WORKING AGREEMENT
between
CONN-SELMER, INC.
and
UNITED AUTOMOBILE, AEROSPACE
AND AGRICULTURAL IMPLEMENT
WORKERS OF AMERICA,

Local No. 612
(U.A.W.)

PREAMBLE

This Agreement entered into and concluded at Elkhart, Indiana, this 31st day of March, 2003 and effective the 1st day of April, 2003 by and between Conn-Selmer, Inc., 1119 North Main Street, or its successors, hereinafter known as the Company, and the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (U.A.W.), and its affiliated Local Union No. 612, hereinafter known as the Union.

Article I

DEFINITIONS

For the purpose of this agreement, certain words and phrases, wherever they appear in this agreement, shall be deemed to mean the following:

a)              Employees: All persons in the employ of Conn-Selmer, Inc. for more than sixty (60) days at 1119 North Main Street, and its Plant 2 at 2415 Industrial Parkway, plus other operations now under the jurisdiction of Local No. 612, which may be moved and which will still remain under the jurisdiction of Local No. 612, Elkhart, Indiana, except sales, clerical, engineering, chief inspector, and supervisory employees.

b)             Seniority: An employees status in relation to other employees based on length of service.  See Article VIII.

c)              Steward: A representative of employees, as provided for in Article III.

d)             Bargaining Committee: The Committee of employees created in accordance with the provisions of Article III.

e)              Company Executives: Any executive or other representative of the Company who may be designated to represent the Company in carrying out the provisions of this agreement.

f)                Grievance: Any act or condition which an employee feels to be in violation of the terms of this agreement or unfair or improper in connection with wages, hours, and working conditions.

g)             Probationary Worker: A person who has been employed less than sixty-one days.

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h)             Classification: More than one employee engaged in the same or similar work in a department where each employee in a group could do the work of any other employee in that group in accordance with Company standard.

i)                 Average Employee: An employee skilled and experienced in the type of work in which he is engaged and who shows willingness and ability to produce a reasonable volume of output of standard quality work.

j)                 Insubordination: An employees willful refusal to obey a proper order or instructions of a supervisor.

k)              To Quit: To leave the employment of the Company voluntarily; statement of an employee to his supervisor or other notice to the Company of his intention to leave his employment, coupled with failure to report at the beginning of working hours on the work day after notice of intention to leave employment; any action as listed above shall be considered conclusive evidence of leaving the employment of the Company for the purpose of this definition and of interpretation of this agreement.

l)                 Trainee: An employee who is being trained because of a bump, job elimination, or open bid.

m)           Reprimand:  Disciplinary procedure.  Refer to Article VII, Shop Rules and Discipline

n)             Straight Time Average Hourly Earnings: All regular earnings averaged over a period of time excluding overtime premium pay.

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Article II
RECOGNITION

Section 1, Bargaining Agent

The Company recognizes the Union as the exclusive bargaining agent for all its employees (exclusive of salesmen, clerical, engineering, chief inspector, and supervisory employees) for the purpose of collective bargaining with respect to rates of pay, wages, hours and other conditions of employment.

Section 2, Union Members

So long as permitted by applicable laws, decisions and regulations, all employees covered by this agreement shall as a condition of continued employment be required to be members of the Union on the effective date of this agreement.  Probationary employees and new hires shall become eligible for union membership thirty (30) calendar days after being hired and shall become members of the Union before being transferred to the active seniority list at the end of the sixty (60) day probationary period.

Section 3, Dues

The Company shall deduct all regular dues and initiation fees levied in accordance with the International Union Constitution from the pay of each member who has voluntarily signed an authorization permitting and instructing the Company to make such deductions.  Such deductions shall be made from the 3rd pay of the employee each month and remitted to the Financial Secretary of Local 612 not later than the last day of each calendar month.  The Union shall furnish to the Company a schedule of the current dues and initiation fees and notify the Company officially in writing of any change in such dues.

Article III
REPRESENTATION

Section 1, Stewards & Bargaining Committee

For the purpose of collective bargaining, the employees shall be represented by a Bargaining Committee of not to exceed six (6) members, two of whom shall be the President and Vice President of the Union, plus any International Representatives who may accompany them.

The Company will recognize members of the Bargaining Committee, as well as stewards as representatives of the Union, for the purpose of handling safety and health complaints, settling disputes and grievances.  Members of the Bargaining Committee and Stewards will represent the respective plant and areas of their jurisdiction and will be permitted to leave their work during the working hours to perform their designated duties as provided for in this agreement.

At the request of either party, the President (during Company paid hours) may be called in to help adjust any controversy that may exist between the parties.

Should the International Representative feel it necessary, they reserve the right to call in the International Time Study.

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The Union will be entitled to a sufficient number of stewards so that each employee has the opportunity of being represented as provided in the Grievance Procedure of this agreement.

The Union assumes the responsibility for assigning the duties of the Bargaining Committee and stewards, but Bargaining Committee members or stewards will not be discriminated against because they perform duties assigned to them as provided in this agreement.

The steward and Bargaining Committee person shall notify the supervisor at the time of going on union business, if the supervisor is available.

Section 2, Notification

The Union agrees that immediately upon the election of new representatives, stewards, or any change in the personnel of any of the Committees dealing with the Management, the Management will be immediately notified of such changes in writing.

Section 3, Payment for Union Time

Shop Stewards, Time Study Representatives and no more than six (6) members of the Bargaining Committee will be paid for time lost while handling grievances, complaints, or any negotiations with representatives of the Company as allowed for by this agreement.  Incentive Union representatives will be paid 125% of their applicable maximum incentive base rate and non-incentive representatives will be paid their applicable hourly rate.

Employees shall be paid their hourly rate or incentive base rate if applicable for time lost when discussing grievances or complaints with representatives of the Company during regular working hours.

If Bargaining Committee members are requested by Management to stay beyond their shift or come into the plant before or after normal working hours, premium time will be paid for the time spent in such meetings.

Section 4, Union Bulletin Boards

The Company shall provide a bulletin board for the exclusive use of the Union.

Section 5, Union Activities

The Union agrees that its members will not carry on any Union activities in the plant or on the premises of the Company during working hours, except as definitely provided for in this agreement, or as may be mutually agreed upon.  Those who are not working shall abide by this rule, as do those who are working.  Lunch hours and before and after regular work shall not be considered working hours.

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Article IV
MANAGEMENT

Section 1

The Management of the plant and the direction of the working force remains an exclusive Management function.  This right of Management includes, but is not limited to, such functions as the right to plan, schedule, direct and control operations; to study or introduce new production methods or facilities; to discontinue present jobs; to make reasonable rules and regulations covering the operations of the plant; to hire, promote, demote, assign, and transfer employees; to lay off employees because of lack of work; and to suspend, discharge, or otherwise discipline employees for proper cause.  The Company shall have the exclusive right to determine the source or sources from which applicants for work shall be secured and shall be the sole judge of requirements and qualifications for employment.  All of the above shall be true as long as it does not conflict with other provisions herein.

Supervisors and other salaried employees not under the jurisdiction of U.A.W. Local #612 will not perform bargaining unit work except for the following:

1.               Experimental, developmental, or prototype work

2.               Emergencies An unforeseen combination of circumstances or the resulting state that calls for immediate action.  Departmental Steward will be notified as these occasions arise

3.               Instruction and training of bargaining unit employees

4.               Diagnosis of equipment for operational problems

Section 2, Subcontracting/Outsourcing

It is the policy of the Company to utilize its employees in the performance of manufacturing, maintenance, and tool and die work in the shop that is presently and historically performed by Bargaining Unit employees.  Both parties do hereby recognize that instances may arise during the term of this agreement when the Company finds it necessary to utilize outside contractors.  In such instances, the Company will provide the Union sixty (60) days advance notice, in writing, and information prior to such utilization and agree to meet with the Bargaining Committee and discuss the reasons for the proposed outsourcing and any possible solutions that may otherwise economically allow us to keep these jobs in-house.  If subcontracting reduces an employees work hours below forty (40), the Company agrees to meet with the Union in order to attempt to resolve the issue.  If the Union is not notified of the outsourcing or subcontracting, the Company will pay the amount of labor cost of the job that was done outside.

Section 3, Commitments re Cooperation, Employee Empowerment and Team Concept

Conn-Selmer, Inc. and the U.A.W. Local Unions have recognized their respective responsibilities to develop improvements in the work environment.  Both parties maintain that an adversary relationship in labor matters is counterproductive.  It is readily understandable that future success in our very competitive business depends in large measure upon the ability to create a work environment which enables each person to contribute his/her knowledge, skill, ability and experience to the health of the enterprise as a whole.  The parties agree to continually review and revise non-productive work rules and practices that adversely affect the competitiveness of the operations.  Neither party can condone wastefulness in any manner be it of people, plant,

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machinery or material.  Both parties agree to work as a team in the exploration and development of innovative programs conducive to the positive attitudes of all our employees.  The Company and the Union agree that teamwork, cooperation and communication are key factors in the overall success of the operation as a whole. The Union and the Company agree to make every effort possible to maintain a positive and productive relationship.

Section 4, Safety and Health

The Company shall continue to make necessary provision for the safety and health of its employees during the hours of their employment.  Individual employees shall be responsible for using proper safety devices and following all health and safety rules and regulations.  The Union shall cooperate with the Company in the use of safety devices and observance of safety rules and regulations.

Employees of Conn-Selmer, Inc. under the jurisdiction of the U.A.W. will be represented by their Health and Safety Representatives from the Bargaining Committee.  They will be automatic members of the Safety Committee.  The Safety Committee will meet on a monthly basis to discuss and review the safety condition of their plant.  In addition to the Health and Safety Representatives the Safety Committee will consist of designated members of Management.

Article V
DISCRIMINATION

Section 1, Discrimination/Union

The Company agrees that there shall be no discrimination against any member of the Union because of said membership.

Section 2, Discrimination/Other

Neither the Company nor the Union shall discriminate against any employee because of age, sex, race, nationality, handicap, color, religion, political belief, or marital status for the purpose of evading the spirit or letter of this Agreement.

Article VI
GRIEVANCE PROCEDURE

Section 1, Purpose and Intent

The purpose of this contract is to provide a working agreement which will enable the Company and its employees, who are represented by the Union, to perform their daily production in an efficient, peaceful, and orderly manner with fairness to all.

It is the intent of all parties to gain benefits through cooperation and good will in the fulfillment of their respective obligations as set forth in the contents of this agreement.

Section 2, Grievance Procedure

For the purpose of peacefully settling all complaints and grievances, both parties will be governed by the grievance procedure as outlined in this article.

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The Company agrees to meet with the representatives of the Union to settle grievances or disputes at such time as may be necessary and reasonable.

The Bargaining Committee may write and sign a grievance on behalf of an employee or group of employees.  If the issue raised is not appropriate for resolution at the first or second step, the grievance may be referred by the Bargaining Committee directly to the third step.

Section 3, Time Limits

No complaint will be considered a grievance unless the incident causing the complaint is reported within ten (10) working days of the time it became known to the person making the complaint.

Time limits will be strictly adhered to in all five steps. If the Company fails to meet the negotiated time limit in the grievance procedure, the specific adjustment requested will be awarded to the grievant, provided such adjustment is allowed by our working agreement and is compliant to the present contract language.  Should the Union fail to meet the limits set forth in our working agreement, the Companys last answer will service as settlement to the grievance, providing such answer is compliant to our contract language.  Extensions to the time limits may be mutually agreed to in writing.

Section 4, Steps to the Grievance Procedure

Step One

An employee having a grievance, or one designated employee of a group having a grievance will first take up the grievance with the steward and the supervisor who will attempt to adjust the problem

If the grievance is not adjusted by the supervisor, it will be reduced to writing by the Union and signed by the supervisor.  The supervisor will answer the grievance in writing within five (5) working days, excluding weekends and holidays, after receipt of the grievance.

Step Two

If the supervisors answer is unsatisfactory, the grievance will be forwarded to the Bargaining Committeeperson of that area or the President.  He/she may then appeal the grievance to the Human Resource Representative (or alternate when the need arises) within five (5) working days.  They will meet, within five (5) working days, in an attempt to settle the grievance and the Human Resource Representative (or alternate when the need arises) will write an answer within five (5) working days, excluding Saturdays, Sundays, and holidays after the meeting.

Step Three

If the grievance remains unsettled, it may be forwarded by a member of the Bargaining Committee to the President who will meet with the Bargaining committee within five (5) working days to the Plant Manager (or alternate when the need arises) who will attempt to resolve the matter with the President, Vice President and one other committee person.  The Plant Manager (or alternate when the need arises) will meet with President, Vice President and one

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other committee person will meet on the grievance(s) within five (5) working days.  The Plant Manager (or alternate when the need arises) has to give an answer within five (5) working days, excluding Saturdays, Sundays, and holidays from the final meeting and the discussion of the matter.

Step Four

If the grievance remains unsettled, it may be appealed to step four by filing a written appeal within five (5) working days of the step three answer.  The International Representative, the Bargaining Committee and the Director of Human Resources (or alternate when the need arises) will meet and attempt to resolve the grievance no later than thirty (30) calendar days.

The Director of Human Resources (or alternate when the need arises) will give their decision in writing with respect to the grievance within ten (10) working days excluding Saturdays, Sundays, and holidays, from the final meeting and discussion of the matter.

The Union representatives or the Management will have the right to call as witness any employee to testify as to the facts concerning any disputes during the hearing of a grievance or complaint.

Step five, Arbitration

Any grievance which is not satisfactorily settled in Step Four of the Grievance Procedure may be submitted to arbitration by the Union, by providing the Company with a written notice of its intent to arbitrate within thirty (30) working days of the receipt of the Companys answer in Step Four.

The Union and the Company will agree upon an arbitrator selected from a panel of seven (7) arbitrators obtained from the Federal Mediation and Conciliation Service, or any other method mutually agreed to.  The cost of such panel will be split between the parties.  Selection will be made by the Company and the Union from the Federal Mediation and Conciliation Service panel, eliminating one name until only one name remains on the list.  The name remaining will be the arbitrator.  The right to strike the first name on the panel will be rotated between the Company and the Union.

The arbitrators power will be limited to the application and interpretation of the agreement to settle the grievance before him.  The arbitrator shall at all times be governed wholly by the terms of this agreement and will have no power to, or authority to, amend, alter, or modify this agreement in any respect.  The arbitrators fees for the hearing will be paid by the losing party. The Company and the Union each will pay the expenses of its own representatives and witness.  Should either party choose not to use the first panel of arbitrators, that party that chooses to send for a new panel will bear the total expense of said panel.  Should either party request a stenographer, said party will bear the total expense of the stenographer.  If the arbitrator renders a split decision the arbitrator shall make as part of his/her decision a ruling as to how the cost of his/her services and expenses shall be prorated.  It will be the duty of the arbitrator within thirty (30) days after the oral hearing is concluded to make his/her decision in writing and to furnish a copy thereof to each of the parties.  His/her decision will be final and binding upon both the Union and the Company.

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Note:  The Union retains the right to withdraw any grievance at any time in the grievance procedure.

Section 5, Probationary Employees

The Union may represent any probationary employee in the matters of wages or working conditions only.

Section 6, Lockout and Strikes

The parties hereto agree that at no time during the life of this agreement shall there be any strike, walkout, slow-down, lockout or other stoppage of work in the plants of the Company.  During the term of the Agreement, the Company agrees that it will not lockout its employees.

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Article VII

SHOP RULES AND DISCIPLINE

In every business where many people work together, some specific rules and regulations are necessary to define acceptable conduct and to promote the smooth functioning of the business as a whole.

The purpose of the following rules is to insure all employees safety and fairness in their cooperative efforts.  The Company feels that the great majority of employees are conscientious and follow acceptable work habits. Unfortunately, there are a few individuals who abuse the rules. For this reason, we have set forth acts of misconduct, which, if committed, will result in appropriate disciplinary action.

When an employee is being counseled for a disciplinary problem, the steward will be involved at the department level and the President/Committee person or designee at the Human Resources level.

Infractions of a Minor Nature

1.               Loafing, neglect or failure to perform assigned duties.

2.               Violation of safety rules

3.               Failure to be in assigned area or at work station at required time

4.               Leaving the department or job prior to authorized time

5.               Use of the telephone during working hours without permission

6.     Creating or contributing to unhealthful or unsanitary conditions, or displaying signs, obscene pictures or literature, or distributing them.

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