TENTATIVE SETTLEMENT AGREEMENT

COUNCIL OF UNIONS AND INDEPENDENT NEWSPAPERS, INC.

 

1.       MODIFICATION AND EXTENSION OF LABOR CONTRACTS.

In exchange for concessions listed below, the parties will modify and extend the existing collective bargaining agreements (CBAs) between Independent Newspapers, Inc., and the Unions (Teamsters Local 372, Teamsters 372 Mailers Division, Newspaper Guild of Detroit, Pressmen Local 13N, and DTU Local 18).

a.        Term of CBAs:  Date of approval by the Bankruptcy Court to June 30, 2011.  (Current expiration date, June 30, 2010.)

b.       Modifications to CBAs will be effective upon approval by the Bankruptcy Court.

 

2.       WAGES.

a.        First year of CBAs:  Wages will be reduced 12.5% from current levels, effective upon ratification. 

Advertising commissions and bonuses, for either bargaining unit or non-bargaining unit employees, are not subject to this reduction. 

The 2% wage increase due on July 1, 2009 under current CBAs will not be implemented.

b.       Second year of CBAs:  Effective July 1, 2010, wages will be increased 2.5% (that is, to a level 10% below current levels), if Company earnings reach the level set forth in Section 4 below.

c.        Except for item 2(b) above, wages will be frozen until expiration of the CBAs on July 31, 2011.

However, if wage increases or bonuses (other than advertising commissions and bonuses) are given to non-bargaining unit employees, they will be given to bargaining unit employees.           

d.       These wage concessions are contingent upon all other employees having the same wage reductions and wage freeze. 

                                                               i.      If a Union claims that the Company violated this provision, the Union may pursue the matter in a grievance or arbitration, but such a claim will not basis for voiding this agreement.

                                                              ii.      New hires, transfers or promotions in which result in a higher wage rate are not encompassed by this provision. 

 

3.       HEALTH AND DENTAL INSURANCE.

a.        Effective July 1, 2009, the current health insurance Health Alliance Plan (HAP) HK7 will be replaced with

Blue Care Network (BCN) Plan 5.

COMPARISON TABLE:

Benefit Co-pay                HAP HK7                 BCN5

                                                                drugs                      $15/35/50                $20/40/50 (generic/brand/non-formulary)

                                                                office visit        $25/35                     $30/40

                                                                urgent care         $50                          $50

                                                                emergency rm.     $150                        $150

                                                                hospital                  $250                        $250

Approximate Monthly Rates:                 

single                                $430                                $367

2 person                                $989                                $815

adult w/children                $903                                $806

family                                $1161                                $965

b.       Effective July 1, 2009:  Employee health insurance contributions will be 30% of the BCN5 and dental monthly premiums (increased from 13% currently), effective upon ratification. 

c.        Effective July 1, 2010, employee health insurance contributions will be 20% of BCN5 and dental premiums, if Company earnings reach the level in Section 4 below.

 

4.       PARTIAL RESTORATION OF REDUCED WAGES AND EMPLOYER INSURANCE CONTRIBUTIONS.

a.        The wage increase in Section 2(b) above and the reduction in employee insurance contributions in Section 3(c) above will occur (“snap-back”) if the Company’s annual earnings exceed $350,000 plus the cost of the snap-back. 

b.       Definitions:

                                                               i.      The cost of the snap-back is the annual cost of:

1)       the 2.5% wage increase in Section 2(b) and the same increase if given to non-bargaining unit personnel, plus

2)       the reduction in insurance contributions from 30% to 20% in Section 3(c) and a reduction in non-bargaining unit employee insurance contributions from 40% to 30% if given to non-bargaining unit personnel.

The annual cost of the wage increase will be calculated using the wage rates after the 12.5% reduction in Section 2(a), not any higher wage rates related to new hires, transfers or promotions which occur after that reduction.

                                                              ii.      “Annual earnings” means earnings after payment of interest and taxes but not deduction of depreciation, as consistently calculated in the past.

                                                            iii.      The “annual earnings” period will be:  any four consecutive accounting quarters, looking backward from the start of a quarter to the previous four quarters.  The “accounting quarters” will be those currently used by the Journal Register Company in the normal course of its accounting.

                                                            iv.      The first assessment of annual earnings for purposes of this snap-back will be done after the wage reductions in Section 2 have been in effect 12 months, at the end of the quarter in which this 12-month period ends.  Further assessments will occur quarterly thereafter.

                                                             v.      If a quarterly assessment results in the required annual earnings being achieved, the snap-back will go into effect on the first day of the quarter in which the required annual earnings has been achieved.  The snap-back will remain in effect for the remainder of the term of the CBAs. 

c.        For purposes of the quarterly assessments of the Company’s annual earnings in Section 4(b), the Company’s financial statements will be made available to the Unions for examination and audit.  The financial statements and related information will be kept confidential and will be made available only to Unions officers and representatives signatory to the Confidentiality Agreement.  Union auditors will be allowed full access to the Company’s books, provided the auditors’ requests are reasonable and not overly burdensome.  The Unions will be responsible for the cost of their auditors.

 

5.       OVERTIME.

a.        Overtime will be paid only after 40 hours worked per week.  Daily overtime will not be paid.

b.       Holiday hours paid will count as “hours worked” to meet the 40-hour requirement.  The credit for holiday hours paid will be the number of hours paid without any pyramiding of hours due to overtime pay or premium pay.  No other paid benefit time will count as “hours worked”. 

c.        Mailer “sixth shifts” and Sunday premium are not affected by the foregoing.

 

6.       PENSIONS.

a.        The Company will cease participation the following multi-employer pension plans:  Pressmen Local 13N Plan; Pressmen West Coast Plan; Teamsters Central States Pension Plan; Newspaper Guild International Pension Plan.

b.       The Company will contribute one-half of the current amount of Company contributions for terminated pension plans to the following plans:

                                                               i.      For Pressmen and Teamsters, to the GCC/IBT Inter-Local Pension Fund, specifically:

·         Pressmen:  $6.75 per shift to Inter-Local Plan.

·         Teamsters:  $9.00 per shift to Inter-Local Plan.

[The Teamsters’ current $17 per week employee diversion for the Central States plan will be put back on the paycheck.]

·         The Company will make the required “check-off” of contributions to the Inter-Local Plan.  This will be done as a wage diversion in the same manner as was agreed between Pressmen Local 16N and the Delaware County Daily Times.

                                                              ii.      For the Guild, to the Employer’s 401k plan.

·         $16 per week to Employer’s 401k plan.

c.        For the Mailers and DTU 18, issues related to the CWA/ITU Negotiated Pension Plan (NPP) will be resolved in discussions between the CWA/ITU Sector and the the NPP, after consultation with the Mailers. 

However, the resolution will include the principle that the Company will contribute one-half of the current contributions and employees will contribute the remainder of required contributions. 

d.       The Company will make no other 401k contributions or matching contributions. 

e.        The Unions will take any steps and sign any documents which are necessary facilitate the Company’s cessation of participation.

 

7.       EFFECT OF SETTLEMENT AGREEMENT.

a.        This Settlement Agreement will exclusively govern all of the subjects which it addresses, and it supersedes the terms of the existing CBAs on those subjects and any other agreements, side letters pre-dating this settlement or practices on those subjects.  Any conflict, express or implied, between the terms of this Settlement Agreement and the existing CBAs and any other agreements, side letters pre-dating this settlement or practices shall be governed by this Settlement Agreement. 

b.       All other terms of the CBAs not addressed by this Settlement Agreement remain in effect.

 

8.       ARBITRATION.

a.        Any dispute concerning this Settlement Agreement may be submitted to arbitration in the manner provided in the CBAs.  However, if the dispute concerns any issue related to earnings, accounting or auditing under Section 4 of this Settlement Agreement, an arbitration board will be used consisting of a neutral arbitrator, a representative designated by the Employer and a representative designated by the Union, and the neutral arbitrator must have accounting expertise.

 

9.       RATIFICATION.

a.        This settlement agreement will be submitted to ratification by union members and will be effective upon approval by the Bankruptcy Court.