ======== ======== ======== ========
Earnings (Loss) Per Share.. $ (1.10) $ .11 $ (1.20) $ (.96) $ .02
========= ======== ======== ======== ========
Weighted Average
Common and
Common Equivalent
Shares Outstanding........ 8,549 8,495 8,490 8,466 8,438
BALANCE SHEET DATA
AT DECEMBER 31,
----------------------------------------------
1994 1993 1992 1991 1990
----------------------------------------------
Working Capital............ $ 61,639 $ 77,225 $ 69,534 $ 71,274 $ 72,499
Total Assets............... 113,308 133,280 130,355 136,003 156,105
Long-Term Debt, Net of Cash 27,050 43,215 40,257 38,128 32,750
Stockholders' Equity....... 55,192 64,481 63,499 73,640 81,460
Long-Term Debt, Net of Cash to
Total Capitalization...... 32.9% 40.1% 38.8% 34.1% 28.7%
Return on Stockholders'
Equity................... (15.7)% 1.5% (14.8)% (10.5)% 0.2%
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Year Ended December 31, 1994 vs.
Year Ended December 31, 1993
The Company's net sales for 1994 were $358.4 million, representing a
decrease of 8.7% from 1993 net sales of $392.7 million. The reduction in net
sales was primarily the result of a 13.3% decrease in sales of manufactured
products and a 7.5% decrease in sales of distributed products. Management
believes that the decline in sales of products distributed by the Company is due
to a major supplier's reallocation of sales regions among its network of
distributors, and by an anticipated up-front loss of some business as a result
of margin improvement programs, which are expected to generate additional profit
in 1995 and beyond. Management also believes part of the decline in sales of
products manufactured by the Company is due to the ongoing weakness in demand
for high quality wood doors in a very cost conscious market. In addition, the
manufacturing sales decline reflects the loss of low margin business following
the closing of the Springfield, Oregon plant.
The Company reported a net loss of $9.4 million or $1.10 per share for 1994
compared to net income of $1.0 million or $0.11 per share, for 1993, on average
shares outstanding of 8,549,159 and 8,494,602, respectively. Included in the
1994 results was a net restructuring charge of $11.3 million ($1.32 per share)
to cover the cost of closing the Springfield plant, the Weed, California Veneer
operation and provide for other cost reductions and consolidation within Morgan
Products.
Excluding the $11.3 million restructuring charge for 1994, the Company had
income of $1.9 million. The increase in income from 1993, net of the
restructuring charge, was primarily caused by a decrease in operating expenses
partially offset by a decrease in gross profit, and an increase in other
expense.
The gross profit decrease of $0.4 million from 1993 to 1994 was primarily
the result of the aforementioned decrease in sales at both the manufacturing and
distribution divisions. Partially offsetting this was an improvement in gross
margins for products distributed and manufactured. The Company's gross profit
as a percentage of net sales improved from 13.4% in 1993 to 14.6% in 1994.
Operating expenses for 1994 were $58.3 million, or 16.3% of net sales,
compared to 1993 operating expenses of $49.3 million, or 12.6% of net sales.
Excluding the restructuring charge, 1994 operating expenses were $47.0 million,
or 13.1% of net sales. Contributing to the year to year decline in operating
expenses (excluding the restructuring charge) were decreases in employment
related costs, travel and entertainment, advertising and promotional, and bad
debt expenses.
Other expense increased $1.1 million from 1993 to 1994 primarily due to the
1993 disposition of idle assets in excess of their carrying value by
approximately $1.0 million which offset other expense. Interest expense
decreased to $3.8 million in 1994 from $4.0 in 1993 due to lower debt levels
throughout 1994. Partially offsetting this was the impact of higher borrowing
rates.
The provision for income taxes in both 1994 and 1993 relates to the
recording of state taxes. There is no provision for federal taxes in either
period given the Company's net operating loss position (see Note 10 of Notes to
Consolidated Financial Statements).
During 1994, the Company adopted Statements of Financial Accounting
Standards No. 112, "Employer's Accounting for Postemployment Benefits." This
adoption had no material effect on net income.
RESULTS OF OPERATIONS
Year Ended December 31, 1993 vs
Year Ended December 31, 1992
The Company's net sales for 1993 were $392.7 million, representing an
increase of 1.4% from net sales for the same period in 1992 of $387.4 million.
This increase was the result of more than an $11.1 million increase in net sales
of products distributed by the Company, offset in part by a decline in net sales
of products manufactured by the Company. Management believes the net sales
decline of manufactured products was a result of continued weakness in the
Northeast and West, key markets for fir manufactured products, coupled with a
continued escalation of raw material costs.
For 1993 the Company reported net income of $1.0 million, or $.11 per share
compared to a net loss of $10.2 million, or $1.20 per share in the same period
in 1992, on outstanding average shares of 8,494,602 and 8,490,383, respectively.
Included in the 1992 results was a net restructuring charge of $7.9 million for
the writedown of certain idle facilities and equipment to its estimated fair
market value, certain expenses associated with the rationalization of capacity
at the Company's three main door manufacturing facilities, and provisions
related to the possible sale of part or all of its Morgan Technologies business
unit.
Excluding the $7.9 million restructuring charge from 1992 results, the
Company had a net loss of $2.3 million, or $0.27 per share for 1992. Excluding
the 1992 restructuring charge, 1993 net income improved $3.3 million or $0.38
per share. This improvement was the result of a nominal increase in gross
profit, reductions in operating expenses and an improvement in other income
items, offset, in part, by an increase in provision for income taxes.
Gross profit increased slightly from 1992 to 1993 as a result of the
aforementioned net sales increase. There was no change in the gross profit
percentage.
Operating expenses for 1993 were $49.3 million, or 12.6% of net sales,
compared to 1992 operating expenses of $58.7 million, or 15.2% of net sales.
Excluding the provision for restructuring, 1992 operating expenses were $50.8
million, or 13.1% of net sales. The decrease in operating expenses (excluding
the restructuring charge) was primarily the result of the elimination of
operating expenses related to the Morgan Technologies business unit and a
decrease in the amount of bad debt expenses.
Other expense in 1993 was $2.2 million compared to $4.3 million in 1992.
This improvement resulted primarily from the previously mentioned gains in 1993
from the disposition of idle assets in excess of their carrying value by $1.0
million. The carrying values recorded due to the restructuring in the fourth
quarter of 1992 were based on independent party evaluations, and the amounts
realized in 1993 in excess of the carrying values occurred from negotiations
with the buyers that did not commence until April, 1993. In addition, 1992
expenses included the holding
costs of these idle assets.
The provision for income taxes in 1993 related to the recording of state
taxes. The benefit recorded in 1992 reflects utilization of losses to the
extent of benefits realized. The 1992 results generated a net operating loss
carryforward which may be used to offset future years' taxable income when
generated (see Note 10 of Notes to Consolidated Financial Statements).
SIGNIFICANT BUSINESS TRENDS/UNCERTAINTIES
Management believes that housing starts have a significant influence on the
Company's level of business activity. According to an industry source (F.W.
Dodge), actual single family national housing starts were up 3.6% to 1.243
million in 1994 compared to 1.199 million in 1993. In the regions where the
Company has its largest market presence (New England, the Middle Atlantic, and
East North Central), starts were down 1%, 4.3% and .3%, respectively, from 1993
levels. Starts in the South Atlantic, West South Central and Pacific Southwest
regions were up 5.1%, 10.6% and 12.2%, respectively from 1993, however these are
areas where the Company does not have as large a market presence. Management
believes that as the market continues to move upscale, increased sales should
follow. However, higher mortgage rates may reduce sales in the housing market in
the near future.
Management also believes that the Company's ability to continue to
penetrate the residential repair and remodeling markets through sales to home
center improvement chains may have a significant influence on the Company's
level of business activity. Sales to these customers as a percentage of total
sales increased slightly from 29.3% in 1993 to 29.4% in 1994. However, overall
sales to these customers declined 8.7% to $105 million in 1994 compared to $115
million in 1993. Management believes this market will continue to be important
to the Company.
Over the last several years, the cost of the Company's primary raw
material, pine and fir lumber, has increased substantially to record levels.
This, coupled with continuing competitive pricing pressure during this period,
has had an adverse impact on profits. As a result, the Company is continuing
its efforts to expand the utilization, where appropriate, of engineered
materials in wood door components and to switch to alternate wood species. In
addition, the Company has established reliable offshore material resources.
Management believes that these actions, together with aggressive price increases
where competitive factors allow, will partially offset the impact of the high
costs of raw material.
In the first quarter of 1994, Andersen Corporation announced its intent to
realign its distribution territories. This has now been substantially
completed. Management believes that this revision will not materially affect
the financial performance of the Company in the long-term. However, as noted,
there has been some reduction in sales due to this realignment. Gross margin
improvement on Andersen sales has partially offset the impact of lost sales.
The Company announced on January 23, 1995 that its Board of Directors
approved a major investment project that will result in a new and much more
efficient approach to door manufacturing. The Company estimates that it will
invest up to $6 million in 1995 and 1996 in new machinery and equipment and
other process-related improvements associated with the new door manufacturing
project. Management believes that this project will give the Company a
competitive edge and will provide the Company with opportunities for growth in
new and expanded product areas. Management believes that installation of
equipment and machinery will begin in the fourth quarter of 1995, with
production to be underway by the end of 1995 or early 1996.
In the first quarter of 1995, the Company added Morgan National Accounts as
an operating business unit which serves large home center chains, marketing and
merchandising millwork and specialty building products for Morgan Manufacturing
and Morgan Distribution.
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital requirements are related to its sales level
which, because of its dependency upon housing starts and the repair and
remodeling market, is seasonal and, to a degree, weather dependent. This
seasonality affects the need for working capital inasmuch as it is necessary to
carry larger inventories and receivables during certain months of the year.
Working capital at December 31, 1994, was $61.6 million with a ratio of
current assets to current liabilities of 3.5 to 1.0, while at December 31, 1993,
working capital was $77.2 million with a current ratio of 4.5 to 1.0. The
decrease in working capital was partially the result of the provision for
restructuring, which increased current liabilities byRESULTS OF OPERATIONS
Year Ended December 31, 1993 vs
Year Ended December 31, 1992
The Company's net sales for 1993 were $392.7 million, representing an
increase of 1.4% from net sales for the same period in 1992 of $387.4 million.
This increase was the result of more than an $11.1 million increase in net sales
of products distributed by the Company, offset in part by a decline in net sales
of products manufactured by the Company. Management believes the net sales
decline of manufactured products was a result of continued weakness in the
Northeast and West, key markets for fir manufactured products, coupled with a
continued escalation of raw material costs.
For 1993 the Company reported net income of $1.0 million, or $.11 per share
compared to a net loss of $10.2 million, or $1.20 per share in the same period
in 1992, on outstanding average shares of 8,494,602 and 8,490,383, respectively.
the period ended December 31, 1993 reflected cash used by
ating activities of $3.0 million, mainly to support receivables and
inventory. Investing activities in 1994 used $2.8 million before the sale of the
idle Springfield facility for $3.5 million, compared to 1993 when investing
activities used $2.8 million before the proceeds received from the disposal of
various property, plant and equipment including the sale of the Shawano, WI
facility for $1.9 million. Financing activities used $13.2 million in 1994 to
repay debt versus $1.4 million generated during 1993 to finance the higher
working capital requirements.
As discussed in Note 5 of Notes to Consolidated Financial Statements, on
July 14, 1994, the Company signed a new $65 million revolving credit agreement.
The new agreement should assure the Company adequate capital over the next three
years as it moves to expand its core business. At December 31, 1994, $25
million of borrowings were outstanding on the revolver. The covenants of the
new agreement are similar to prior agreements adjusted for the one time
restructuring charge. The Company was in compliance with all covenants of the
credit agreement during the year and at December 31, 1994.
RESTRUCTURING OF OPERATIONS
The Company's decision to take an $11.3 million restructuring charge,
including the shutdown of the Springfield and Weed Veneer plants in May 1994,
was based on lower demand for high quality wood panel doors, as high raw
material costs increased selling prices making lower cost substitute products
more attractive. In addition, decorating fashion has also moved to a painted
versus stained finish which allows lower cost non-wood products to be used.
A review of the Morgan Manufacturing business unit was undertaken in 1992.
At that time, door production capacity was rationalized through reductions in
personnel and product line variations, but leaving physical plant available
capacity unchanged. Those actions did not achieve the desired result. In
October of 1993, the Company announced that the Board of Directors had retained
Dillon, Read and Company, Inc., an investment banking firm, to assist the
Company in evaluating its strategic alternatives, including the possible sale of
Morgan Manufacturing. In the second quarter of 1994, management further
announced that Dillon, Read had ended discussions with certain parties, and that
the Company had decided to retain and realign the manufacturing business.
In early 1994, Morgan Manufacturing continued to experience order volume of
approximately 18,000-20,000 doors per week, or essentially 50% of plant
capacity. While production statistics continued to show favorable trends in
comparison to the prior year and plan on a per door basis, the three main door
plant configuration created a high fixed overhead situation. While modestly
better than 1993, the level of profitability was substantially below an adequate
return and well below the projected operating income which would be generated by
operating only two door plants. Consequently, in the second quarter of 1994,
the Company decided to shutdown the Springfield door and Weed Veneer plants and
provide for other cost reductions and consolidation within the Company, which
resulted in a restructuring charge of $11.3 million. With this decision,
management expects to more fully utilize manufacturing capacity by transferring
approximately $10 million of door volume from Springfield to the remaining two
facilities. The Company is continuing to evaluate its plans for capacity
reduction and consolidation in light of industry trends, current demand and
likely growth opportunities.
This restructuring charge incorporates the costs of certain personnel
actions including severence, outplacement, relocation and future workers
compensation claims ($4.8 million), costs of moving, reworking, selling or
writing off inventory ($3.7 million), holding costs for idle facilities until
they can be sold ($1.7 million), and other revaluations of assets to net
realizable value ($1.1 million). At the end of 1994, $4.9 million of the
original $11.3 million had been used and the closing of the two plants was
substantially completed. The remaining reserve relates primarily to the other
cost reductions and consolidation within the Company.
During the third quarter of 1994, the Company reviewed the charges reserved
for in the original restructuring and determined that certain estimated costs
for closing the Weed Veneer operations would not be as high as originally
anticipated. However, certain other cost reduction and restructuring actions
were approved and provided for which offset the lower expenses anticipated to
close the Weed Veneer facility. Accordingly, $.4 million of the restructuring
reserve was reallocated for the downsizing of two distribution centers and $.5
million to cover the restructuring and relocation of the Corporate headquarters
(See Note 2 of Notes to Consolidated Financial Statements).
SEASONAL NATURE OF BUSINESS
The building products industry is seasonal, particularly in the Northeast
and Midwest regions of the United States where inclement weather during the
winter months usually reduces the level of building activity in both the
improvement, maintenance and repair market and the new construction market. The
Company's lowest sales levels generally occur during the first and fourth
quarters. However, the Company's Southeast door manufacturing facility, which
serves the more moderate climates, including the West Coast, partially offsets
the effect of seasonal influences on the Company's operations.
The table below sets forth the Company's quarterly net sales during the
years ended December 31, 1994 and 1993:
1994 1993
-------------------- --------------------
Net % of Net % of
Sales Total Sales Total
-------------------- --------------------
(millions) (millions)
First Quarter $ 82.8 23.1% $ 95.0 24.2%
Second Quarter 95.2 26.6 96.2 24.5
Third Quarter 95.2 26.6 106.5 27.1
Fourth Quarter 85.2 23.7 95.0 24.2
------- ----- ------- -----
Total Year $ 358.4 100.0% $ 392.7 100.0%
======= ===== ======= =====
See Note 13 of Notes to Consolidated Financial Statements for further
quarterly information.
REPORT OF MANAGEMENT
The management of Morgan Products Ltd. is responsible for the Consolidated
Financial Statements and other information included in this Annual Report and
for ascertaining that the data fairly reflects the Company's financial condition
and results of operations. The Company prepared the Consolidated Financial
Statements in accordance with generally accepted accounting principles
appropriate in the circumstances, and such statements necessarily include
amounts that are based on best estimates and judgments with appropriate
considerations given to materiality.
The Company's system of internal control is designed to provide reasonable
assurance that Company assets are safeguarded from loss or unauthorized use or
disposition and that transactions are executed in accordance with management's
authorization and are properly recorded to permit the preparation of financial
statements in accordance with generally accepted accounting principles. The
internal control system is augmented by careful selection and training of
qualified employees, proper division of responsibilities and the development and
dissemination of written policies and procedures.
The Audit Committee of the Board of Directors is comprised of Directors who
are not employees of the Company. The Audit Committee is responsible for
reviewing and evaluating the Company's financial reporting and accounting
practices and related matters. The Audit Committee meets periodically with
management and the independent accountants to discuss any and all matters within
the Committee's responsibilities. The independent accountants have free access
to the Committee, without the presence of management.
The Company's Consolidated Financial Statements have been audited by Price
Waterhouse LLP, independent accountants, whose report also appears on this
page.
/s/ Larry R. Robinette
Larry R. Robinette
President and Chief Executive Officer
/s/ Douglas H. MacMillan
Douglas H. MacMillan
Vice President and Chief Financial Officer
Lincolnshire, Illinois
January 25, 1995
REPORT OF INDEPENDENT ACCOUNTS
To the Board of Directors and
Stockholders of Morgan Products Ltd.
In our opinion, the statements appearing on pages 14 to 22 of this report
present fairly, in all material respects, the financial position of Morgan
Products Ltd. at December 31, 1994 and 1993, and the results of its operations
and its cash flows for each of the three years in the period ended December 31,
1994, in conformity with generally accepted accounting principles. 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 audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which 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, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion expressed
above.
/s/ Price Waterhouse LLP
Milwaukee, Wisconsin
January 25, 1995
CONSOLIDATED INCOME STATEMENTS
- ----------------------------------------------------------------------------
MORGAN PRODUCTS LTD.
(in thousands, except per share amounts)
Year Ended December 31,
------------------------------------
1994 1993 1992
------------------------------------
Net Sales.................... $358,357 $392,702 $387,393
Cost of Goods Sold........... 305,959 339,905 335,560
-------- -------- --------
Gross Profit............... 52,398 52,797 51,833
-------- -------- --------
Operating Expenses
Sales and Marketing........ 36,251 38,859 38,568
General and Administrative. 10,750 10,488 12,256
Provision for Restructuring. 11,291 -- 7,866
-------- -------- --------
(Note 2)
58,292 49,347 58,690
-------- -------- --------
Operating Income (Loss)...... (5,894) 3,450 (6,857)
-------- -------- --------
Other (Expense) Income
Interest................... (3,776) (3,968) (3,915)
Other...................... 469 1,720 (410)
-------- -------- --------
(3,307) (2,248) (4,325)
-------- -------- --------
Income (Loss) Before
Income Taxes............... (9,201) 1,202 (11,182)
Provision (Benefit) for
Income Taxes............... 200 250 (1,004)
-------- -------- --------
Net Income (Loss)............ $ (9,401) $ 952 $(10,178)
======== ======== ========
Earnings (Loss) Per Share.... $ (1.10) $ .11 $ (1.20)
======== ======== ========
Weighted Average Common
and Common Equivalent
Shares Outstanding......... 8,549 8,495 8,490
======== ======== ========
The accompanying notes are an integral
part of the financial statements.
CONSOLIDATED BALANCE SHEETS
- ----------------------------------------------------------------------------
MORGAN PRODUCTS LTD.
(in thousands)
AT DECEMBER 31,
-----------------------------------
1994 1993
-----------------------------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents........ $ 6,195 $ 3,454
Accounts receivable (less allowances
of $953 in 1994 and $1,448 in 1993) 24,361 32,264
Inventories (Note 3)............. 54,957 62,715
Other current assets............. 997 922
-------- --------
Total current assets........ 86,510 99,355
-------- --------
PROPERTY, PLANT AND EQUIPMENT, Net (Note 4) 20,780 27,944
OTHER ASSETS (Notes 1 and 9).......... 6,018 5,981
-------- --------
$113,308 $133,280
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of
long-term debt (Note 5)........ $ 1,205 $ 982
Accounts payable................ 11,510 13,492
Accrued compensation and
employee benefits............... 8,176 4,021
Income tax payable.............. 203 --
Other current liabilities....... 3,777 3,635
-------- --------
Total current liabilities.. 24,871 22,130
-------- --------
LONG-TERM DEBT (Note 5).............. 33,245 46,669
-------- --------
COMMITMENTS AND CONTINGENCIES (Note 12)
STOCKHOLDERS' EQUITY: (Note 7)
Common stock, $.10 par value,
8,640,713 and 8,496,521 shares
outstanding, respectively...... 864 850
Paid-in capital................. 33,733 33,021
Retained earnings............... 21,257 30,658
-------- --------
55,854 64,529
Treasury stock, 2,386 shares,
at cost........................ (48) (48)
Unearned Compensation -
restricted stock................. (614) --
-------- --------
55,192 64,481
-------- --------
$113,308 $133,280
======== ========
The accompanying notes are an integral part of the financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOW
- ----------------------------------------------------------------------------
MORGAN PRODUCTS LTD. (in thousands)
Year Ended December 31,
---------------------------------
1994 1993 1992
---------------------------------
CASH GENERATED (USED) BY OPERATING
ACTIVITIES:
Net income (loss)................. $ (9,401) $ 952 $(10,178)
Add (deduct) noncash items
included in income:
Depreciation and amortization... 4,794 5,055 6,033
Provision for doubtful accounts. (54) 697 971
Deferred income taxes........... -- -- (3,302)
Provision for restructuring..... 11,291 -- 7,866
Loss (gain) on sale of property,
plant and equipment............ (142) (1,394) 38
Other........................... 85 6 279
Cash generated (used) by changes
in components of noncash working
capital:
Accounts receivable............ 7,957 (6,877) (32)
Inventories..................... 5,334 (2,273) (4,682)
Accounts payable................ (1,982) 2,342 1,459
Other working capital........... (3,406) (1,487) 4,109
--------- -------- --------
NET CASH GENERATED (USED) BY OPERATING
ACTIVITIES:......................... 14,476 (2,979) 2,561
--------- -------- --------
CASH GENERATED (USED) BY INVESTING
ACTIVITIES:
Acquisition of property, plant
and equipment.................. (1,173) (1,946) (3,339)
Proceeds from disposal of property,
plant and equipment............. 4,193 3,759 445
Acquisition of other assets, net. (1,581) (893) (1,694)
--------- -------- --------
NET CASH GENERATED (USED) BY INVESTING
ACTIVITIES:........................ 1,439 920 (4,588)
--------- -------- --------
CASH GENERATED (USED) BY FINANCING
ACTIVITIES:
Net change in short-term debt..... 999 (5,651) 18,228
Proceeds from long-term debt...... 25,000 11,226 18,365
Repayments of long-term debt...... (39,200) (4,250) (32,276)
Common stock issued for cash...... 27 31 37
--------- -------- --------
NET CASH GENERATED (USED) BY
FINANCING ACTIVITIES:............... (13,174) 1,356 4,354
--------- -------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS.................... 2,741 (703) 2,327
CASH AND CASH EQUIVALENTS:
Beginning of period............... 3,454 4,157 1,830
--------- -------- --------
End of period..................... $ 6,195 $ 3,454 $ 4,157
========= ======== ========
CASH PAID (RECEIVED) DURING THE YEAR FOR:
Interest.......................... $ 3,733 $ 3,598 $ 3,820
Income taxes...................... (9) 149 (1,362)
The accompanying notes are an integral
part of the financial statements.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
- ----------------------------------------------------------------------------
MORGAN PRODUCTS LTD.
(in thousands)
UNEARNED
COMPENSATION-
COMMON PAID-IN RETAINED TREASURY RESTRICTED
STOCK CAPITAL EARNINGS STOCK STOCK
---------------------------------------------
Balance at December 31, 1991..... $ 849 $32,954 $39,885 $ (48)$ --
Net Loss....................... -- -- (10,178) -- --
Other.......................... -- 37 -- -- --
----- ------- ------- ----- -----
Balance at December 31, 1992..... 849 32,991 29,707 (48) --
Net Income..................... -- -- 952 -- --
Other.......................... 1 30 (1) -- --
----- ------- ------- ----- -----
Balance at December 31, 1993..... 850 33,021 30,658 (48) --
Net Loss ...................... -- -- (9,401) -- --
Issuance of Restricted Stock... 14 686 -- -- (700)
Amortization of Unearned
Compensation................. -- -- -- -- 86
Other.......................... -- 26 -- -- --
----- ------- ------- ----- -----
Balance at December 31, 1994...... $ 864 $33,733 $21,257 $ (48)$(614)
===== ======= ======= ===== =====
The accompanying notes are an integral
part of the financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MORGAN PRODUCTS LTD.
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
- ----------------------------------------
DESCRIPTION OF BUSINESS - Morgan Products Ltd. ("Morgan" or the "Company")
manufactures and purchases products (virtually all considered to be millwork)
which are sold to the residential and light commercial building materials
industry and are used for both new construction and improvements, maintenance
and repairs. In view of the nature of its products and the method of
distribution, management believes that the Company's business constitutes a
single industry segment.
CONSOLIDATION - The consolidated financial statements include the accounts of
all business units of Morgan Products Ltd. All intercompany transactions,
profits and balances are eliminated.
EARNINGS PER SHARE AND SHARE DATA - Earnings per share are computed using the
weighted average number of common and, when applicable, common equivalent shares
outstanding during the period.
INVENTORIES - Inventories are valued at the lower of cost or market. Cost is
determined on the first-in, first-out (FIFO) method.
PROPERTIES - Property, plant and equipment are stated at cost and depreciated
on a straight line basis over the estimated useful lives of the assets which
generally range from 35 years for buildings, 10 to 20 years for building
equipment and improvements, and 5 to 10 years for machinery and equipment.
Expenditures which substantially increase value or extend useful life are
capitalized. Expenditures for maintenance and repairs are charged against
income as incurred.
OTHER ASSETS - Included in other assets are software costs which are amortized
over their estimated useful lives and deferred debt issue costs which are
amortized over the life of the related debt agreement.
STATEMENT OF CASH FLOW - The Company considers all highly liquid debt
instruments with a maturity of 91 days or less at the time of purchase to be
cash equivalents.
NOTE 2 - PROVISION FOR RESTRUCTURING
- ------------------------------------
In the fourth quarter of 1993, the Company announced that it had retained the
investment banking firm of Dillon, Read & Company, Inc. to help evaluate
strategic alternatives for the Company, including the possible sale of its
Morgan Manufacturing business unit. In the second quarter of 1994, management
further announced that Dillon, Read ended discussions with certain parties, and
that the Company had decided to retain and realign the manufacturing business.
On May 28, 1994, the Company recorded an $11.3 million restructuring charge to
cover the cost of closing the Springfield, Oregon plant, the Weed, California
Veneer operation and provide for other cost reductions and consolidation within
the Company. This charge incorporates the costs of certain personnel actions
including severance, outplacement, and relocation; costs of moving, reworking,
selling, or writing off inventory; holding costs for idle facilities until they
can be sold; and the revaluation of idle assets to estimated net realizable
value based on independent appraisal information.
During the third quarter of 1994, the Company reviewed the charges with
respect to matters reserved for in the restructuring and determined that certain
estimated costs would not be as high as originally anticipated. However,
certain other cost reduction and restructuring actions were approved and
provided for during the third quarter which offset the lower expenses originally
anticipated. Accordingly, $.4 million of the restructuring reserve was
reallocated for the downsizing of two distribution centers, and $.5 million to
cover the restructuring and relocation of the Corporate headquarters.
Significant reserve components and 1994 activity are as follows (in millions):
Reserve Utilized Reserve at
at May 28,-------------- December 31,
1994 Cash Noncash Reallocated 1994
---------------------------------------------------
Employee Benefits(1) $ 4.8 $(1.7) -- $(0.4) $ 2.7
Inventory(2) 3.7 (0.6) $(1.2) (0.1) 1.8
Fixed Assets 1.1 -- -- 0.2 1.3
Holding and Other
Costs(3) 1.7 (1.4) -- 0.3 0.6
----- ----- ----- ----- -----
$11.3 $(3.7) $(1.2) $ -- $6.4
===== ===== ===== ===== =====
(1) Costs associated with severance, outplacement and future workers
compensation claims due to the closing of the Springfield, Weed Veneer and other
facilities.
(2) Primarily costs associated with inventory that could not be utilized or
costs of reworking inventory for use in other facilities due to closing of the
Springfield, Weed Veneer and other facilities.
(3) Costs associated with continuing utility, depreciation and property tax
due to the closing of the Springfield, Weed Veneer and other facilities.
The downsizing of the distribution centers and the closing of the Springfield
and Weed Veneer facilities were substantially completed during 1994. All 158
Springfield employees, 29 Weed Veneer employees and 5 Oshkosh employees were
terminated. This represented a 25% reduction in workforce at the Manufacturing
division. The remaining reserve relates primarily to other cost reductions and
consolidation to be taken in 1995 within the Company and the corporate
headquarters relocation. By November of 1994, the sale of the Springfield plant
and Springfield and Weed Veneer machinery and equipment was completed. The
corporate headquarters is being moved to Williamsburg, Virginia in order to
reduce occupancy expense, facilitate personnel cost reductions, and locate
nearer to the Company's traditional major markets. The Company is continuing to
evaluate its plans for capacity reduction and consolidation in light of industry
trends, current demand and likely growth opportunities.
During the fourth quarter of 1992, the Company recorded a $7.9 million
provision for restructuring. The provision for restructuring includes the
writedown of certain idle facilities and equipment to net realizable value,
certain costs associated with the rationalization of capacity at the three main
door manufacturing facilities and a provision relating to the possible sale of
a part or all of its Morgan Technologies software development business unit.
During 1993 these idle assets were disposed of at or above their carrying
values.
NOTE 3 - INVENTORIES
_____________________
Inventories consisted of the following at (in thousands of dollars):
December 31,
-------------------------
1994 1993
-------------------------
Raw materials $ 9,685 $13,855
Work-in-process 5,272 6,043
Finished goods 40,000 42,817
------- -------
$54,957 $62,715
======= =======
NOTE 4 - PROPERTY, PLANT AND EQUIPMENT
- --------------------------------------
Property, plant and equipment consisted of the following at (in thousands of
dollars):
December 31,
-----------------------
1994 1993
-----------------------
Land and improvements $ 2,765 $ 2,875
Buildings and improvements 15,593 19,766
Machinery and equipment 21,948 30,238
Capitalized building and
equipment leases 5,328 5,328
Less accumulated depreciation
and amortization (24,950) (30,599)
Construction in progress 96 336
------- -------
$20,780 $27,944
======= =======
NOTE 5 - LONG-TERM DEBT
- -----------------------
Long-term debt consisted of the following at (in thousands of dollars):
December 31,
-----------------------
1994 1993
-----------------------
Revolving credit facilities $25,000 $38,200
Industrial revenue bonds 2,300 1,962
Obligations under capital leases
(Note 6) 3,820 4,223
Obligations under financing leases 2,306 2,491
Other 1,024 775
------- -------
34,450 47,651
Less current maturities (1,205) (982)
------- -------
Total long-term debt $33,245 $46,669
======= =======
On July 14, 1994, the Company signed a new revolving credit agreement with
Barclays Business Credit Inc. (now part of Shawmut Capital Corporation) which
provides for a revolving credit facility of up to $65 million through July 13,
1997, and includes a letter of credit facility of up to $9 million through July
13, 1997. This credit facility is secured by certain accounts receivable,
inventories, equipment, real estate and general intangibles of the Company.
Available borrowings under the revolving credit facility bear interest at the
option of the Company at the prime rate plus an incremental 1.25 percentage
points or at the LIBOR rate plus an incremental 2.75 percentage points. The
Company also pays an annual commitment fee of 0.5 percent on the average unused
portion of the revolving credit line and certain additional fees.
The credit facility contains certain covenants including limitations on the
acquisition and disposition of assets, on the pledging of assets other than
those pledged under the industrial revenue bonds, and the requirement that the
Company maintain minimum tangible net worth, leverage and interest coverage
ratios. The Company was in full compliance with the restrictions and covenants
contained in the credit agreement during the year and at December 31, 1994.
As of December 31, 1994, the Company had utilized $5.8 million of its $9
million letter of credit facility and had borrowings of $25 million under the
revolving credit facility.
The industrial revenue bond outstanding at December 31, 1994 bears a floating
interest rate equal to eighty percent (80%) of the bond equivalent yield
applicable to 91-day United States Treasury Bills. There bonds are secured by
assets with a book value of $8.9 million and $2.45 million in letters of credit.
During 1991, the Company entered into a sale-leaseback transaction which,
based upon the applicable terms, is accounted for as a financing lease. The
term of the agreement is 15 years beginning on December 31, 1991 and expiring on
December 29, 2006 with an interest rate of 9.73% annually.
Future annual maturities and sinking fund requirements of the Company's
long-term debt as of December 31, 1994 are presented below (in thousands of
dollars):
1995 $ 1,205
1996 1,023
1997 26,004
1998 942
1999 998
Later years 4,278
--------
$ 34,450
========
The recorded value of the Company's debt obligations at December 31, 1994
approximates fair market value.
NOTE 6 - LEASE OBLIGATIONS
- --------------------------
Certain leased equipment and distribution facilities have been capitalized by
the Company. The Company also leases certain facilities, equipment and vehicles
under noncancellable agreements which are operating leases.
Future minimum lease payments required under long-term leases in effect at
December 31, 1994 are as follows (in thousands of dollars):
------------------------------
Capital Operating Total
------------------------------
1995 $ 922 $ 4,430 $ 5,352
1996 902 3,348 4,250
1997 722 1,654 2,376
1998 722 1,294 2,016
1999 722 1,113 1,835
Later years 4,870 1,388 6,258
------- ------- -------
$ 8,860 $13,227 $22,087
======= =======
Less imputed interest (5,040)
-------
$ 3,820
=======
For 1994, 1993, and 1992, rental expense, including usage charges on the
long-haul fleet, was $6.6 million, $6.7 million and $6.7 million, respectively.
NOTE 7 - STOCKHOLDERS' EQUITY
- -----------------------------
COMMON STOCK - The number of authorized shares of Common Stock is 20,000,000
shares.
PREFERRED STOCK - The number of authorized shares of Preferred Stock is
5,000,000 shares.
STOCK OPTION PLAN - In June 1985, the Company adopted a Stock Option Plan
which, as amended, provides for, (i) the issuance of incentive stock options
at a purchase price approximating the fair market value at the date of grant and
(ii) the issuance of non-qualified options at a price determined by the
Compensation Committee, a committee of the Board of Directors, which cannot be
less than 85% of the market price at the date of grant. In May 1989, the
stockholders ratified a proposal that amended the Company's Stock Option Plan to
increase from 500,000 to 750,000 the number of shares of Common Stock reserved
for issuance under the plan.
As of December 31, 1994, the Company has set aside 646,800 shares of its
Common Stock for the granting of such options. The options granted become
exercisable immediately or in two, three, four or five installments from the
date of grant, and all of the options granted expire no more than ten years from
the date of grant.
The following table provides summary information regarding stock options under
the Stock Option Plan:
1994 1993
--------------------------
Options outstanding at January 1 583,200 592,200
Granted(1) 492,500 --
Exercised -- --
Cancelled(1) (461,700) (9,000)
-------- -------
Outstanding at December 31(2) 614,000 583,200
======= =======
Option price range at December 31 $5.00 - $9.625 $6.63 - $12.50
Options exercisable at December 31 327,495 435,064
Options available for grant
at December 31 32,800 63,600
(1) The 1994 amounts include 150,500 options that were repriced in August 1994
and had original grant dates of May 24, 1990, August 9, 1991 and May 20, 1992.
(2) Options outstanding at December 31, 1994 and 1993 of 614,000 and 583,200,
respectively, consist solely of non-qualified options.
In May 1992, the stockholders approved the adoption of a Non-employee Director
Stock Option Plan (the "Director Plan"). The Director Plan provides for the
automatic grant of non-qualified stock options to purchase 1,000 shares of
Common Stock at a purchase price equal to the fair market value at the date of
grant upon a non-employee Director's election or re-election to the Board of
Directors. An aggregate of 50,000 shares of Common Stock are available for
grant under the Director Plan. The options granted become exercisable in three
annual installments from the date of grant and all of the options granted expire
ten years from the date of grant.
The following table provides summary information regarding stock options under
the Director Plan:
1994 1993
-----------------------
Options outstanding at January 1 8,000 4,000
Granted 3,000 4,000
Exercised -- --
Cancelled (2,000) --
----- -----
Options outstanding at December 31 9,000 8,000
===== =====
Option price range at December 31 $5.75-$9.125 $7.75-$9.125
Options exercisable at December 31 2,997 1,332
Options available for grant at
December 31 41,000 42,000
On August 19, 1994, the Company issued 140,000 restricted shares of the
Company's Common Stock to the Chief Executive Officer. These shares were
awarded to a trust of which the Chief Executive Officer is the beneficiary,
subject to certain restrictions and forfeiture provisions. The shares vest
ratably over a three year period ending August 19, 1997. The restrictions limit
the sale or transfer of shares during the restricted period. The trust will
immediately vest in the shares of Common Stock upon death, disability or
termination of the Chief Executive Officer as described in the plan. The
unamortized value of the Common Stock totaling $700,000 was recorded at the date
of award based upon the market value of shares as a separate component of
stockholders' equity and is being amortized to expense over the three year
vesting period.
On August 19, 1994, the Company also granted the Chief Executive Officer options
to purchase 250,000 shares of Common Stock at an exercise price of $5 per share
under the Company's stock option plan. This was the fair market value at the
date of grant. Vesting in these options will be over a three year period with
62,500 shares or 1/4 vested immediately. This grant is included in the table.
NOTE 8 - SHARE PURCHASE RIGHTS PLAN
- ------------------------------------
On March 14, 1989, the Board of Directors of the Company declared a dividend
of one share purchase right for each outstanding share of Common Stock. The
dividend was payable on March 24, 1989 to shareholders of record on that date.
Once exercisable, each right entitles its holder to purchase one share of Common
Stock for $70.00 per share (subject to adjustment). The rights are not
exercisable until 10 days after an acquiror acquires or obtains the right to
acquire 20% of the outstanding Common Stock (the share acquisition date) or 10
days after a tender offer or exchange offer is announced which would cause the
offeror to own 25% of the outstanding Common Stock, whichever is earlier.
At any time prior to the tenth day following the share acquisition date
(unless extended), the Company's directors may redeem the rights at a cost of
$0.01 per right. Unless so redeemed, the rights will expire March 15, 1999.
The Company's directors may amend the rights plan before the rights are
exercisable, and thereafter in any manner which does not adversely affect the
interests of the rights holders.
NOTE 9 - EMPLOYEE BENEFIT PLANS
- --------------------------------
The Company has a profit sharing and 401(k) savings plan for all salaried
employees and certain groups of hourly employees. The Company matches fifty
percent of participant contributions to the savings plan, in which Company
contributions are limited to three percent of the participant's compensation.
At the discretion of the Board of Directors, the Company may make an additional
contribution, which has been targeted at three percent of each participant's
compensation.
Profit sharing costs and the Company's matching contributions to the employee
savings plan charged to operations were $1.1 million, $.6 million and $.7
million for 1994, 1993 and 1992, respectively.
The Company has pension plans which cover some of its hourly employees. These
plans generally provide a stated benefit amount for each year of service. In
addition, the Company's former Nicolai subsidiary had two salaried pension plans
which were curtailed during 1986 and one hourly pension plan which was curtailed
in 1988.
For the hourly employees not covered by Company pension or profit sharing
plans, the Company makes contributions to multi-employer pension plans based on
compensable hours worked in accordance with union contracts. Under certain
conditions, principally withdrawal from such plans, the Company may have further
obligations for pensions with respect to such employees, but the amount thereof,
if any, cannot be determined at the present time.
Net pension expense for 1994, 1993 and 1992 was $119,000, $71,000 and $75,000,
respectively. The projected benefit obligations as of December 31, 1994 and
December 31, 1993 were $12.0 and $13.2 million respectively. The projected
benefit obligation was determined using assumed discount rates of 8.5% and 7.5%
at December 31, 1994 and 1993, respectively. The expected long term rate of
return on plan assets was 8.5% and 9.5% at December 31, 1994 and 1993,
respectively. Net assets available for plan benefits, at fair market value, as
of December 31, 1994 and December 31, 1993 were $12.1 and $13.4 million,
respectively. Prepaid pension expense at December 31, 1994 and 1993 was $1.9
and $1.8 million, respectively, and is included in other assets in the
accompanying consolidated balance sheet.
Plan assets consist of equity and fixed income securities and insurance
annuity contracts. It is the policy of the Company to fund at least the minimum
required amount in accordance with the requirements of the Employee Retirement
Income Security Act of 1974.
NOTE 10 - INCOME TAXES
- ----------------------
Effective January 1, 1993, the Company prospectively adopted Statement of
Financial Accounting Standards No. 109 (FAS 109), "Accounting For Income Taxes".
FAS 109 is an asset and liability approach to accounting for deferred income
taxes, that requires the recognition of deferred tax assets and liabilities for
the expected future tax consequences of events that have been recognized in the
Company's financial statements or tax returns. In estimating future tax
consequences, FAS 109 generally considers all expected future events other than
enactments of changes in the tax law or rates. Previously, the Company
accounted for income taxes under the FAS 96 asset and liability approach, which
gave no recognition to future events other than the recovery of assets and
settlement of liabilities at their carrying amounts. The adoption of FAS 109
had no material effect on net income in any period.
The components of the income tax provision (benefit) consisted of the
following (in thousands of dollars):
Year Ended December 31,
---------------------------
1994 1993 1992
---------------------------
Current:
Federal $ - $ - $ -
State 200 250 192
------- ------- -------
Total Current 200 250 192
------- -------
Deferred:
Federal - - (1,196)
State - - -
------- ------- -------
Total Deferred - - (1,196)
------- ------- -------
Net Income Tax Provision
(Benefit) $ 200 $ 250 $(1,004)
======= ======= =======
The reconciliation between the U.S. Federal statutory tax rate expressed as a
percentage of pre-tax income (loss) and the effective tax rate was as follows:
Year Ended December 31,
--------------------------
1994 1993 1992
--------------------------
U.S. Federal income tax rate (34.0)% 34.0% (34.0)%
Non-utilization (utilization) of
operating loss carryforward 33.1 (33.4) 27.0
State income taxes, net of federal
benefit 1.2 5.9 1.1
Non-deductible items 1.5 2.5 1.0
Other 0.4 11.8 (4.1)
---- ---- ----
2.2% 20.8% (9.0)%
==== ==== ====
Temporary differences and carryfowards which gave rise to deferred tax
assets and liabilities consisted of the following at (in thousands of dollars):
December 31,
----------------
1994 1993
----------------
Gross Deferred Tax Assets:
Operating loss carryforwards $ 3,601 3,921
Accrued expenses and reserves 3,818 1,770
Postretirement benefits 174 174
Other 97 60
------- ------
7,690 5,925
Valuation allowance (6,161) (3,130)
------- ------
1,529 2,795
------- ------
Gross Deferred Tax Liabilities:
Depreciation and amortization (949) (2,238)
Pensions (580) (557)
------- ------
(1,529) (2,795)
------- ------
Net Deferred Tax Asset
(Liability) $ 0 $ 0
======= =======
The 1992 deferred income tax benefit was determined under the liability method
of accounting (FAS 96). The major temporary differences which gave rise to the
deferred tax balance were depreciation, amortization and certain liabilities
which were deductible only when paid. The valuation allowance primarily
reflects operating loss carryforwards for which utilization is uncertain.
As of December 31, 1994, the Company has unused operating loss carryforwards
for tax purposes of approximately $10.6 million, which expire in years 2002
through 2008. No benefit for the remaining operating loss carryforwards has
been recognized in the consolidated financial statements. Should an ownership
change occur, as defined under Section 382 of the Internal Revenue Code, the
Company's ability to utilize the operating loss carryforwards would be
restricted.
NOTE 11 - RELATED PARTIES
- -------------------------
As of December 31, 1994, Saugatuck Capital Company Limited Partnership
("Saugatuck"), and certain members of management, in the aggregate, beneficially
owned approximately 24% of the Company's Common Stock. Under certain
circumstances Saugatuck controls the voting of these management shares.
NOTE 12 - COMMITMENTS AND CONTINGENCIES
- ---------------------------------------
Andersen Corporation ("Andersen"), whose products accounted for 39% of 1994
net sales, distributes its products only through independent distributors such
as the Company. The Company and its predecessors have distributed Andersen
products for over 39 years; however, the Company's agreement with Andersen
provides that Andersen can terminate any of the Company's distributorships at
any time upon 60 days notice. A termination or significant modification of the
distribution relationship with Andersen could have a material adverse effect on
revenues and earnings.
NOTE 13 - INTERIM FINANCIAL INFORMATION (UNAUDITED)
- ---------------------------------------------------
Summarized quarterly financial data for 1994 and 1993 are presented below (in
thousands, except per share data):
1st Quarter 2nd Quarter
------------------ -------------------
1994 1993 1994 1993
------------------ -------------------
Net Sales $82,803 $94,964 $95,238 $96,205
Gross Profit 12,844 14,112 13,603 13,704
Net Income (Loss) (345) 47 (10,724) 103
Earnings (Loss)
per Share $ (.04) $ -- $ (1.26) $ .01
3rd Quarter 4th Quarter
------------------ -------------------
1994 1993 1994 1993
------------------ -------------------
Net Sales $95,139 $106,523 $85,177 $95,010
Gross Profit 14,030 13,444 11,921 11,537
Net Income (Loss) 1,448 1,006 220 (204)
Earnings (Loss)
per Share $ .17 $ .12 $ .03 $ (.02)
The building products industry is seasonal, causing the Company's lowest
sales to occur during the first and fourth quarters.
COMMON STOCK MARKET PRICE RANGE AND DIVIDEND POLICY
The Common Stock of the Company commenced trading on the New York Stock
Exchange on March 7, 1988 (NYSE symbol: MGN). As of March 1, 1995, there were
approximately 2,940 holders of record of such Common Stock. The Company
currently does not pay cash dividends on its Common Stock. Any payment of
future dividends, and the amounts thereof, will be dependent upon the Company's
earnings, financial requirements, cash flow and other factors deemed relevant by
the Board of Directors.
The following table sets forth the high and low sale prices of the
Company's Common Stock reported in the New York Stock Exchange Consolidated
Transaction Reporting System.
High Low
-----------------------
1993:
First Quarter $ 7-7/8 $ 6-3/4
Second Quarter 8-1/4 6
Third Quarter 7-1/8 6
Fourth Quarter 9-1/8 6-1/4
1994:
First Quarter $ 8-7/8 $ 5-7/8
Second Quarter 6-3/4 4-3/4
Third Quarter 5-7/8 4-1/2
Fourth Quarter 6-1/4 5
On March 1, 1995, the closing price of the Common Stock was $6.13.
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectuses
constituting part of the Registration Statements on Form S-8 (No. 33-32264 and
No. 33-23882) and the Registration Statement on Form S-8 (No. 33-62148) of
Morgan Products Ltd. of our report dated January 25, 1996 appearing on page 19
of the Annual Report to Stockholders which is incorporated in this Annual Report
on Form 10-K. We also consent to the incorporation by reference of our report
on the Financial Statement Schedule which appears on page 19 of this Form 10-K.
PRICE WATERHOUSE LLP
Milwaukee, Wisconsin
March 27, 1996
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This schedule contains annual summary financial information extracted from
Morgan Products 1995 Annual Form 10-K and is qualified in its entirety by
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<COMMON> 0
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