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Exhibit 10.55
1999 SETTLEMENT AGREEMENT
BETWEEN
UNITED STEELWORKERS OF AMERICA, AFL-CIO
ON BEHALF OF ITS LOCAL 2354
AND
BARTECH, RESI, AND RTI
WHEREAS, on August 2, 1998, Bar Technologies Inc. ("BarTech") and RES
Acquisition Corporation entered into the 1998 Settlement Agreement, which
included the Master Labor Agreement (the "Master Agreement") and the
plant-specific agreements, setting forth the obligations of BarTech and Republic
Engineered Steels, Inc. ("RESI") at all of their USWA-represented facilities
(such agreements, collectively with the benefit agreements entered into in
connection therewith, the "1998 BLA"); and
WHEREAS, Republic Technologies International, LLC ("RTI") wishes to
adopt the 1998 BLA for all USWA-represented facilities other than those of
Canadian Drawn Steel Company, which will be covered by a separate collective
bargaining agreement; and
WHEREAS, pursuant to a Master Restructuring Agreement (the "MRA"),
affiliates of Blackstone Management Partners L.P. ("Blackstone"), USX
Corporation ("USX") and Kobe Steel, Ltd. ("Kobe") propose to combine the bar
steel businesses of BarTech, RESI and USS/Kobe Steel Company (other than its
tubular steel business to be separately held) ("USS/Kobe") into RTI, a
newly-formed entity to be controlled by BarTech, in a transaction expected to be
consummated in the third calendar quarter of 1999 (the "Transaction"); and
WHEREAS, in the event that the Transaction is completed, the combined
RTI entity would own the following plants represented by the United Steelworkers
of America (the "USWA" or "Union"): from BarTech, the plants in Johnstown,
Pennsylvania, and Lackawanna, New York; from BarTech's subsidiaries Bliss &
▇▇▇▇▇▇▇▇ Steel Company and Canadian Drawn Steel Company, the plants in Harvey,
Illinois, and ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ (▇▇▇▇▇▇) respectively; from RESI, Massillon Cold
Finish, Massillon Hot Roll, Special Metals (Massillon), all in Massillon, Ohio,
and
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Canton Eighth Street in Canton, Ohio, the plant in Chicago, Illinois, the
cold-finished plants in Beaver Falls, Pennsylvania, Willimantic, Connecticut,
Seventh Avenue and Dunes Highway, both in Gary, Indiana, and a stainless plant
in Baltimore, Maryland; and from USS/Kobe, the plant in Lorain, Ohio. In
addition, RTI would own B&L's cold-finished plant in Cartersville, Georgia
(non-union); and
WHEREAS, if the Transaction is consummated, RTI anticipates permanently
closing one of the existing two blast furnaces, shutting down the billet caster
operation, investing capital in the billet yard and rolling facilities resulting
in headcount reductions, consolidating administrative and support functions at
the corporate headquarters, and building a new processing center in Ohio to be
manned by USWA represented employees. Overall, a decline in the net hourly
headcount of about 575 is expected during the three (3) years of
transition/consolidation after the consummation of the Transaction; and
WHEREAS, the Union has emphasized its objectives of, among other
things, providing a decent and humane set of retirement options for employees
affected by headcount reductions, and assuring that any RTI transaction
preserves as many bargaining units jobs as possible; and
WHEREAS, BarTech, RESI, USX and Kobe have endeavored to satisfy such
objectives on the terms described herein and have indicated that they will not
close the Transaction unless this Settlement Agreement has first been enter into
by the Union and unless the Master Agreement and Lorain Plant Specific-Agreement
(as defined below) have first been ratified by the Union's members at USS/Kobe's
Lorain, Ohio facilities affected thereby; the effectiveness of this Settlement
Agreement being conditional upon the closing of the Transaction for those
employees currently employed by USS/Kobe in its bar steel business; and
NOW THEREFORE IT IS AGREED that:
The parties to this Settlement Agreement shall be BarTech, RESI, RTI,
and the Union. This Settlement Agreement adopts the 1998 BLA with respect to the
USWA-represented facilities of BarTech and RESI to be transferred to RTI
pursuant to the MRA and adopts the Master Agreement and the Lorain
Plant-Specific Agreement with respect to Union employees of USS/Kobe in its bar
steel business.
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This Settlement Agreement, the 1998 BLA (with respect to RTI)
and the Lorain Plant-Specific Agreement shall only become effective upon the
closing of the Transaction. The parties enter into this Settlement Agreement as
of July 7, 1999.
I. BARGAINING STRUCTURE/SINGLE AGREEMENT/EXPIRATION DATE
A. RTI shall be obligated to the Union under the 1998 BLA applicable to
all USWA-represented facilities of RTI other than Canadian Drawn Steel
which shall be covered by a separate collective bargaining agreement
which shall be coterminous with the agreement covering the other
plants. The 1998 BLA shall address certain subjects on a "Master
Agreement" basis and other issues on the basis of the former corporate
identity of the plants in question or a plant-specific basis
(hereinafter "Plant-Specific Agreement").
The current labor agreement (exclusive of their benefits agreements)
between USS/Kobe and the Union ("Predecessor Labor Agreement" or "PLA")
shall be replaced by the Master and the Plant-Specific Agreement as
well as this Settlement Agreement.
The benefits agreements associated with the PLA shall continue in
effect until merged or harmonized together pursuant to the RTI benefits
agreements to be adopted by the parties in accordance with this
Settlement Agreement and the Master and Plant-Specific Agreement.
The formerly separate USS/Kobe Office & Technical bargaining unit under
the PLA shall remain in a single RTI bargaining unit. The termination
date previously established by the PLA shall be amended and extended to
give the BLA a termination date of October 31, 2003.
Wherever this Settlement Agreement sets forth an understanding not
described as plant-specific, such understanding shall be included in
the Master portions of the 1998 BLA. Any language in the Plant-Specific
Agreement which conflicts with the Master portion of the 1998 BLA shall
displace the Master provisions of the 1998 BLA.
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B. In the negotiation of a successor agreement to the 1998 BLA, bargaining
shall begin with plant-level representatives negotiating over the
topics covered in the agreement on plant-specific issues. After an
appropriate interval of such bargaining, Master bargaining shall
commence, and all issues still unresolved in the plant-specific
bargaining shall be referred to the Master bargaining for resolution.
II. RTI PROFIT SHARING PLAN
RTI bargaining unit employees who were formerly employed by USS/Kobe
shall be included in the RTI Profit Sharing Plan and for purposes of
distribution shall be included in the BarTech Pool as set forth in the
1998 Settlement Agreement.
III. RTI PENSION PROGRAM (AS DEFINED IN PENSION TERM SHEET)
A. The benefits described below will be applicable to former USS/KOBE
employees employed by USS/KOBE immediately prior to the effective date
of this Agreement, through the adoption of Pension Agreements
containing provisions identical to those in the current USS/KOBE
Pension Agreement except as modified below.
B. The regular monthly pension benefit shall be the greater of (1) or (2)
multiplied by all years of continuous service both before and after the
Transaction Date (including all years of service recognized under the
present USS/KOBE Pension Agreement):
1. $35.00 ($46.00 for retirements on and after May 1, 2003)
2. The snapshot Benefit.
The Snapshot Benefit for each participant equals the benefit under the
percent pension formula, calculated as of the Transaction Date, divided
by the participant's years of continuous service as of the Transaction
Date.
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C. For employees retiring after age 55 with at least 30 years of service,
the 30-Year Minimum Benefit will be available.
D. For 30-year retirements, the Increased Pension shall be the current
$400/$1,500 benefit payment until eligible for 80% of full Social
Security Benefit. For employees who retire under this provision during
the term of this BLA, the Company shall waive the earnings offset
during their retirement period.
E. The Early Retirement Buyout benefit provisions under the current RESI
Pension Agreement shall be applicable with the reduced pension benefit
calculated under Paragraph B above.
F. Modify the Increased Pension provisions for Permanent Incapacity, 70/80
and Rule-of-65 Retirements to provide for continuation of payments
until eligible for 80% of full Social Security Benefits.
G. Change the Automatic Five-year Term Certain to provide the benefit in
the event of a death prior to retirement if the participant was
eligible for immediate retirement.
H. Eliminate the charge for Pre-Retirement Survivor Annuity Coverage in
the same manner as RESI under the RTI Plan.
I. Modify the Automatic 50% Spouse Option to provide for benefit payments
to pop-up in the event of the death of the spouse before the
participant or in the event of a divorce. This option shall be made
cost neutral to the Plan by mutually agreed to actuarial assumptions.
J. Modify the Surviving Spouse's Benefit provisions so they are the same
as those under the current RESI Pension Agreement.
K. Include appropriate provisions regarding crediting of continuous
service and the calculation of benefits (including any offsets) for
employees who transfer between RTI and USS/KOBE after the Transaction
Date.
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L. Under the Rule of 65 Retirement, the parties have agreed to include the
former USS/Kobe Plant in Group II for purpose of Suitable Long Term
Agreement (SLTE) as set forth in the 1998 Settlement Agreement.
M. The Pension Agreement will remain in effect for five (5) months after
the termination of the BLA.
IV LORAIN ECONOMIC MODIFICATIONS
The Lorain Plant Specific Agreement shall provide for the following Economic
provisions for the former USS/Kobe bar and steelmaking facilities:
A. Wages
1. Roll-up and Harmonization Schedule:
Current USS/Kobe New Effective Date
Classifications Labor Grade Of Agreement 3/1/00 11/1/01 11/1/02
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1-8 1 Standard 1292 1368 1388 1408
Bi-Weekly Wage
Scale
Equiv. Hr. Rate 16.15 17.10 17.35 17.60
9 and above 2 Standard 1372 1448 1468 1488
Bi-Weekly Wage
Scale
Equiv. Hr. Rate 17.15 18.10 18.35 18.60
2. Signing Bonus for all employees accruing continuous service on the
effective date of this Agreement:
$1,000 (Paid within 30 days from the effective Date of this
Agreement)
3. Shift Premium - Harmonize to RTI October 31, 2003.
4. Sunday Premium - Harmonized to RTI January 1, 2003.
B. Sickness & Accident - Harmonize to RTI, January 1, 2001.
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RTI S&A Weekly
Insurance Classification Benefit
Labor Grade 1 $285
Labor Grade 2 $298
C. Life Insurance - Harmonize to RTI, January 1, 2001.
Insurance Classification RTI Life
Insurance*
Labor Grade 1 $16,500
Labor Grade 2 $17,000
Employee 15+ yrs. $50,000
*Grandfather current employees under 15 years service at $20,000.
V. EARLY RETIREMENT BUYOUT PACKAGE ("▇▇▇") AND VOLUNTARY SEVERANCE PLAN
("VSP")
A. The Company and Union agree that a significant reduction in the ▇▇▇▇▇▇▇
level at the former USS/Kobe facility is essential to enable RTI to
become competitive and thereby improve job security. In order to lessen
the impact on employees, the parties have agreed to include former
USS/Kobe RTI employees in the ▇▇▇ and VSP programs set forth in the
1998 Settlement Agreement.
The Company's business plan calls for a reduction in the net number of
bargaining unit jobs at former USS/Kobe Bar and Steelmaking facilities
by approximately five hundred and seventy-five (575) during the
approximately three (3) years of the transition/consolidation. This net
reduction in bargaining unit jobs will be accomplished through the
shutdown of plant(s) (or departments or subdivisions thereof), capital
investments and productivity improvements due to work rule and job
classification improvements.
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B. RTI Office & Technical bargaining unit employees who were formerly
employed by USS/KOBE shall participate in the Early Retirement Buyout
Package (▇▇▇) and Voluntary Severance Program (VSP) as set forth in the
1998 Settlement Agreement and the "Adaptation and Interpretation of
▇▇▇" letters from ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ dated July 1,
1999.
C. The first one hundred (100) ▇▇▇'▇ offered at the former USS/KOBE
facility (Bar, Steelmaking, and Tube) shall be offered to Lorain
employees at RTI (Bar and Steelmaking) and USS/KOBE (Tube) on a
combined plant-wide continuous service basis. Thereafter, ▇▇▇'▇ offered
by RTI will be made available only to RTI employees.
VI The parties hereby adopt the following:
A. The Master Agreement set forth in Appendix A
B. The Lorain Office & Technical Plant Specific Agreement set
forth in Appendix B
VII. TERMINATION
The termination date of the new agreement shall be October 31, 2003.
The termination date of the benefits agreements shall be extended to
expire on February 28, 2004.
Executed this _____ day of July, 1999.
REPUBLIC TECHNOLOGIES INTERNATIONAL, LLC
By: Republic Technologies International Holdings, LLC, its Managing Member
By: Bar Technologies Inc., its Managing Member
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: CEO, Bar Technologies Inc.
United Steelworkers of America AFL-CIO
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