FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
-----------------------
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-16254
Steel of West Virginia, Inc.
(Exact name of registrant as specified in its charter)
Delaware 55-0684304
(State or other jurisdiction I.R.S. Employer
of incorporation or organization) Identification No.
17th Street and 2nd Avenue, Huntington, West Virginia 25703
(Address of principal executive offices, Zip Code)
(304) 696-8200
(Registrant's telephone number, including area code)
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
---- ----
The number of shares outstanding of each of the issuer's classes of common
stock, as of June 30, 1996, is as follows:
5,986,060 shares of common stock, par value $.01 per share.
<PAGE>
STEEL OF WEST VIRGINIA, INC.
AND SUBSIDIARIES
INDEX
Page
Number
------
PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets as of 3
June 30, 1996 and December 31, 1995
Condensed Consolidated Statements of Income for 4
the Three-Month and Six-Month Periods Ended June 30, 1996
and June 30, 1995
Condensed Consolidated Statements of Cash Flows 5
for the Three-Month and Six-Month Periods Ended
June 30, 1996 and June 30, 1995
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of 9
Financial Condition and Results of Operations
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 6. Exhibits and Reports on Form 8-K 11
2
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. CONDENSED CONSOLIDATED BALANCE SHEETS
STEEL OF WEST VIRGINIA, INC. AND SUBSIDIARIES
(In thousands, except per share amounts)
June 30 December 31
1996 1995
--------- ---------
ASSETS
CURRENT ASSETS
Cash $ 100 $ 100
Receivables, net of allowances of $661
and $692 10,379 13,148
Inventories 17,309 17,095
Deferred income taxes 3,110 3,110
Other current assets 176 1,021
--------- ---------
TOTAL CURRENT ASSETS 31,074 34,474
Property, plant, and equipment 36,891 40,807
Goodwill 18,793 19,134
Other assets 624 708
--------- ---------
TOTAL ASSETS $87,382 $95,123
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Overdraft $ 857 $ 647
Accounts payable 3,086 5,045
Accrued payroll and benefits payable 4,368 5,240
Income taxes payable (refundable) (93) 117
Other current liabilities 1,672 2,026
Current maturities of long-term debt 4,934 5,885
--------- ---------
TOTAL CURRENT LIABILITIES 14,824 18,960
Long-term debt 11,215 11,978
Deferred income taxes 8,005 8,005
Other long-term liabilities 791 765
--------- ---------
TOTAL LIABILITIES 34,835 39,708
STOCKHOLDERS' EQUITY
Common stock, $.01 par value: 12,000,000
voting shares authorized, 7,091,360
issued and outstanding 71 71
Paid-in capital 26,597 26,597
Treasury stock (11,483) (7,983)
Retained earnings 37,362 36,730
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 52,547 55,415
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $87,382 $95,123
========= =========
NOTE: The balance sheet at December 31, 1995, has been derived from the
audited financial statements at that date.
See notes to condensed consolidated financial statements.
3
<PAGE>
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
STEEL OF WEST VIRGINIA, INC. AND SUBSIDIARIES
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
1996 1995 1996 1995
-------------------- --------------------
<S> <C> <C> <C> <C>
Net sales $23,797 $31,641 $50,444 $64,541
Cost of sales 21,429 26,043 44,669 53,601
------- ------- ------- -------
GROSS PROFIT 2,368 5,598 5,775 10,940
Selling and administrative expenses 987 1,295 2,155 2,693
Other operating expense (income) (103) (192) 1,749 (233)
------- ------- ------- -------
OPERATING INCOME 1,484 4,495 1,871 8,480
Interest expense 343 412 708 798
------- ------- ------- -------
INCOME BEFORE INCOME TAXES 1,141 4,083 1,163 7,682
Income Taxes (523) (1,570) (532) (2,974)
------- ------- ------- -------
NET INCOME $ 618 $ 2,513 $ 631 $ 4,708
======= ======= ======= =======
NET INCOME PER COMMON SHARE, based
on 5,986,923 and 6,060,658
weighted average shares of
common stock outstanding
during the three months and
six months ended June 30, 1996
and 6,951,693 and 7,021,527
weighted average shares of
common stock outstanding
during the three months and
six months ended June
30, 1995. $.10 $.36 $.10 $.67
==== ==== ==== ====
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE>
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
STEEL OF WEST VIRGINIA, INC. AND SUBSIDIARIES
(In thousands)
Three Months Ended Six Months Ended
June 30 June 30
1996 1995 1996 1995
-------------------- -------------------
CASH FROM OPERATIONS $ 3,939 $ 915 $ 6,448 $ 1,627
INVESTMENT ACTIVITIES
Additions to property, plant,
and equipment (798) (1,313) (1,444) (2,004)
FINANCING ACTIVITIES
Revolving credit loan (2,598) 3,810 1,228 3,808
Long-term debt repayments (1,471) (1,215) (2,942) (2,430)
Purchase of treasury stock 0 (2,590) (3,500) (2,590)
------- ------- ------- -------
(4,069) 5 (5,214) (1,212)
------- ------- ------- -------
INCREASE (DECREASE) IN CASH $ (928) $ (393) $ (210) $(1,589)
======= ======= ======= =======
See notes to condensed consolidated financial statements.
5
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
STEEL OF WEST VIRGINIA, INC. AND SUBSIDIARIES
June 30, 1996
NOTE A--BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements include
the accounts of Steel of West Virginia, Inc. (the Company) and its wholly-owned
subsidiaries SWVA, Inc. and Marshall Steel, Inc. Such condensed financial
statements have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to Form
10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. Operating results for the three-month and
six-month periods ended June 30, 1996 are not necessarily indicative of the
results that may be expected for the year ended December 31, 1996. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Company's annual report on Form 10-K for the year ended
December 31, 1995.
The preparation of the condensed consolidated financial statements in conformity
with generally accepted accounting principles requires that management make
certain estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could differ from
those estimates.
NOTE B--INVENTORIES
Inventories consist of the following (in thousands):
June 30 December 31
1996 1995
---- ----
Raw materials $ 2,465 $ 2,013
Work-in-process 5,883 6,089
Finished goods 9,894 10,633
Manufacturing supplies 3,242 3,288
------- -------
21,484 22,023
Less LIFO reserve 4,175 4,928
------- -------
$17,309 $17,095
======= =======
Annually, at the end of each year, management determines inventory levels based
on the taking of a physical inventory. The amount of inventories at June 30,
1996, has been determined based upon inventory levels indicated by perpetual
inventory accounting records. In addition, an actual valuation of inventory
under the LIFO method can be made only at the end of each year based on the
inventory levels and costs at that time. Accordingly, interim LIFO calculations
must necessarily be based on management's estimates of expected year-end
inventory levels and costs. Since these are subject to many forces beyond
management's control, interim results are subject to the final year-end LIFO
inventory valuation.
6
<PAGE>
NOTE C--CREDIT ARRANGEMENTS
The Company entered into a senior financing agreement on December 30, 1986, as
subsequently amended, that provides for revolving credit borrowings and term
loans. The interest rates on its existing revolving credit line and term loans
outstanding vary from the Chemical Bank prime rate or LIBOR plus 1-3/4%; and the
annual revolving credit line commitment fee is 1/8% of the unused balance. The
Company is permitted to convert up to $7 million of its indebtedness to a fixed
interest rate. On February 28, 1996, the Company amended its senior credit
agreement to increase the revolver availability to $15,000,000. The senior
credit agreement may be terminated by the Company or, on or after January 1,
1998 and upon 90 days written notice, by the lender.
Amounts outstanding under the term loan portion of the senior financing
agreement are scheduled to be repaid in remaining quarterly principal
installments totaling as follows: 1996--$2,500,000; 1997--$1,547,050. The
"Capital Expenditure Line" term loan portion of the loan agreement is required
to be repaid in quarterly principal installments of $215,000, with a final
principal payment of $195,000 on October 1, 2001. As of June 30, 1996, the
revolving credit line loan balance was $7,102,000 and the unused borrowing
availability approximated $7,898,000.
The Company's senior lending agreement contains various restrictive covenants,
including that the Company must maintain specified levels of working capital and
net worth (as defined in the agreement). In addition, capital expenditures and
dividends are limited to the annual amounts set forth in the agreement. At June
30, 1996, the Company's retained earnings available for dividends in 1996 was
$4,710,000. As a result of the lending agreement, substantially all of the
Company's property, plant, and equipment, inventory and accounts receivable are
subject to a third party's security interests.
NOTE D--COMMITMENTS AND CONTINGENCIES
The Company is principally self-insured for employees' medical care costs and
workers' compensation claims up to certain specified dollar limits. Under the
medical care program, the Company is insured by a private carrier for individual
claims in excess of specified dollar limits. The Company also has excess
coverage provided by the West Virginia Workers' Compensation Fund (a state
agency) for certain work related injuries. In connection with the self-insured
workers' compensation program, the Company has obtained an irrevocable standby
letter of credit in the amount of $1,000,000 (through July 1996). A liability
has been established for those illnesses and injuries occurring on or before
June 30, 1996, for which an amount of expected loss could be reasonably
estimated.
7
<PAGE>
NOTE E--STOCKHOLDERS' EQUITY
In June 1995, the Company's shareholders approved the Steel of West Virginia,
Inc. 1995 Employee Stock Option Plan and the 1995 Non-Employee Director Stock
Option Plan. Under these Plans, as of June 30, 1996, options to acquire 79,500
shares, exercisable at an option price of $11 5/8, have been granted and are
outstanding. In addition, options to acquire 8,000 shares, at an option price of
$9 a share, have been granted and can be exercised commencing April 1, 1997.
In May 1996, the Company's shareholders voted to approve an amendment to the
Steel of West Virginia, Inc. 1995 Non-Employee Director Stock Option Plan, to
provide for the awarding of shares of the Company's Common Stock in payment of a
portion of the compensation payable to certain outside directors for their
services as directors.
Net income per common share is calculated based on 5,986,923 and 6,060,658
weighted average shares of common stock outstanding during the three months and
six months ended June 30, 1996 and 6,951,693 and 7,021,527 weighted average
shares of common stock outstanding during the three months and six months ended
June 30, 1995. The effect of the Company's stock option plans was anti-dilutive
for all periods presented.
In October 1995, the Financial Accounting Standards Board issued Statement No.
123 "Accounting for Stock-Based Compensation," effective in 1996. As permitted
by this statement, the Company intends to continue its present accounting
practice of recognizing compensation expense related to stock options using the
"intrinsic method." Under this method, compensation expense, if any, is
recognized on the measurement date that both the number of shares the employee
is entitled to receive and the exercise price are known, in an amount equivalent
to the excess of the market value over the exercise price. The Company is
required to provide additional disclosures regarding the stock-based
compensation plans, including pro-forma disclosures of net income and earnings
per share as if the "fair value" method of accounting for stock-based
compensation and been applied, and the Company plans to include these required
disclosures in its 1996 Annual Report.
As of June 30, 1996 the Company has repurchased 1,105,000 shares at a total cost
of $11,483,000.
NOTE F--FIXED ASSET IMPAIRMENT
During the first quarter of 1996, the Company determined that certain
cut-to-length equipment utilized in one of the Company's production lines was
not performing up to expectations and the decision to replace the equipment was
made. Based upon this indication of impairment, the Company recorded a
$1,862,000 charge against operations, included in other operating expense,
equivalent to the net book value of the equipment less its estimated salvage
value. The replacement equipment is expected to reduce the cost of cutting steel
and improve product quality.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Net Sales
Net sales decreased 24.8% in the second quarter of 1996 to $23,797,000 down
$7,844,000 from the second quarter of 1995, primarily as a result of weakness in
certain of the industries that the Company serves, the most significant of which
being the truck trailer industry. The Company does not see any significant
improvement in its market demand in the near term. Finished tonnage sales
decreased to 35,421 tons in the second quarter of 1996 from 45,485 tons for the
second quarter of 1995. Billet sales decreased to 1,189 tons for the second
quarter of 1996 from 2,607 tons in the second quarter of 1995.
Net sales for the six months ended June 30, 1996 decreased 21.8% to $50,444,000
from $64,541,000 for the comparable period in 1995, primarily as a result of
weakness in certain of the industries that the Company serves, the most
significant of which being the truck trailer industry. Finished tonnage sales
decreased to 75,808 tons for the six months ended June 30, 1996 from 90,472 tons
for the comparable period in 1995. Billet sales decreased to 2,334 tons for the
same period in 1996, from 13,014 tons for the comparable period in 1995.
Cost of Sales
Cost of sales increased to 90.0% of net sales or $21,429,000 for the second
quarter of 1996 from 82.3% of net sales or $26,043,000 for the second quarter of
1995. The percent increase in cost of goods sold is principally due to lower
production efficiencies and yields, in addition to fixed costs being a higher
component of costs of goods sold due to lower sales and production levels.
Cost of sales for the six months ended June 30, 1996 increased to 88.6% of net
sales or $44,669,000 from 83.0% of net sales or $53,601,000 for the comparable
period in 1995. This increase in costs of goods sold was principally due to
higher costs for utilities, medical care, warehousing, maintenance and labor,
lower production efficiencies and yields, in addition to fixed costs being a
higher component of costs of goods sold due to lower sales and production
levels.
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses for the second quarter of 1996
were $987,000, as compared to $1,295,000 for the second quarter of 1995. This
decrease was due primarily to lower salaries. As a percentage of net sales,
selling and administrative expense was 4.1% in the second quarter of 1996 and
1995.
Selling, general, and administrative expenses for the six month period ended
June 30, 1996 were $2,155,000, compared to $2,693,000 for the comparable period
in 1995. The expense for the first quarter of 1995 included a $200,000 charge
for costs associated with a discontinued acquisition of another steel company.
As a percentage of net sales, selling and administrative expense was 4.3% in the
six month period ended June 30, 1996, compared to 4.2% for the comparable period
in 1995.
9
<PAGE>
Other Operating Expense (Income)
Other operating expense (income) for the second quarter of 1996 was $103,000 of
income, compared to $192,000 of income for the second quarter of 1995.
Other operating expense (income) for the six months ended June 30, 1996 was
$1,749,000 of expense, compared to $233,000 of income for the comparable period
in 1995. Other operating expense increased primarily due to the recognition of
the estimated loss on the disposal of certain equipment that is being replaced
by new equipment.
Interest Expense
Interest expense for the second quarter of 1996 was $343,000, compared to
$412,000 for the second quarter of 1995. As a percentage of net sales, interest
expense was 1.4% in the second quarter of 1996, compared to 1.3% for the second
quarter of 1995.
Interest expense for the six months ended June 30, 1996 was $708,000, compared
to $798,000 for the comparable period in 1995. As a percentage of net sales,
interest expense was 1.4% in the six month period ended June 30, 1996, compared
to 1.2% for the comparable period in 1995.
Net Income
Net income for the second quarter of 1996 decreased by $1,895,000 to $618,000
from $2,513,000 for the second quarter of 1995. This decrease was principally
due to the reduction in operating income. As a percentage of net sales, net
income was 2.6% for the first quarter of 1996, compared to 7.9% for the second
quarter of 1995.
Net income for the six months ended June 30, 1996 was $631,000, compared to
$4,708,000 for the comparable period in 1995. This decrease was due to the
significant charge to recognize the impairment of certain equipment, higher
operating costs and lower sales. As a percentage of net sales, net income was
1.3% in the six month period ended June 30, 1996, compared to 7.3% for the
comparable period in 1995.
Liquidity and Sources of Capital
The Company's primary ongoing cash needs are for working capital requirements,
debt service and capital expenditures. The three present sources for the
Company's liquidity needs are internally generated funds, a capital expenditure
term loan line, and the Company's revolving credit facility, which the Company
anticipates will be sufficient for its ongoing cash needs. Working capital at
the end of the second quarter of 1996 was $16,250,000, compared to $15,514,000
at the end of the prior fiscal year. This increase in working capital was due
primarily to working capital provided by operations. The Company's expenditures
for required capital replacements are currently anticipated to average
approximately $1,000,000 annually over the next several years. In addition, from
time to time, the Company evaluates discretionary capital expenditures and
acquisition opportunities. Engineering studies are underway in connection with
the Company moving forward with phase II of the modernization and expansion
program that was started in late 1993. The phase II project is expected to
include new rolling stands, a reheat furnace, and miscellaneous equipment
enhancements. Any such expenditure would be subject to availability of funds and
approval by the Company's Board of Directors.
10
<PAGE>
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
At the Annual Meeting of Stockholders held on May 23, 1996, for which proxies
for the meeting were solicited pursuant to Regulation 14A of the Securities
Exchange Act of 1934, the stockholders elected five directors, each for a term
of one year. The tabulation of the votes cast for each nominee for director was
as follows:
Name of Nominee Voted For
- --------------- ---------
Stephen A. Albert 5,197,229
Robert L. Bunting, Jr. 5,199,529
Albert W. Eastburn 5,196,429
Daniel N. Pickens 5,198,879
Paul E. Thompson 5,194,329
At the Annual Meeting of Stockholders, the stockholders also approved the
following:
(i) an Amendment to the Steel of West Virginia, Inc. 1995 Non-Employee Director
Stock Option Plan, to provide for the awarding of shares of the Company's
Common Stock in payment of a portion of the compensation payable to certain
outside directors for their services as directors, by a vote of 4,834,751
shares in favor, 60,157 shares against and 315,171 shares abstained; and
(ii) the appointment of Ernst & Young as independent auditors, by a vote of
5,208,705 shares in favor, 824 shares against and 550 shares abstained.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.25 Collective Bargaining Agreement, dated June 10, 1996,
between SWVA and the United Steelworkers of America,
AFL-CIO.
11.1 Computation of Earnings Per Share Data.
(b) Reports on Form 8-K
None
11
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.
DATED: August 6, 1996 STEEL OF WEST VIRGINIA, INC.
------------------------------
(Registrant)
/s/ Timothy R. Duke
------------------------------
Timothy R. Duke, Vice President,
Treasurer and Chief Financial
Officer
12
COLLECTIVE BARGAINING AGREEMENT
This Agreement, made and entered into (to become effective 12:01 am) June
10, 1996, is between SWVA, Inc., or its successor, at its plant at 17th Street
and Second Avenue in Huntington, West Virginia (hereinafter referred to as
"Steel") and the United Steelworkers of America, AFL-CIO, (hereinafter referred
to as "Steelworkers").
Section 1 - INTENT AND PURPOSE
1-A Relationship between the parties
1. It is the intent and purpose of the parties hereto that this
Agreement shall promote and improve industrial and economic
relationships between Steel and Steelworkers and to set forth herein
the Agreement covering rates of pay, hours of work and conditions of
employment to be observed between the parties hereto.
1-B Anti-discrimination
1. There shall be no discrimination, restraint or coercion against any
member because of membership in the Union, Union Activity, Race,
Creed, Color, Sex, National Origin, Religion, Age or Handicap.
2. The parties agree to comply with the Federal "ADA Law".
1-C Definition of employee
1. The term "employee" as used in this Agreement will
include all production and maintenance workers of Steel
at its Huntington plant located at 17th Street and Second
Avenue in Huntington, West Virginia. Positions herein
excluded from the Bargaining Unit include stenographers,
secretaries, receptionists, PBX operators, messengers,
porters, clerks (cost, inventory, stores, production,
payroll, sales, accounting and billing personnel),
weighmaster, draftsmen, guards, watchmen, foremen,
supervisors, superintendents, all personnel who are on
the semi-monthly payroll of Steel, and all other
employees agreed to by Steel and the Steelworkers.
1
<PAGE>
1-D Supervisor working
1. Steel's management employees will not perform work normally
performed by the Bargaining Unit for the purpose of avoiding
overtime nor to replace employees that have been reassigned to other
duties on a daily basis.
1-E Contracting out
1. Steel shall not have any production work performed by non-Bargaining
Unit employees that is normally performed by the Bargaining Unit as
long as current employees are willing to work the overtime and
equipment time is available.
2. Steel will not contract-out work normally performed by Bargaining
Unit maintenance employees for the purpose of avoiding overtime or
during any period of lay-off as long as those employees laid-off
have the ability to perform the work in question (excluding any
laid-off probationary employees).
Section 2 - MANAGEMENT
2-A Management Rights
1. The Union and its members recognize the right to manage
the plant and works, and to direct the working forces, is
vested exclusively in the Company. Among these rights
are the right to hire, suspend, discharge for just cause,
promote, demote, transfer, assign jobs, increase forces
and decrease forces, provided this Section will not be
used for purpose of discrimination against any employee
or in violation of any of the other provisions of this
Agreement.
Section 3 - RECOGNITION
3-A U.S.W.A
1. Steel recognizes the Steelworkers as the exclusive representative of
all the employees of Steel, as defined in Section 1-C.1 hereof, for
the purpose of collective bargaining in respect to rates of pay,
wages, hours of work and other conditions of employment.
2
<PAGE>
3-B Committees
1. Steel will recognize the Local Union's Grievance, Safety,
Retirement, Insurance, Worker's Compensation, Contracting Out,
Labor/Management, Civil Rights and Negotiating as committees.
2. Steel will count lost scheduled straight time hours as time worked
during Joint/Committee meetings for the following committees only:
Safety, Labor/Management and Retirement committees. Steel will
extend the same application to the Chairman of the Union's Blood
Bank.
3-C Membership
1. Steel agrees that membership in the Steelworkers shall hereafter be
a condition of employment in accordance with the provisions which
follow in paragraphs D-1 & 2, E-1 & 2, F-1.
3-D Probationary employees
1. All new employees who are hired by Steel will become Steelworker
members after a probationary period of 1050 hours of actual
performance of work.
2. A probation period is provided to determine if a new employee will
become an effective team member in the work force of Steel. At the
end of each 350 hours worked, during the probationary period, the
employee will either receive a salary increase as provided in
Section 8-A.7 or be terminated, all entirely at the discretion of
Steel.
3-E Authorization cards
1. The Union shall indemnify and save Steel harmless against any and
all claims, demands, suits, or other forms of liability that shall
arise out of or by reason of action taken by Steel in reliance upon
the Union Dues Deduction Authorization Cards including deducting
"Union Dues from probationary employees".
3
<PAGE>
2. It is further agreed that during the life of this Agreement, all
members of the Steelworkers shall authorize Steel to check off their
union dues, initiation fees and assessments, each as designated by
the Secretary/Treasurer of the International Union. Steel agrees to
check off such authorized dues, initiation fees and assessments and
to forward them to the Secretary/Treasurer of the International
Union.
3-F Membership
1. Should the Steelworkers determine for any reason that an employee
loses his membership in good standing with them which would require
termination of the employee from Steel, the Steelworkers will hold
Steel harmless from any action taken by that employee against Steel.
Section 4 - RESPONSIBILITIES OF THE PARTIES
4-A Plant rules
1. Steel and Steelworkers recognize and agree that basic and
fundamental rules are required to govern the interaction
between the parties, individuals and groups of
individuals of Steelworkers and Steel. The parties
further agree that these rules, stated in Section 19,
will be followed by all employees and individuals hired
by Steel. Supervisors will endeavor to call an
employee's attention to violations of the rules and give
reasonable assistance in obtaining compliance.
(a) No plant rule can be changed without the mutual joint consent
of the parties.
Section 5 - SAFETY
5-A Safety procedures
1. Steel shall provide a safe place to work by eliminating
hazardous conditions, maintaining protective guards on
machinery and requiring employees to wear protective
equipment needed on the job. However, it is recognized
that the only way to be certain to maintain accident free
performance is for each employee to accept a personal
responsibility to work safely. Employees will be
familiarized about safety precautions and operating
fundamentals of equipment they are assigned to operate.
4
<PAGE>
2. The parties agree the Joint Safety Committee will conduct monthly
plant tour safety inspections (or more frequently if necessary) and
report its finding to the President of Steel or his representative.
3. No employee shall be required to perform work that in their opinion
is unsafe and no disciplinary action will result due to the refusal
to perform such work.
4. The U.S.W.A. may perform "dust checks" and "air quality checks" at
their convenience and at their expense at any time with access to
the plant.
Section 6 - HOURS OF WORK
6-A Work week
1. Steel intends to conduct its operations on the basis of a 40-hour
week and guarantees 40 hours pay in a workweek if an employee works
one full workday as scheduled by the Company in that week. Some
schedules and demands of the business will require employees to work
in excess of eight (8) hours in a day.
2. The work week will be from Monday through Sunday.
3. Schedules showing employees' workdays will be posted by noon
Thursday for the following workweek, including any known overtime
days.
4. Employees will not be scheduled to perform extra or make up work
because of absence for any reason. However, this subSection is not
to be construed to prohibit employees from requesting available work
to complete their 40 hour schedule, nor to prevent Steel from
scheduling employees for weekend work in the normal manner.
6-B Reporting pay
1. Employees who are scheduled to report to work, and who do report,
will be paid four (4) hours reporting pay if they are instructed to
return home and not assigned to work that day.
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6-C Overtime/pay
1. Steel has a right to require a reasonable amount of overtime in
excess of 40 hours in any workweek. Time and one-half will be paid
for any hours worked in excess of 40 in a workweek.
6-D Excessive hours
1. Steel shall not require or allow an employee to work in excess of
sixteen (16) hours in a twenty-four (24) hour period. Steel shall
not require an employee to work in excess of fifty-six (56) hours in
a work week.
6-E Holidays
1. The following are holidays:
New Year's Day
Good Friday
Memorial Day
July 4th
Labor Day
December 24
Christmas Day
Employee's Birthday (The day following, if birthday
coincides with other specified holidays.)
2. All hours actually worked on holidays listed above will be paid at
the rate of time and one-half (1-1/2) the regular rate of pay, in
addition to the weekly wage.
3. Holiday pay, as defined above, will be paid only to employees on the
active payroll. Active payroll shall mean those persons currently
regularly scheduled to work. It does not include those on lay-off,
on leave of absence for any reason, or not working on a regular
basis.
Section 7 - SENIORITY, OVERTIME, LAYOFFS AND RECALL
7-A Voluntary quit
1. Any Bargaining Unit employee who voluntarily quits the Bargaining
Unit for any reason, will lose all length of continuous service
accumulated. If reinstated or rehired, he shall be placed at the
bottom of the seniority list.
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7-B Groups
1. Groups are defined in Section 20 attached hereto.
7-C Schedules/Drop days
1. Employees will be given preference by seniority in selecting their
schedules and/or drop days/scheduled days off on their assigned
shift provided the employees are qualified to perform the work in
question.
7-D Daily overtime
1. When daily overtime occurs the senior qualified employee from the
preceding shift will be offered the work.
7-E Call out
1. If it becomes necessary to call an employee to come to work, or for
scheduling a 6th or 7th day then the senior qualified employee will
be offered the work.
7-F Lay-off
1. In the event Steel should decide that a reduction in force is
required, the least senior employee in plant seniority will be laid
off. Lay-offs in the Trade and Crafts (Rate Class 1) will be by
seniority in the trade or craft affected. However, it is understood
and agreed between the parties that it may be necessary to retain
Trade and Craft (Rate Class 1) employees on an out-of- line
seniority basis due to qualifications. Further, for the purpose of
preserving continuity of administration of the provisions of this
Agreement, the Officers of the Local Union; President, Vice
President and Grievance Persons shall not be laid off in any group
regardless as to whether or not their seniority is greater than the
employee replaced.
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7-G Recall
1. Recall to work from lay-off will be by seniority excluding
probationary employees. However, the parties agree to out-of-line
recall for Trade and Craft (Rate Class 1) employees relative to
seniority in the trade or craft affected. In the event of a lay-off
or reduction of a group the employees affected will have recall
rights back to their bid-in group. If there are no vacancies in
their group then they have the right to a temporary reassignment to
the other groups by seniority. Recall rights to active payroll will
be maintained on an unlimited basis. However, it is understood, if a
laid- off employee is provided a recall opportunity and declines, he
or she is considered to have "QUIT" and employment status is
terminated.
2. It is the responsibility of all employees to provide the Personnel
Department with a current address and telephone number where they
can be contacted. Steel will not be responsible for failure of the
employee to provide this information if a junior employee is
recalled as a result.
3. If the attempt to recall is not successful due to Steel's inability
to make contact with the effected employee but the employee makes
contact with Steel during that week, then the employee will be
scheduled for work in the following week.
7-H Permanent vacancy
1. When an opening occurs within a defined Group, the employees
currently assigned to that Group will be permitted to exercise
seniority to move to the shift where the opening exists, provided
they are qualified to perform the work available on that shift. The
remaining openings will be posted plant wide for five (5)
consecutive days. Permanent Openings will be posted at all bath
houses and where work schedules are posted. Awarded Openings will be
posted in the same manner. All Openings will show the Group; primary
area for production workers or primary expertise required for Trade
and Craft workers; rate of pay; and shift. However, it is clearly
understood that permanent Openings may only occur within a Group as
defined in Section 20.
(a) If the Opening pertains to a production Group then the senior
qualified employee indicating his desire will be awarded the
Opening.
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(b) If the Opening pertains to a Trade and Craft position then the
best qualified applicant will be selected to fill the Opening.
7-I Shift selection
1. Employees will be allowed to select a shift by seniority, when an
opportunity or vacancy occurs for a change in shift assignment,
providing the employee has the ability to perform the work.
7-J Group Leader
1. If Steel determines that one or more Group Leaders are needed on any
shift for any length of time within one or more Group's then the
following will apply:
2. The Group Leader will be determined by canvassing or posting a
notice within the affected Group. The senior employee indicating
their desire to be a Group Leader will be provided a period of sixty
(60) working days to familiarize with the position and to
demonstrate they possess the talent, knowledge and desire to
satisfactorily perform the tasks and duties assigned to them.
(a) If no employee within the affected Group desires the Group
Leader position, then Steel may select any other Group to
canvass or post a notice using the same criteria, etc.
3. The employee accepting the Group Leader position will be expected to
make decisions, effectively communicate, assign and reassign work
tasks and be a responsible Leader of all employees under his
direction. He will perform all tasks assigned, including duties
normally performed by supervision except the Group Leader cannot
hire, terminate or issue warnings pertaining to any disciplinary
procedure.
4. Steel retains the right to determine if an employee is sufficiently
effective to remain in the Group Leader position at any time after
the sixty (60) working days familiarization period. Upon Steel's
decision to remove a Group Leader, a full explanation will be given
the affected employee.
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Section 8 - RATE CLASSIFICATIONS AND WAGES
8-A Wages
Effective Monday June 10 of 1996:
1. All employees classified as Trade and Craft (Rate Class 1) will
receive $15.00 per hour base rate and their straight time weekly
base rate will be $600.00.
2. All employees classified as skilled productions workers (Rate Class
2) will receive $14.50 per hour base rate and their straight time
weekly base rate will be $580.00.
3. All employees classified as production workers (Rate Class 3) will
receive $13.50 per hour base rate and their straight time weekly
base rate will be $540.00.
4. Effective the first Monday in June 1997, all base rates will
increase by $.40 per hour and their straight time weekly base rate
will increase by $16.00.
5. Effective the first Monday in June 1998, all base rates will
increase by $.40 per hour and their straight time weekly base rate
will increase by $16.00.
6. "Group Leaders" will receive $2.00 per hour greater than their base
rate.
7. A probationary employee starts at $3.00 an hour below the base rate
and progresses in $1.00 an hour increments every 350 hours of actual
work performed until he or she reaches the base rate. In the event
he or she does not get the next rate, he or she is terminated.
(a) Supervisors may increase probationary employees rate of pay
any time during the probationary period, not to exceed
non-probationary rates.
8-B Brick Masons/Scrap-prep
1. The Brick Masons are included as Trade and Craft (Rate Class 1) and
will remain in the Melt/Cast Group for all purposes including
overtime. The Scrap/Prep Group is included in the Melt/Cast Group.
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Section 9 - BENEFITS
9-A Vacations
1. The vacation year will be the calendar year January 1 through
December 31. All employees will be eligible for four (4) weeks
vacation in any vacation year after completing 1,040 hours of work
prior to taking a vacation.
2. Two (2) vacation weeks will be scheduled during plant close down or
at other times, depending on the needs of the business.
3. All employees will be scheduled off for one week of vacation for the
week in which Thanksgiving Day falls. Any work performed during this
week will be on a voluntary basis.
4. All employees will be allowed to have one floating week of vacation
to be scheduled at any time during the calendar year without regard
to the 1040 hour requirement providing that a written request is
made fourteen (14) days prior to the start of such vacation and as
long as it is reasonable to conclude that the eligibility
requirements of 1040 hours will be obtained.
9-B Holiday during vacation
1. It is agreed if a holiday falls during a vacation week, employees
will receive 8 hours straight time pay in addition to the weekly
wage.
9-C Health Care
1. Steel will continue the employees "HEALTH INSURANCE PLAN".
9-D Dental & Vision
1. During the term of the Agreement, Steel's only responsibility is to
pay a premium directly to Delta Dental insurance company or make a
direct contribution to a "Voluntary Employees' Beneficiary
Association" (V.E.B.A.) Trust (at Steel's discretion) for the
specific purpose of paying a premium to Delta Dental insurance
company for a Dental/Vision Insurance Plan for active Bargaining
Unit Employees.
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2. It is expressly agreed and understood by and between the parties
that Steel's sole obligation under this Section is to pay a premium
that does not exceed the amount set forth in paragraph D.3 of this
Section, and that Steel is under no obligation to provide a defined
contribution Dental/Vision Benefit Plan or to provide any
Dental/Vision benefit. Steel is not responsible for administration
or claims dispute resolution with respect to benefits under the
Delta Dental's Dental/Vision Insurance Plan.
3. Effective June 10, 1996, Steel shall pay a premium not to exceed
$12.20 (which shall be allocated as follows: $9.65 for dental
coverage + $2.55 for vision coverage) monthly for each employee and
$31.80 (which shall be allocated as follows: $23.00 for dental
coverage + $8.80 for vision coverage) monthly for each employee and
his family.
4. This sum shall be payable only during the term of this Agreement.
9-E Retiree Medical Premium Reimbursement Plan
1. Effective June 7, 1993, or as soon as possible thereafter, Steel
shall establish a "Voluntary Employees' Beneficiary Association"
(V.E.B.A.) Trust entitled "Retiree Medical Premium Reimbursement
Plan" (the "Plan") and shall contribute the sum of $200,000 per
annum for the sole purpose of reimbursing employees who resign their
employment due to retirement and who meet the eligibility criteria
described in paragraph E.9 of this Section for insurance premiums
paid by such employees to purchase medical coverage.
(a) A "Special Rule Retiree" Amendment has been added to the
"Plan".
2. Such sum shall be payable in a lump sum to the V.E.B.A. Trust
established by Steel and administered by the parties who serve on
the "Joint Retirement Plan Committee," which shall be known as the
"V.E.B.A. Committee."
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3. The first such payment shall be made within thirty (30) days after
the effective date, or as soon as possible thereafter, and on each
anniversary date thereafter for the term of this Agreement;
provided, however, that such sum shall be payable only so long as
this Agreement is in effect, i.e., the term of the Agreement or
earlier, as provided in Section 13-B of this Agreement or as
modified pursuant to paragraph E.5 below.
4. (a) the sum of $200,000 per annum is approximately equivalent to
$500 per month per employee who is or becomes eligible under the
criteria described in Paragraph E.9 of this Section. In no event,
however, shall Steel be liable for any contribution in excess of
$200,000 per annum, even though the number of employees covered by
this Section may change subsequent to the effective date of this
Agreement.
(b) Payments made from the "Plan" may only be used by the
participant to purchase medical coverage for the participant and if
elected by the participant, his spouse/or any eligible dependent
children (provided that such spouse or children are not eligible to
receive any benefit or coverage under Title XVIII of the Social
Security Act (Medicare)) under any medical plan other than a plan
maintained by Steel. The "Plan" shall reimburse participants'
premiums for medical coverage in an amount which shall be limited to
the lesser of (1) $700 per month per participant or (2) the actual
amount of monthly premiums billed to and paid by the participant for
medical coverage. Notwithstanding the foregoing, in no event shall
the total amount payable to participants under the Plan (whether for
coverage for participants, spouses or dependent children) exceed the
amount of contributions that Steel is required to pay to the "Plan"
under paragraphs E.1 and E.4(a) of this Section.
5. During the annual "VEBA" Opener as provided in Section 13-B of this
Agreement, the parties may seek and agree to make any changes or
modifications to this Section.
(a) Changes or modifications also includes decisions about
distribution of the annual contribution remaining after offset
relative to the "Special Rule Retiree" Amendment.
6. The "Plan" and the assets thereunder shall be held and administered
under the terms and provisions of the Trust Agreement between Steel
and its designated trustee(s), any plan document adopted by Steel
and any amendments thereto.
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7. The parties intend that the "Plan" qualify for exemption from
federal income tax under Section 501(a) of the Internal Revenue Code
of 1986, as amended (the "Code"), as a Voluntary Employees'
Beneficiary Association pursuant to Section 501(c)(9) of the Code.
8. All disputes under the "Plan" shall be governed by the ERISA claims
procedure as provided in U.S. Department of Labor Reg. ss.
2560.503-1.
9. Eligibility Criteria
Eligibility: A retired employee of Steel shall be eligible to
participate in the "Plan" as a participant only if he satisfies all
of the following requirements:
(a) Employee voluntarily resigns employment status
with Steel on or after age sixty (60);
(b) Employee is not eligible to receive any benefit or
coverage under Title XVIII of the Social Security Act
(Medicare); and
(c) Employee has attained at least age sixty (60).
10. Termination of Participation: A retired employee's participation in
the "Plan" Terminates if:
(a) Employee no longer satisfies any one of the
eligibility requirements listed above;
(b) Employee elects to cease participation in the
"Plan";
(c) Employee fails to provide any of the forms,
certifications or other documentation required by the
"Plan" Administrator;
(d) Employee fails to timely pay his premium to the
insurance carrier providing medical coverage; or
(e) The "Plan" is terminated.
11. Notwithstanding anything contained herein to the contrary, any
coverage purchased under the "Plan" by an eligible employee shall be
secondary to all other plans under which the employee is eligible to
participate or that are otherwise available to the employee.
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9-F Profit Sharing
1. Steel agrees to have a Profit Sharing Plan. Seventeen percent (17%)
of the pre-tax profits will be divided equally by all Bargaining
Unit employees and will continue the current calculation of the
amount due the Bargaining Unit. The Profit Sharing Plan will provide
funding for the Pension Plan at paragraph G and bonus. Two
semi-annual share payments will be made. The first installment will
be payable no later than the last pay period in June and the second
installment no later than the last pay period in November.
9-G Retirement Plan
1. Steel agrees to continue the Collective Bargaining Unit Retirement
Plan which will be funded out of the Profit Share Amount. Steel
shall contribute to the Retirement Plan on a semi-annual basis
$125.00 for each eligible employee for each eligible month, however,
if the Profit Share Amount calculated by Steel is less than the
aggregate total of all eligible months at $125.00, then Steel will
contribute to the Retirement Plan such lessor Profit Share Amount
prorated to each employee based upon eligible months worked.
2. A 401-k Plan will be continued for the Bargaining Unit employees of
Steel.
3. The Retirement Plan includes a hardship provision which allows an
employee to make a withdrawal on the employer's contribution as
defined by applicable Federal Law.
9-H Boot allowance
1. All employees will receive an annual $100 work boot allowance. This
allowance will be paid once annually to current active and laid-off
employees at the time the annual allowance is paid.
2. The annual boot allowance will be paid on the payroll for the period
ending the first full week in August during each year of this
Agreement.
Section 10 - GRIEVANCE PROCEDURE
10-A Dispute resolution
1. Should any difference arise as to the meaning and application to
this Agreement, the following procedure will be used to settle such
difference.
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2. The parties have agreed to utilize a new form entitled "Record of
Request or Complaint Proceedings." This document is to be utilized
to record facts and information that is relevant and necessary for
both parties to effectively resolve issues or complaints that
may arise.
3. This form must be signed and dated by each and every effected
employee(s) who desires to use the "Grievance Procedure." The
Grievance Committeeman will present this form to Supervision at the
First Step level. The Committeeman and Supervision well indicate
their comments and sign and date the form.
4. If the issue is not resolved during this First or Second oral
Step(s) then the form(s) must accompany the normal written
"Grievance Report" document at the time it is presented to be
numbered and received into the Third (3) Step of the Procedure.
5. This form is established and intended to be "NON-PRECEDENT",
including any resolution therefrom, and will not be used by either
party for any legal or grievance purpose at any time. It is created
as an internal record to assist the parties with grievance
resolution by recording factual information needed to accomplish
that goal.
10-B STEP ONE:
1. An employee will have the right to request a meeting with his
Supervisor and Grievance Person, within twenty-four (24) hours of
the occurrence or discovery of the alleged violation, who will
schedule such meeting to take place within ten (10) hours after the
end of the next scheduled workday after the request is made.
10-C STEP TWO:
1. If the employee is not satisfied as a result of the First Step
Meeting, then the employee will be granted a meeting with the
Steelworkers Grievance Person, the Superintendent and the Employee's
Supervisor. This meeting will take place within three (3) workdays
from conclusion of the above mentioned First Step Meeting.
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10-D Written Grievance
1. If the Union believes the grievance still exists, it shall be
reduced to writing on proper grievance forms and presented to the
Industrial Relations Director of Steel within three (3) days from
conclusion of the above mentioned Second Step Meeting.
10-E STEP THREE:
1. Providing no satisfactory Agreement is reached in Step Two, a
meeting will be arranged within thirty (30) days between the
Industrial Relations Director of Steel and the Staff Representative
of the Union. Steel's decision will be submitted to the Union Staff
Representative in writing within ten (10) working days of the
meeting.
10-F STEP FOUR/ARBITRATION:
1. If the Union Staff Representative does not accept Steel's Industrial
Relations Director's answer to the grievance as a satisfactory
settlement, then the Staff Representative will notify the Industrial
Relations Director within ten (10) days of the postmark on the
envelope in which contained the Third Step Answer.
2. Each party will provide the other with a list of three (3)
Arbitrators, in an attempt to mutually agree on the Arbitrator to
hear the case. If the parties fail to agree on an Arbitrator, they
may jointly or separately petition the Federal Mediation Service to
submit a panel from which an Arbitrator will be selected by the
parties either by mutually agreeing or by alternately striking names
from the list, with the last remaining name being the Arbitrator to
hear the case.
3. The decision of the Arbitrator will be final and binding on matters
properly before him and he shall render his decision within thirty
(30) days of the close of the arbitration hearing unless otherwise
agreed on by Steel and Steelworkers. Steel and Steelworkers agree to
share equally the cost and expenses of the Arbitrator, but fees and
expenses, if any, of representatives and witnesses shall be borne by
the party engaging or calling the same.
10-G Grievance Person
1. For purposes of this Section, a Grievance Person will be an employee
of Steel selected by the Steelworkers. The Local union may appoint
not less than three (3) and not more than five (5) Grievance
Committeemen.
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10-H Time Limits
1. All periods herein not specified as calendar days shall exclude
weekends and holidays. Time limits may be extended by mutual
Agreement between the Union and Steel.
10-I Out-of-Line Exception
1. The parties agree to make an out-of-line exception for discharge
grievances, if after ninety (90) days from date of discharge, no
resolution has occurred. The next Arbitrator selected at that point
will be for the out-of-line discharge case.
Section 11 - NO STRIKE - NO LOCK-OUT
11-A No strike
1. Steelworkers agree there shall be no strikes, work stoppages or slow
downs during the life of this Agreement or any extension thereof.
11-B No Lock-out
1. Steel will not lock-out any employee during the terms of this
Agreement.
11-C Remedy for Violation
1. Steel shall have the right to discipline up to and including
discharge any employee who violates paragraph A. Any disciplinary
action meted out or imposed by Steel hereunder shall be subject to
the grievance or arbitration procedure of this Agreement, including
arbitration to the extent only of determining the fact as to whether
an employee violated paragraph A. A grievance against disciplinary
action taken by Steel hereunder must be filed in writing with Steel
within forty-eight (48) hours after such discipline is imposed.
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2. The parties further agree that in the event of an alleged violation
of paragraph A above, Steel (in addition to seeking any other legal,
equitable, administrative, judicial or contract remedies available
to it) may if it desires immediately submit the issue arising
therefrom to an Arbitrator to be furnished and chosen by Steel's
Attorney and the Union from the Huntington area to constitute the
arbitration panel and the third member appointed by mutual agreement
of the parties. The arbitration hearing shall be conducted within
twenty-four (24) hours (or as soon thereafter as is possible) after
the occurrence of the alleged violation. If a majority of the
arbitration panel finds that the Agreement has been violated, the
arbitration panel shall order that the party or parties in violation
cease and desist from such conduct and said order shall issue at the
conclusion of the arbitration hearing.
Section 12 - LETTERS OF AGREEMENTS
12-A Letters
The following letters of agreement are to be incorporated and made
part of this working Agreement for its term:
1. Any former Connor's salaried employees will not be regarded as
Bargaining Unit employees, shall be excluded from the unit and shall
perform Bargaining Unit work, but will not be eligible for promotion
to or to fill job vacancies within the unit. This situation as to
these employees will apply as long as they occupy their assigned
jobs and will not cease until they are promoted to supervisory
position or their employment is terminated.
2. Steel will provide the union with written communications when it
pertains to the hiring, lay-off, recall, termination or promotions
to a non-Bargaining Unit position of a Bargaining Unit employee.
3. All current employees seniority has been ranked in accordance with
their I.D. Number. Employees I.D. Numbers have been established,
agreed to by the parties and made part of the Agreement, and shall
be known and referred to as the "Employees Seniority List." This
seniority list cannot be changed unless mutually agreed to by the
parties or as a result of a grievance or arbitration settlement.
(a) This list is to be used for seniority purposes only and will
have no bearing on Steel's accounting records.
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4. Any disciplinary action procedures taken against all current active
employees prior to June 07, 1993, will not be held or raised against
them in any future disciplinary action or procedure.
5. The parties agree to the contents of their joint letter dated
6/17/88, pertaining to the Melt Shop "Onerous scheduling" Agreement.
The only change is the $1.00 an hour additive to a $1.00 an hour
base rate change during the time that rate is being paid.
6. The parties agree to incorporate the "Joint Agreement Letter"
including attachment (New form) pertaining to a new grievance form
signed 12/21/95. See a synopsis of Agreement at Section 10-A.2
through 5.
Section 13 - TERMINATION DATES
13-A Length of Agreement
1. This Agreement dated June 10, 1996, shall supersede that Agreement
between the parties made and entered into June 07, 1993 which
expired, by joint Agreement, at midnight on June 09, 1996. This
Agreement shall continue in full force and effect until June 04,
1999, at 4:00 pm, inclusive, and thereafter it shall be considered
automatically renewed for successive periods of twelve (12) months
unless at least sixty (60) days prior to the end of the expiration
date or any twelve (12) month effective period either party shall
serve written notice upon the other that it desires cancellation,
revision or modification of any provision or provisions of this
Agreement. In the event, the parties shall attempt to reach an
agreement with respect to the proposed change or changes, and at
least forty-five (45) days prior to the expiration date of the
Agreement, meetings to consider such changes shall be held by the
parties. In the event the parties do not reach a written agreement
by the expiration date in the particular year, as provided for
herein, then this Agreement shall in all respects be deemed void and
terminated. The parties hereto by written agreement may extend said
period for the purpose of reaching a new Agreement.
2. The U.S.W.A. will not strike and Steel will not Lockout during the
term of this Agreement or any extension thereof.
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13-B VEBA
1. The parties agree to an annual "VEBA" Opener during the second and
third year of this Agreement. The purpose of the opener is for the
parties to make decisions pertaining to the VEBA contribution
(however, in no event will the total contribution exceed the "VEBA"
limitations described in Section 9-E) or, in the alternative, a
Special non-VEBA employee distribution.
(a) After the "Special Rule Retiree" offset has been determined,
the 1996 VEBA contribution alternatively will be paid as a
one-time bonus.
Section 14 - LIGHT DUTY
14-A Light Duty Assignment
1. Any employee who becomes incapacitated may be assigned the duties or
modified duties of any position that he or she can perform within
the restrictions that has been placed upon him or her by the Medical
Community. If Steel should elect, at their expense, to have an
employee evaluated to determine the extent of injury or illness,
and/or to determine what restrictions if any may apply, a specialist
within the field associated with the medical problem will be
utilized where applicable.
2. Also, it must be noted that an employee can be assigned on certain
excluded positions, such as: telephone operator, messenger, guards,
watchmen and etc. while employee is incapacitated on light duty.
Section 15 - LABOR/MANAGEMENT
15-A The parties agree to establish a joint Labor/Management Committee for the
purpose of discussing and resolving issues brought before it by any member
of the committee. It is agreed that Steel's Plant Manager and the U.S.W.A.
District #8's Director are members of the joint committee.
15-B It is understood that the committee may not make decisions or resolutions
contrary to specific contract language unless it is reduced to writing and
signed by the appropriate Steel and U.S.W.A. Representatives.
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Section 16 - EDUCATION AND/OR TRAINING PROGRAMS
16-A Training program
1. It is Steel's intent and desire, and hereby obligates itself, to
develop and implement a training program for employees so they can
increase their knowledge, ability and expertise to enhance their
performance of duties within their assigned group.
16-B Education
1. Steel will pay for preauthorized job related training/education that
supports an employees performance in his work related duties.
16-C Scholarship Program
1. Steel's current "Scholarship Program" for active employees' eligible
dependent children will include Bargaining Unit employees.
2. The "Scholarship Program" will have no effect on Steel's Profit
Sharing Plan.
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Section 17 - UNION SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
by their duly authorized Representatives on the 10th day of June 1996.
SIGNATURE PAGE
FOR
UNITED STEELWORKERS OF AMERICA
INTERNATIONAL UNION:
- ---------------------------- --------------------------------
George F. Becker - President Leo Gerard - Secretary/Treasurer
- ---------------------------- --------------------------------
Leon Lynch - VP Human Affairs Richard Davis - VP Admin.
- ---------------------------- -------------------------------
David Wilson Joe C. Chapman,
Director, Dist. #8 Sub-Distict Director
/s/ Emmanuel S. Mason,
- ----------------------------
Emmanuel S. Mason,
Staff Representative
LOCAL UNION NO. #37
/s/ Glen Bias /s/ Scott Ramey
- ---------------------------- --------------------------------
Glen Bias - President Scott Ramey - Committee Chair.
/s/ Nick Beever /s/ David Collins
- ---------------------------- -------------------------------
Nick Beever - Committeeman David Collins - Committeeman
/s/ Gregory Chinn /s/ Dale Davis
- ---------------------------- --------------------------------
Gregory Chinn - Committeeman Dale Davis - Committeeman
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Section 18 - STEEL SIGNATURES
SIGNATURE PAGE
FOR
STEEL OF WEST VIRGINIA, INC.
/s/ Larry E. Gue June 10, 1996
-----------------
Larry E. Gue, V. P. Human Affairs
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Section 19
A. Plant Rules
1. Report for work physically and mentally capable of performing the
job.
2. Report to work regularly and on time for your assigned work
schedule.
3. Follow the assignments and directions of your supervisor and perform
your share of the team's work in an acceptable and cooperative
manner.
4. Treat all equipment, tools and plant facilities used in a careful
and proper manner.
5. Respect the rights of others, be truthful and treat fellow employees
and all visitors with human dignity.
6. Obey all safety rules and wear or use proper safety apparel and
devices.
Section 20
A. Groups
1. Melt/Cast Group
2. #1 Mill/Finish Group
3. #2 Mill/Finish Group
4. Fabricating Group
5. Maintenance/Machine Shop Group
6. Roll Turning Group
25
Exhibit - 11.1
Computation of Earnings Per Share Data
The following formulas were used to calculate the earnings per share data
shown in the Consolidated Statements of Income and Retained Earnings for the
three months and six months ended June 30, 1996 and June 30, 1995 included in
this Report.
Calculation
Three Months Ended
- ------------------
June 30, 1996 Net Income Net Income = $ 618,000 = $ .10
per common ----------------------- ----------
share Weighted average shares 5,986,923
of Common Stock for the
period
June 30, 1995 Net Income Net Income = $2,513,000 = $ .36
per common ----------------------- ----------
share Weighted average shares 6,951,693
of Common Stock for the
period
Six Months Ended
- ----------------
June 30, 1996 Net Income Net Income = $ 631,000 = $ .10
per common ----------------------- ----------
share Weighted average shares 6,060,658
of Common Stock for the
period
June 30, 1995 Net Income Net Income = $4,708,000 = $ .67
per common ----------------------- ----------
share Weighted average shares 7,021,527
of Common Stock for the
period
For purposes of calculating earnings per share, there were 5,986,923 and
6,060,658 weighted average shares of common stock outstanding during the three
months and six months ended June 30, 1996 and 6,951,693 and 7,021,527 weighted
average shares of common stock outstanding during the three months and six
months ended June 30, 1995. The effect of the Company's stock option plans was
anti-dilutive for all periods presented.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 100
<SECURITIES> 0
<RECEIVABLES> 10,379
<ALLOWANCES> 661
<INVENTORY> 17,309
<CURRENT-ASSETS> 31,074
<PP&E> 66,003
<DEPRECIATION> (29,112)
<TOTAL-ASSETS> 87,382
<CURRENT-LIABILITIES> 14,824
<BONDS> 11,215
0
0
<COMMON> 71
<OTHER-SE> 52,476
<TOTAL-LIABILITY-AND-EQUITY> 87,382
<SALES> 23,797
<TOTAL-REVENUES> 23,797
<CGS> 21,429
<TOTAL-COSTS> 21,429
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 343
<INCOME-PRETAX> 1,141
<INCOME-TAX> 523
<INCOME-CONTINUING> 618
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 618
<EPS-PRIMARY> .10
<EPS-DILUTED> .10
</TABLE>
