Collective Bargaining Agreement Between Spirit AeroSystems, Inc. and Society of Professional Engineering Employees in Aerospace – Wichita Engineering Unit

PREAMBLE

THIS AGREEMENT, dated as of the 8th day of October, 2009, is made and entered into by and between Spirit AeroSystems, Inc.(hereinafter referred to as "the Company"), and the Society of Professional Engineering Employees in Aerospace – Wichita Engineering Unit (hereinafter referred to jointly as “the Union”).

PREFACE

Company and Union Cooperation

This agreement is a reflection of the parties’ commitment to these shared principles:

• To maintain a respectful, cooperative relationship; recognizing that the employees are the most valued resource the Company has.
• To work together to further the mutual success of both parties; so that the Company will continue to have a productive, flexible, competitive business with a highly-motivated, skilled and involved workforce while enabling the Union to best represent and serve its members.
• To resolve issues to the greatest extent possible through a collaborative process marked by open communication and respect for the employees, the Company and the Union.

ARTICLE 1
BARGAINING UNIT

Section 1.1. Recognition

For the purposes of collective bargaining with respect to rates of pay and other conditions of employment, the Company recognizes the Union as the exclusive bargaining agent for the collective bargaining unit described as follows:

1.1(a) Engineering. All professional employees regularly employed in the Company's plants in Sedgwick County, Kansas, including persons who are on travel status from such plants, who are classified by the Company in one of the following

Classification Levels

· DE Quality Engineer

· JA Engineer/Scientist

· KE Industrial Engineer

· KK Manufacturing Engineer

· KZ Tool Engineer

· ND Embedded Software Engineer

· SC Customer Support Engineer

· ST Software Quality Engineer

1.1(b) Travel Status. Employees regularly assigned to the Company’s plants in Sedgwick County, Kansas but who are working away from these plants on travel status shall remain in the Bargaining Unit while on travel status for a period up to three (3) years. This period may be extended by mutual agreement of the Company and the Union.

Section 1.2. Engineers. For purposes of the remaining articles of this Agreement, the terms “employee” or "engineer" shall include only those persons who are a part of the unit as described in Section 1.1.

ARTICLE 2
RIGHTS OF MANAGEMENT

Section 2.1. Management of Company

Except as expressly modified or restricted by a specific provision of this Agreement, all statutory, common law, and inherent managerial rights, prerogatives, and functions are retained and vested exclusively in the Company, including, but not limited to, the rights in accordance with its sole and exclusive judgment and discretion to: establish reasonable rules and regulations; manage the operation; direct the workforce; promote, demote, transfer and/or assign its employees; discipline (up to and including discharge) employees for just cause; determine the number of employees to be employed; and hire employees, determine their qualifications and assign their work and work locations.

2.1(a) Company and the Union agree that due to the nature of the work performed by engineers represented by the Union, management employees may from time to time, perform work that would otherwise be performed by bargaining unit members for the purposes of product development, process improvement, employee training or emergencies.

2.1(b) The terms and conditions of this Agreement are minimum and the Company shall be free to grant more favorable terms and conditions to any engineer at its discretion.

ARTICLE 3
DETERMINATION OF DISPUTES

Section 3.1. Establishment of Procedure

Definition: The term “grievance” shall mean a written complaint involving the interpretation or application of this Agreement. A grievance may include a complaint about an act, communication or omission which occurs after the termination of this Agreement, but no such grievance shall be subject to arbitration.

Section 3.2. Just Cause Requirement

Engineers shall not be disciplined or discharged without just cause. For grievances involving a layoff, discharge, suspension, or involuntary resignation engineers shall have the right to begin the grievance process at Step 3 of this procedure, with the designated Company representative within ten (10) workdays after the date of such layoff, discharge, suspension, or involuntary resignation.

Section 3.3. Grievance Steps

Step 1 - Oral. Any engineer having a complaint shall first bring it to the attention of his immediate supervisor. A Union Representative shall be present if requested by the Company or the engineer. The decision in this Step will be final and binding unless, within ten (10) workdays of the decision, the engineer proceeds to Step 2 of this procedure.

Step 2 - Documented. Any complaint not resolved in Step 1 – Oral, must be documented and signed by the engineer specified with alleged facts giving rise to the complaint, the Article or Sections of this Agreement alleged to have been violated, and the remedy requested. The grievance must be submitted to the engineer’s supervisor within ten (10) working days of the Step 1 – Oral decision. Within fifteen (15) calendar days of the manager’s receipt of a grievance, the supervisor or his designee will meet with the engineer and the Council Representative or designee in an effort to resolve the grievance. A written answer shall be given to the engineer with a copy to the Union within three (3) workdays after the meeting.

Step 3 - Pre-Arbitration. The engineer’s manager’s decision will be final and binding unless, within ten (10) workdays of the issuance of that decision, the grievance is appealed in writing to Human Resources. Within fifteen (15) calendar days of Human Resources’ receipt of appeal, a Human Resource representative will meet with the engineer and Union representative. The Human Resources representative will give a written decision to the engineer with a copy to the Union within five (5) workdays from the date of such meeting. The parties attending such meetings shall have full authority to make final and binding settlements.

(a). Settlements. Grievances settled by the parties at any stage shall not be precedential for any purpose.

Step 4 - Arbitration. The decision of Human Resources will be final and binding unless, within ten (10) workdays of the issuance of the decision, the grievance is appealed in writing to arbitration. Such appeal shall be directed to Human Resources. An impartial arbitrator shall then be appointed by mutual agreement of the parties. Failing such agreement, a request shall be initiated by the parties to the Federal Mediation and Conciliation Service to submit a panel of seven (7) names from which a selection shall be made within fourteen (14) calendar days by the parties alternately striking one person on the panel. The fees and expenses of the arbitrator and any other joint expense incurred in connection with the arbitration proceedings shall be paid by the loser. The decision of the arbitrator will be final and binding on the Company and the Union.

Section 3.4. Agreement Not To Be Altered

The jurisdiction and authority of the arbitrator shall be confined exclusively to the interpretation of the explicit provision or provisions of this Agreement at issue between the Union and the Company. The arbitrator shall have no authority to add to, detract from, alter, amend or modify any provision of this Agreement, or impose on any party a limitation or obligation not explicitly provided for in this Agreement. The arbitrator shall have no authority or power to limit or impair any right that Article 2 of this Agreement reserves to Management as a Management prerogative. The arbitrator shall not consider as a past practice any other event, policy, or grievance resolution that occurred before the Effective Date of this Agreement.

Section 3.5. Time Limit to Process Grievance

The Company shall not be required to consider or process any Step 1 – Oral grievance not presented within ten (10) workdays after the occurrence which gave rise to the grievance, or any grievance which is not processed within the other time limits established in this Article. Upon mutual agreement the parties may extend time limits. Should Management not act within any prescribed time limit, the grievance shall automatically proceed to the next step.

Section 3.6. Arbitration Proceeding

Unless otherwise agreed by the parties, each grievance appealed to arbitration shall be the subject of a separate and distinct arbitration hearing and decision, and no arbitrator shall be selected by the parties to hear or decide more than one (1) grievance in any one (1) arbitration proceeding.

Section 3.7. Investigatory Interviews

Each engineer has the right, during an investigatory interview, which the engineer reasonably believes may result in discipline, to request the presence of his union representative, if the union representative is available. If his union representative is not available, such engineer may request the presence of another immediately available union representative. The union representative shall not obstruct or interfere with the purpose or timely completion of the interview. Reasonable delays will be accommodated to assure representation is available.

Section 3.8. Time Limitation as to Back Pay

Grievance claims regarding retroactive compensation shall be limited to thirty (30) calendar days prior to the written submission of the grievance to the Company; provided, however, that this thirty (30)-day limitation may be waived by mutual consent of the parties. The parties commit to make every effort to resolve arbitration cases as expeditiously as possible.

Section 3.9. Conferences During Working Hours

All conferences resulting from the application of provisions of this Article shall be held during working hours.

ARTICLE 4
ENGINEER PERFORMANCE

Section 4.1. Employee Performance Process

The Union and the Company agree that many factors contribute to performance. The Company will establish, modify and continuously improve the employee performance and evaluation process. The process will provide a documented means for the engineer and the manager to assess performance and an option to build Employee Improvement Action Plans (ref Article 7.10(b)). The Union and the Company will discuss and the Company will consider in good faith any changes to the current process.

4.1(a) Both the engineer and the manager are responsible for the completion of this process annually. A copy of the completed final review shall be placed in the engineer’s Personnel file.

4.1(b) It is expected that occasional disagreement over Performance Evaluation content will be resolved at the lowest possible level. A skip-level manager may be involved in the process for this purpose. However, in those few instances where such resolution is not possible, the Union may involve the Human Resource Director (or designee).

ARTICLE 5
HOLIDAYS

Section 5.1. Dates Observed

There will be twelve (12) scheduled paid holidays each calendar year. The following holidays shall be observed by the Company for the purpose set forth in this Article:

2009 Holidays	Day of Week	Date of Observance
Memorial Day	Monday	May 25, 2009
Independence Day	Friday	July 3, 2009
Labor Day	Monday	September 7, 2009
Thanksgiving Day	Thursday	November 26, 2009
Day following Thanksgiving	Friday	November 27, 2009
Winter Break	Thursday	December 24, 2009
Winter Break	Friday	December 25, 2009
Winter Break	Monday	December 28, 2009
Winter Break	Tuesday	December 29, 2009
Winter Break	Wednesday	December 30, 2009
Winter Break	Thursday	December 31, 2009

2010 Holidays	Day of Week	Date of Observance
New Year’s Day	Friday	January 1, 2010
Memorial Day	Monday	May 31, 2010
Independence Day Observed	Monday	July 5, 2010
Labor Day	Monday	September 6, 2010
Thanksgiving Day	Thursday	November 25, 2010
Day following Thanksgiving	Friday	November 26, 2010
Winter Break	Friday	December 24, 2010
Winter Break	Monday	December 27, 2010
Winter Break	Tuesday	December 28, 2010
Winter Break	Wednesday	December 29, 2010
Winter Break	Thursday	December 30, 2010
Winter Break	Friday	December 31, 2010

2011 Holidays	Day of Week	Date of Observance
New Year’s Day Observed	Monday	January 3, 2011
Memorial Day	Monday	May 30, 2011
Independence Day	Monday	July 4, 2011
Labor Day	Monday	September 5, 2011
Thanksgiving Day	Thursday	November 24, 2011
Day following Thanksgiving	Friday	November 25, 2011
Winter Break	Friday	December 23, 2011
Winter Break	Monday	December 26, 2011
Winter Break	Tuesday	December 27, 2011
Winter Break	Wednesday	December 28, 2011
Winter Break	Thursday	December 29, 2011
Winter Break	Friday	December 30, 2011

2012 Holidays	Day of Week	Date of Observance
New Year’s Day Observed	Monday	January 2, 2012
Memorial Day	Monday	May 28, 2012
Independence Day	Wednesday	July 4, 2012
Labor Day	Monday	September 3, 2012
Thanksgiving	Thursday	November 22, 2012
Day following Thanksgiving	Friday	November 23, 2012

Section 5.2. Unworked Holidays

Engineers shall receive eight (8) hours pay for unworked holidays (those holidays designated above), at their Base Rate in effect at the time the holiday occurs, plus shift premiums where applicable, provided, however the engineer works his last full working day prior to and/or after the holiday(s), unless excused by supervisor.

Section 5.3. Worked Holidays

Engineers shall receive the pay due them for the holiday, plus their Base Rate plus $6.50 per hour for all hours worked on such holiday plus shift premiums where applicable.

Section 5.4 Holidays During Earned Time Off

Holidays occurring while an engineer is on earned time off are not deducted from earned time off credits.

Section 5.5 Engineers Prevented from Working Because of Local Holidays

Engineers assigned to a non-Company facility who are prevented from working their assigned shift because a holiday not listed in this Article is recognized at that facility shall be paid for such assigned shift unless the Company, at its option, modifies the work schedule for the week in which the holiday falls so that the engineers are able to work a full work week. In all cases, hours worked on scheduled days of rest will be treated as overtime under Section 10.

ARTICLE 6
EARNED TIME OFF

Section 6.1. Computation of Credit

6.1(a) All earned time off must be approved in advance by one’s supervisor excluding illnesses. The amount of earned time off depends on the amount of continuous service and hire date. Years of service for Boeing engineers hired on or before the Effective Date shall apply. Earned time off will be accrued per pay period.

Complete Years of Service	Earned Time Off Days	Earned Time Off Hours
0 – 4	16	128
5 – 9	18	144
10 – 11	21	168
12 – 13	22	176
14 – 15	23	184
16 – 17	24	192
18+	25	200

Shift differential and work schedule premium pay will be paid where applicable in addition to Base Rate.

6.1(b) New hires will be advanced sixty-four (64) hours of ETO and any ETO accrued during the first twenty-six (26) weeks of employment will be used to repay the advanced ETO. If a new employee’s employment ends before the completion of twenty-six (26) weeks of employment, the employee must repay any ETO used but not earned prior to the termination.

Section 6.2. Unused Credit

6.2(a) All earned time off must be taken before the expiration of twelve (12) months after the date the earned time off day is earned. However, days earned up to the maximum accrual during an anniversary year may be carried over into the succeeding anniversary year. At no time shall an engineer carry a balance of more than two (2) times their annual accrual.

6.2(b) An engineer may choose to be paid, upon written request, for a total of up to five (5) earned time off days in any calendar year. An engineer may request payment on two occasions during the year: (1) on their service date; and (2) one other time during the calendar year at the engineer’s discretion.

Section 6.3. Use of Credit

All earned time off shall be taken at a time as to not seriously interfere with scheduled operations. So far as practicable, the Company will attempt to schedule all earned time off for the period for which engineers express a preference. Engineers may take earned time off in one tenth (.10) hour increments up to a maximum accrual per the appropriate schedule.

Section 6.4. Bereavement Leave

Up to three (3) days bereavement leave with pay will be granted to an engineer on the active payroll who, because of death in his immediate family, takes time off from work during his normal work schedule as such term is defined in Section 10 of this Agreement. Such pay shall be at the engineer’s straight time base rate, including shift differential and cost of living adjustment where applicable for each such day off; however, such pay will not be applicable if the engineer receives pay for such days off under any other provision of this Agreement. Bereavement leave must be taken on consecutive workdays as selected by the engineer within twenty (20) calendar days following the death (or evidence of belated notification of death). For the purposes of this Section 6.4 the "immediate family" is defined as follows: spouse, mother, father, mother-in-law, father-in-law, children, brother, sister, son-in-law, daughter-in-law, brother-in-law, sister-in-law, great-grandparents, grandparents, grandchildren, stepmother, stepfather, stepchildren, stepbrother, stepsister, half brother, half sister and spouse's grandparents. In addition, an engineer will be granted bereavement leave for a stillborn child.

ARTICLE 7

WORKFORCE

Section 7.1. Objective

The parties agree that it is in their mutual interest to ensure that appropriate employment, advancement, retention, redeployment, and layoff practices are implemented.

Section 7.2. Surplus

The term refers to a condition in which the Company determines that the assigned number of individuals exceeds the needs of the activity, project, program or organization to which the individuals are assigned. A surplus may or may not result in layoffs. To the extent deemed practicable by the Company, surpluses will be resolved by placing individuals in other assignments.

Section 7.3 Layoffs

The general objective of the procedure stated in this 7.3 is to provide for the accomplishment of layoffs for business reasons, to the end that insofar as practicable the layoffs will be made equitably, expeditiously and economically, and at the same time will result in retention on the payroll of those engineers regarded by management as comprising the workforce that is best able to maintain or improve the efficiency of the Company, further its progress and success and contribute to the successful accomplishment of the Company's current and future business. The occurrence and existence of any condition necessitating a layoff, and the number of engineers involved, will be determined exclusively by the Company. Following such determination, the Company will notify the Union of the anticipated layoff and, the affected retention groups and numbers of engineers that are likely to be affected.

Section 7.4 Procedure Relating to the Filling of Positions

7.4(a) The parties are agreed that it is in their mutual interest to assure that favorable promotional and retention consideration is granted to those individuals who are best able to maintain or improve the efficiency of the Company, further its progress and contribute to the successful accomplishment of current and future business. Accordingly, in the filling of positions, particular attention will be given to the development, advancement and retention of the existing workforce.

7.4(b) Re-assignments and transfers of the following kinds to engineers considered capable of performing the assignment may be made by the Company without regard to the provisions of 7.4(e). Positions so filled shall not be regarded as open positions.

7.4(b)(1) Reassignments of surplusing engineers and surplus individuals from management, engineering, or other salaried payrolls.

7.4(b)(2) Non-promotional reassignments of non-surplus engineers (as, for example, to staff new programs or to avoid surpluses).

7.4(b)(3) Return of engineers from layoff status or from leaves of absence.

7.4(b)(4) Transfers into the bargaining unit of individuals who at some previous time were assigned to a Job Classification currently within the bargaining unit.

7.4(c) An "in-place" promotion is the promotion of an engineer to a higher level within the same Job Classification. This promotion results from expansion of the engineer's own work assignment and is not for the purpose of filling a position vacated by another engineer. Such an in-place promotion does not constitute the filling of a position within the meaning of 7.4, and the Company may make such in-place promotions without limitations.

7.4(d) All vacant positions other than those filled as described in 7.4(b) and 7.4(c) shall be designated as open positions.

7.4(e) The Company will seek candidates from within the existing workforce for all positions that are designated by the Company as open positions. Engineers on the active payroll who have been declared surplus and/or who have been previously downgraded shall have priority rights to open positions as described in 7.4(e)(1) and 7.4(e)(2), respectively. For open positions remaining after the provisions of 7.4(e)(1) and 7.4(e)(2) have been met, other candidates shall receive consideration as described in 7.4(e)(3).

7.4(e)(1) If an open position occurs for a Job Classification in which layoffs are authorized, an engineer already assigned to that Job Classification shall be selected for the open position.

7.4(e)(2) If, after application of 7.4(e)(1), the open position still exists, first consideration shall be given to an engineer who meets all the following conditions:

7.4(e)(2)a Was, within six (6) years preceding the date on which the open position is designated, while on the active payroll, downgraded for other than performance reasons from the same Job Classification as the open position, or from a higher level of that Job Classification, or from a directly related management, engineering, or other payroll position.

7.4(e)(2)b Has not declined a Company offer of return to the Job Classification from which downgraded.

7.4(e)(3) If the open position still exists following application of 7.4(e)(1) and 7.4(e)(2), other candidates will receive consideration in the following order:

7.4(e)(3)a Individuals on file for recall as described in 7.9(b) and candidates who make timely application for the open position through the Company's Employee Internal Promotion and Transfer Process.

7.4(e)(3)b Others. The Company will select for the open position whichever of the considered candidates it determines will best achieve the purposes set forth in 7.4(a).

7.4(f) Employee Requests for Transfer. The Company will maintain an environment in which engineers can make known their interest in transferring to other positions for which they are qualified to perform and which may satisfy their personal needs. A job posting and transfer process will be maintained which will allow engineers, without fear of reprisal, to make application for transfer and receive consideration as a candidate for open positions for which they are qualified. All engineers, including those involved in surpluses, shall have full access to the Company staffing process. The Company will provide the Union with a copy of the request for transfer procedure and any changes thereto.

Section 7.5. Reductions-in-Force

Should reductions-in-force become necessary, the Company will retain engineers with the best performance or as warranted by business needs in each job classification.

7.5(a) Retention Rating: The Company will establish and communicate to the engineers and the Union, a retention rating process consisting of three (3) categories. Engineers will be given written notification of their rating.

i. Category A shall represent the engineers rated in the top 70% of the engineers in each classification.

ii. Category B shall represent the engineers rated in the next 20% of the engineers in each classification.

iii. Category C shall represent the engineers rated in the lowest 10% of the engineers in each classification. Engineers rated in Category C will be notified of their vulnerability to layoff during a reduction-in-force.

7.5(a)(1) Adjustments for Company Service. Engineers with twenty (20) or more years of Company service who are ranked in the Category C will be adjusted to a Category B retention rating, and Engineers with twenty (20) or more years of Company service who are rated in Category B will be adjusted to a Category A retention rating. Such adjustments will be reflected in the written notification to each engineer.

7.5(a)(2) Retention Rating Appeals. An engineer who feels the assigned retention rating is inappropriate may at any time discuss the matter with his or her immediate supervisor. If within thirty (30) calendar days following notification of the assigned retention rating the engineer elects to appeal the rating, and discussion with the immediate supervisor has not resolved the engineer's concern, certain ratings may be appealed for further review as provided below:

7.5(a)(2)a Engineers ranked in Category C will be allowed to appeal the rating.

7.5(a)(2)b Any engineer experiencing a drop in rating will be allowed to appeal the rating.

The Union will notify the Company of appeals and will provide the appropriate notification to the engineer.

7.5(a)(3) Final Appeal will reside with the Workforce Skill Team Strategist or HR Generalist, the Labor Relations Representative, and the Union Representative who will resolve the appeal by majority decision at the meeting or within five workdays thereafter. In the event the Union considers the decision to be inappropriate to the facts of the case, the Union may advance its appeal to the Site Union Relations Manager whose decision will be final and binding and will conclude the appeal process. Pertinent information may be obtained from meeting with the engineer, the immediate supervisor and/or the appropriate management representative.

7.5(a)(4) Retention Rating Frequency. Retention ratings will occur at least every eighteen (18) months. A retention rating may be conducted in any retention groups in advance of any contemplated surplus.

7.5(a)(5) Employee Notification. Following each periodic retention index review, the Company will provide each engineer with a written notification of the engineer's retention rating prior to the effective date, except where such is made impracticable due to the unavailability of the engineer or the supervisor occasioned by vacations, travel assignments, etc. In such circumstance the notification will be given as soon as practicable. In addition, management will discuss the new retention rating with engineers. The written notification will contain:

7.5(a)(5)a The engineer's Job Classification,

7.5(a)(5)b The engineer's retention rating prior to and following any adjustment under 7.5(a)(1),

7.5(a)(5)c The number of engineers in each of the three retention index categories [as adjusted under 7.5(a)(1)], within the engineer's retention index group,

7.5(a)(6)d The effective date, and

7.5(a)(7)e A description of the jobs and levels included in the retention group.

7.5(b) Out-of-Sequence Retention Rating. The retention rating of an engineer who is reclassified between periodic retention rating reviews will be sustained or revised as defined in 7.5(b)(3).

7.5(b)(1) With downward movement between sequenced rating groups, the engineer will become a Category A until the next periodic retention rating review.

7.5(b)(2) With an upward movement between sequenced groups, the engineer will automatically receive a retention rating of Category C until the next periodic retention rating review.

7.5(b)(3) When no level sequencing between groups is involved, the engineer will retain the same retention rating as before the reclassification until the next periodic retention rating review.

7.5(b)(4) An engineer who returns from leave of absence between periodic retention rating reviews shall retain the same rank until the next periodic retention rating review.

7.5(b)(5) An individual who enters the bargaining unit between periodic retention rating reviews shall automatically be assigned a retention rating of Category C until the next periodic retention rating review.

7.5(b)(6) An individual who returns from layoff shall be assigned the retention rating of record at the time of layoff, providing there has not been a retention rating review during the layoff period. The individual will automatically be assigned a retention rating of Category C if a retention rating review has been conducted during the layoff period.

7.5(b)(7) The out-of-sequence retention rating assigned under the provisions of 7.5(b)(1) through 7.5(b)(7) will be reaffirmed or superseded by the rank assigned during the next periodic retention rating review.

7.5(c) Retention Rating Group Makeup. Management will assign the retention rating by Job Classification (including Skill Management Code) for each engineer to whom this Article applies, with the basic objective of identifying those engineers who in the opinion of Management, are best able to maintain or improve the efficiency of the Company, further its progress and success and contribute to the successful accomplishment of the Company's current and future business. Each retention group will consist of all the engineers in the appropriate identified Job Classification Skill Management Code.

7.5(d) Application. When a workforce reduction is determined by management to be necessary within one or more retention rating groups, management will follow the applicable provisions of Article 8 and designate for layoff the required number of engineers within such retention rating groups, beginning with the lowest rating index.

7.5(d)(1) Exceptions. Exceptions to the designation for layoff may be made by the Company where it desires to retain a maximum of 10% of engineers who are Category C, 10% of engineers who are Category B, and 10% of engineers who are Category A within an affected Retention Index Group as of the time of the most recent retention index review. Exceptions will be identified in writing to the Union representative.

7.5(d)(1)a One (1) engineer may be subject to the 10% exception if there are one (1) to fourteen (14) engineers in the retention rating group;

7.5(d)(1)b Two (2) engineers may be subject to the 10% exception if there are fifteen (15) to twenty-four (24) engineers in the retention rating group;

7.5(d)(1)c Three (3) engineers may be subject to the 10% exception if there are twenty-five (25) to thirty-four (34) engineers in the retention rating group;

7.5(d)(1)d Higher numbered retention rating groups may be rounded similarly.

7.5(d)(2) Engineers designated for layoff in a retention rating group that is sequenced by levels with a group that has lower levels and which is populated will be allowed a downgrade in lieu of layoff.

7.5(d)(3) Engineers on travel status may not be laid off while on such status. Such engineers shall not be counted among or reduce the number of exceptions permitted by the provisions of Section 7.5 nor shall their rating prevent the layoff or downgrade of engineers with a higher rating who are otherwise subject to such action.

7.5(d)(4) Engineers selected by management to participate in a program of formal training in a field outside their current Job Classification, which training is conducted or approved by the Company, and engineers who at management's request transfer from one major functional area to another for a Company-sponsored skill transition and retraining program will be assigned a unique job code upon entering the training program or upon transfer to the new functional area respectively. The trainee shall retain this unique code for a period of six (6) months following completion of training or transfer to the new functional area, as the case may be, in order to allow time for the trainee to demonstrate his or her adaptability to the new assignment. During the period in which the trainee is assigned the unique code, he or she will retain the retention rating held at the time of assignment to the unique code. In the event a surplus is declared in the trainee's new assignment and if the trainee's rating would cause him or her to be an individual surplused, the trainee will be returned for assignment to an area under his or her last held regular assigned Job Classification and the retention rating of record.

7.5(d)(5) Engineers laid off after refusing less than equivalent job offers made as a result of re-deployment activities will be coded as a layoff and will be regarded for all Company purposes as a laid off engineer.

7.5(d)(6) The Company and the Union agree that, any provision in the parties' Collective Bargaining Agreements to the contrary notwithstanding, an engineer may request that he or she be voluntarily laid off without regard to assigned rating or adjustments for company service. If the request is approved by management, the engineer will be coded as a layoff and will be regarded for all Company purposes as a laid off engineer. The Union will be advised of all engineers approved for voluntary layoff.

Section 7.6. Temporary Layoff / Short Workweek

7.6(a) It is the Company’s intent to the fullest extent possible to retain direct engineers over contract labor during times of temporary layoffs and reduced workweeks. No engineer shall be placed on a temporary layoff or reduced workweek while Contract personnel are still employed in their Skill Classification, except when the Company determines that it needs to retain any key contract labor in order to avoid significant customer disruption or impact on the Program. In such cases, the approval of the Human Resource leader and the appropriate senior level executive shall be required. Within thirty (30) days of contract execution, the Company shall provide the Union with a listing of key contract labor, and shall update said list as necessary, but no less frequently than quarterly. The list of the key contract engineers shall be no greater than 5% of the total number of the engineers employed in the bargaining unit on the first day of the quarter. Temporary layoffs and reduced workweeks will not be utilized within the same rolling twelve (12) month period for any individual engineer, excluding holiday plant shutdowns.

7.6(b) Management, with bona fide requirements, can conduct temporary layoffs without regard to retention. Temporary layoffs will be voluntary whenever practical, shall be in increments of at least one week at a time (excluding holiday plant shutdowns), and will not be more than thirty (30) consecutive calendar days and not more than sixty (60) calendar days during the life of this contact for any individual engineer. Employees on a temporary layoff will receive health and welfare benefits during such layoff.

7.6(c) If deemed necessary to avoid a layoff, management will ask for volunteers but may in its discretion schedule short workweeks of not less than 24 hours for a period not to exceed sixty (60) consecutive calendar days and not more than one hundred and twenty (120) calendar days during the life of the contract for any individual engineer. Health and welfare benefits will not be prorated during this time period.

Section 7.7 Exceptions to Foregoing Procedures.

7.7(a) The Company may lay off engineers without regard to the provisions of the layoff procedures set forth in this section, provided the number of such layoffs per month does not exceed 0.25% (one quarter of one percent) of the total number of engineers employed in the bargaining unit on the first day of that month.

7.7(b) In instances where in the opinion of the Company the layoff procedures set forth in this section do not achieve the objectives stated in 7.3, exceptions thereto, without any limitation as to the number, may be made not more than one time during the contract term when approved by the Chief Executive Officer or designated representative. It will be the responsibility of any supervisor who recommends such an exception to prepare and transmit, a detailed report of the proposed exception(s) and the reasons therefore. An explanation, prior to implementation, will be provided to the Union.

Section 7.8. Layoff Notice

The Company will give at least two (2) weeks notice prior to layoff to the engineers affected, except when the layoff is caused by unexpected events (WARN Act definition), termination of a Government or other production contract, or when the affected engineers are absent.

Section 7.9. Layoff Status

7.9(a) Maintenance of Layoff Status

7.9(a)(1) Each engineer laid off under the provisions of this Article will remain on layoff status for a total period of three (3) years from the date the layoff was effective, subject to 7.9(a)(2).

7.9(a)(2) An engineer shall remain on layoff status in accordance with Section 7.5, provided he or she does not:

7.9(a)(2)a Fail to respond to a formal offer from the Company of a job within ten (10) workdays after it is extended or by such later date as may be stipulated by the Company, or

7.9(a)(2)b Refuse a formal offer from the Company for a full-time job within the bargaining unit or in the same labor market area from which laid off, for which the salary or level offered is equal to or greater than the engineer's salary at the time of layoff plus the inflation adjustment in effect at the time of layoff, or

7.9(a)(2)c Fail to report to work within ten (10) workdays following acceptance of a formal Company offer or on such later date as may be stipulated in the Company offer, or

7.9(a)(2)d Elect retirement thereby removing themselves permanently from layoff status.

7.9(a)(3) Engineers removed from layoff status for any reason other than retirement or expiration of the three (3) year period following layoff will be notified in writing of such removal, and the reasons therefore, by the Company.

7.9(a)(4) Laid off engineers who are prevented from meeting the conditions described in 7.9(a)(2)a, 7.9(a)(2)b or 7.9(a)(2)c solely due to medical disability, verified to the Company's satisfaction by their personal physician, shall upon request be granted a waiver for the missed requirement(s).

7.9(b) Return to Active Employment

7.9(b)(1) It is a mutual objective of the Company and the Union that laid off engineers who have not been determined ineligible be recalled to active employment, and a mutual desire that such recall into the Company the laid off employee be offered in approximate reverse order from the Job Classification from which the engineer was laid off.

7.9(b)(2) At the time of layoff, the Company automatically will place in the file for priority consideration return to active employment the names of all laid-off engineers. In order to maintain such recall status, the engineer must keep the Company informed of his or her interest in returning to active employment by submitting a letter so stating. The employee must register by letter at time of layoff and no later than December 31^st of each calendar year following the year in which the layoff occurs. Such letter must contain the individual’s name, employee identification number, address, and telephone number. The Company’s sole obligation to provide notice of recall shall be to send a certified letter to the last mailing address provided by the engineer.

7.9(b)(3) Prior to hiring from outside the Company, the Company shall extend job offers to those eligible on the recall list. Nothing in Article 7.9 will preclude the Company from hiring from sources outside the Company when projected requirements exceed the number of engineers in applicable job classifications eligible to be recalled from the priority recall list.

7.9(b)(4) If any engineer on layoff status disputes his or her recall status as reflected in Company records, Company records shall prevail unless rebutted by either (a) a Company receipt, or (b) a properly addressed U.S. Postal Service return receipt evidencing filing of the salaried payroll employment availability form (or letter) during the calendar period in question.

7.9(c) Salary and Level of Returning Laid-Off Engineers. Company offers extended to laid-off engineers for return to active employment in the same area will be, at a minimum, the salary and level from which laid off. The Company will review salary on a case by case basis and make adjustments as appropriate. Rejection of a formal Company offer for a position outside the bargaining unit or in a labor market area other than from which laid off will not be cause for removal from layoff status.

7.9(d) Retiree Medical eligibility. Engineers who are on layoff status may credit up to 30 months of time spent on layoff towards eligibility for retiree medical benefits.

7.9(e) Record maintenance. The Company will maintain a record of all laid-off engineers who are on layoff status under the above provisions.

Section 7.10. Designated Employees

7.10(a) The Company may designate employees who either will be declared ineligible for first consideration recall rights or will not receive a service adjustment or both. Any such designation shall be subject to the following requirements:

7.10(a)(1) Designated employees will be identified as part of the retention rating process and advised orally and in writing that, in the event of layoff during the period of time between performance reviews, either they will have no first consideration recall rights or will not receive a service adjustment or both.

7.10(a)(2) Designated employees must have an assigned Category C retention rating.

7.10(a)(3) Designated employees will be identified by engineering skill teams.

7.10(b) Employee Improvement Action Plan

Employees who have been identified as “designated” will be provided with an Employee Improvement Action Plan within thirty (30) calendar days of the designation, which will identify the specific conditions leading to the designation and improvements necessary to avoid such designations in the future. Management and the employee will have on-going discussions about the employee's progress in achieving the objectives outlined in the action plan. The Company will promptly notify the Union of the identities of designated employees. The identification of designated employees shall not be subject to Article 3; however, designated employees may appeal the designation regardless of their previous retention index rating in accordance with Section 7.5(a)(2). Designations pursuant to this section will remain in effect until the next scheduled retention rating review exercise or until the employee satisfactorily completes the Improvement Action Plan and has been removed from designation.

7.10(b)(1) All employees have the opportunity to request an Employee Improvement Action Plan within thirty (30) calendar days of being informed of their retention rating.

Section 7.11. Temporary Recall

7.11(a) The parties acknowledge that Article 8 limits the use of contract personnel during workforce reductions or when engineers are on active recall status. The parties acknowledge further that occasionally situations arise when short-term assignments require additional staffing. The Company could choose to contract out these work packages. The Company in its sole discretion has from time to time preferred to have this work performed by engineers on active layoff status. In recognition of the fact that the work under discussion involves short-term assignments, the parties agree to the implementation of the process described immediately below.

7.11(b) The process shall be known as Temporary Recall and shall be defined as the temporary re-employment of individuals on active layoff status (hereinafter "engineers").

7.11(c) Temporary Recall assignments may be designated for specific programs or projects whose normal maximum will be six (6) months. Assignments will normally be full time (average eighty (80) hours in a pay period).

7.11(d) The Company will determine which engineers will be offered Temporary Recall assignments. Temporary Recall will be strictly voluntary on the part of the engineer. Refusing to consider an engineer for Temporary Recall or an engineer's rejection of an offer of Temporary Recall will not affect the engineer's active layoff status.

7.11(e) Temporarily-recalled engineers will receive the same salary they were receiving prior to layoff.

7.11(f) Eligibility for coverage for medical/dental insurance, life insurance, accidental death and dismemberment insurance, business travel accident insurance, long-term and short-term disability insurance, and voluntary personal accident insurance begins on the first day which the re-employment commences.

7.11(g) With regard to the Retirement Plan, unused sick leave, and Earned Time Off, engineers on Temporary Recall will be set up in the system based on their respective layoff/recall circumstances. This will include the reactivation of unused but earned credits and the generation of future benefits consistent with standard policies. 401(k) Plan contributions may be resumed, beginning upon recall.

7.11(h) Company service will be earned beginning the first day back on the active payroll.

7.11(i) Active layoff status will not be interrupted. Filing requirements once during each year for first consideration recall status will remain.

7.11(j) Engineers on Temporary Recall will not receive a retention index based on Temporary Recall assignments.

7.11(k) Engineers on Temporary Recall will generate funds for a selective adjustment exercise if they meet contractual criteria.

7.11(l) Engineers on Temporary Recall will not be eligible for additional layoff benefits when their Temporary Recall assignment ends.

7.11(m) Engineers on Temporary Recall are not eligible to apply for internal job postings.

Section 7.12. General Provisions

7.12(a) Compensable Injuries. Any engineer who has been wholly or partially incapacitated for that engineer's regular work by compensable injury or compensable occupational disease while in the employ of the Company may, while so incapacitated, be employed in work which the engineer can do without regard to the provisions of this Agreement. The Union shall be notified of persons to whom this waiver applies and the effective dates of such waiver.

7.12(b) Veterans. The Company and the Union, recognizing that the reemployment rights of engineers entering or inducted into the Armed Forces of the United States are the subject matter of legislation, agree that nothing contained in this Agreement will preclude the Company from reemploying such engineers in compliance with provisions of applicable laws.

7.12(c) Transfer Return Rights. An engineer who is transferred by the Company from the bargaining unit described in Article 1 of this Agreement to another SPEEA-represented bargaining unit, and at the time of such transfer is accorded return rights by the Company in writing, will not be laid off while assigned at such other unit, but will be transferred back to the original unit in accordance with the return rights previously accorded by the Company. An exception will be made if the engineer elects to be laid off in which case the engineer will waive transfer return rights.

Section 7.13. Reclassification to a Lower Level at Employee’s Request or in Lieu of Layoff

7.13(a) The Company may at the engineer's request effect a reclassification to a lower level.

7.13(b) The Company may offer an engineer a reclassification to a lower level in lieu of layoff.

Section 7.14. Acting Supervisors

The Company agrees to inform the Union in a timely manner when it intends to use a member of the bargaining unit as an acting supervisor. If the engineer remains as an acting supervisor for more than six (6) consecutive months, the engineer shall be reclassified to management or returned to his or her bargaining unit position. Deviations shall require the consent of the Union.

Section 7.15 Probationary Period

Engineers may be terminated within the first ninety (90) days of employment for any reason deemed appropriate by management.

Section 7.16 Secondary Skills

The Company will give consideration to primary and secondary skill codes assigned to engineers when making reassignments associated with a reduction in force.

ARTICLE 8
CONTRACT LABOR AND SUBCONTRACTING

Section 8.1. Contract Labor

A. Purpose. The Company and the Union recognize that Contract personnel are a practical source of skilled temporary labor that allows the Company to acquire skilled professional and technical support in a timely manner. The Company and Union recognize that requirements for experienced Contract personnel must be balanced with the need to build and maintain the experience base and to support our mutual objective of workforce stabilization by minimizing engineering layoffs.

B. Definition. The term, contract personnel, refers to temporary personnel supplied by another business entity to perform work on Company premises under the daily control and supervision of Company management. The business entities that provide contract personnel normally are in the business of providing temporary services (such as temporary employment agencies and staffing firms). Sources of contract personnel may also include businesses in the aerospace or related fields that make their personnel available for temporary labor (so called 'industry assist' arrangements). Excluded from the definition of contract personnel are consultants and their employees and employees of subcontractors or vendors.

Section 8.2. Procedures and Limitations

8.2(a) The Company shall notify the Union of the basis for the need, the approximate number of Contract personnel required and the Job Classification normally held by engineers performing the type of work involved during the quarterly Labor/Management business meeting.

8.2(b) If based on a variety of factors (including but not limited to the nature of the assignment, the status of the program, the overall need for the skills at issue, and the purpose of using Contract personnel described above) the Company needs the skills supplied by Contract personnel on a long-term basis, the position shall be made available in accordance with the Company job posting process.

8.2(c) The Company and the Union agree that it is normally inappropriate to hire Contract personnel as direct hires in periods of surplus activity within a Job Classification. Deviations will be subject to approval by the appropriate senior-level executive and provided, in writing, to the Union. The granting of a deviation to allow such hiring shall not be subject to the grievance and arbitration process.

8.2(d) Contract personnel shall not be authorized to make decisions normally associated with management responsibility including salary determination, retention and discipline. They shall not be assigned lead positions for a period in excess of six (6) months. Individual contract personnel may not perform work for the Company for more than eighteen (18) consecutive months without the written approval of the Chief Technology Officer and this decision shall be reviewed no less frequently than every six (6) months.

8.2(e) No engineer shall be laid off while Contract personnel are still employed in the Skill Classification, except when the Company determines that it needs to retain any contract labor while surplusing employees in order to avoid significant disruption or impact on the committed packages of work. In such cases, the approval of the Human Resource leader and the appropriate senior level executive shall be required. Notification of such decision will be provided to the Union as soon as practicable.

8.2(f) Engineers will not be laid off until their skills have been reviewed to determine if they can replace contract personnel in other than their job classifications.

Section 8.3. Data

On request, the Company shall supply the Union with data that displays the number of contract personnel utilized by Job Code, so that compliance with all limitations identified in 8.2 can be monitored. The data shall include names, Job Classifications as applicable, organizations, and start dates.

Section 8.4. Subcontracting

The Company and the Union agree that subcontracting, market access/offset agreements or other assignments of work may be a part of the Company’s business strategies. The Company will provide the Union with advance notification and opportunity for discussion concerning any significant movement of customer work and the reasons for the movement.

ARTICLE 9
COMPANY-UNION COLLABORATION

Section 9.1. Cooperative and Collaborative Relationship

9.1(a) The Union and the Company believe that a relationship built on cooperation will be beneficial to the Company and its employees. This Article is intended to describe the process by which the Company may seek input from the Union. The Company and the Union may discuss suggestions, issues, or other matters either party wishes to present, provided that neither party shall be required to discuss any item brought up by the other party nor be bound to act upon any item presented or modify or change any provision of this Agreement. However, both parties agree to discuss informal grievances and complaints.

9.1(b) Should either party desire to discuss with the other any matter affecting generally the relationship of the parties, a meeting of Union and management representatives shall be arranged upon request of either party. Such meeting shall take place at a time mutually convenient to both parties. Any use of Company time for attendance at such meetings shall be arranged in advance by mutual agreement.

Section 9.2 Joint Collaboration Committee (JCC) for Labor-Management Cooperative Initiatives

The parties will establish a joint committee to confer on labor management initiatives the parties undertake. These joint initiatives are intended to enhance and develop employees as the Company's key resource and improve productivity and efficiency. The JCC’s responsibilities may include: (1) establishing subcommittees to confer on the initiatives; (2) reviewing, expanding initiatives where appropriate and resolving issues related to ongoing initiatives; and (3) formulating future labor-management cooperative initiatives. The Company at its sole discretion will provide administrative staff and appropriate funding to support the initiatives. To create a proper environment for the committee's work, no aspect of the committee's proceedings shall be used as the basis for, or as evidence in, any proceedings under Article 3.

9.2(a) Committee membership: The Joint Union-Company Collaboration Committee shall consist of up to five (5) persons representing the Company and up to five (5) persons representing the Union. The Company representatives will be appointed from the Business Unit(s) and Human Resources management. The Union representatives will be selected from the bargaining unit’s membership. Each party shall appoint a chairperson of its group.

9.2(b) Business Overviews. The Joint Collaboration Committee will meet quarterly so that the Company may share information about Company business plans such as workforce planning, business outlook, facility and safety issues, subcontracting, surplus activity, employment of contract engineers, and other areas of interest as agreed to by the parties. Meetings shall be attended by appropriate Union, Human Resources and Business Unit Representatives. These quarterly meetings will be scheduled in January of each year.

9.2(c) The Joint Collaboration Committee may confer on the following topics:

· Methods of improving productivity, efficiency, cost effectiveness, and meeting business goals

· Initiatives to find cost savings in health care expenditures.

· Review proposed changes to the job descriptions and job structure.

· Monitoring and exploring developments in the areas of education and training, skill utilization and application, and career development as those link to emerging technologies.

· Monitoring developments in the areas of use of compensatory time off, child and elder care, Drug and Alcohol-Free Workplace Program, and the Employee Assistance Program.

· Exploring alternate forms of compensation and delivery methods, salary planning process, market relationships and compensation philosophy.

· Discussion groups on topics of mutual interest.

· Exploring healthcare costs, issues and plan details.

· Career Enhancement, including:

· Programs to provide engineers the information, training, and opportunity to influence their career direction.

· A program to provide a meaningful career alternative for those engineers who choose to remain on a technically oriented career path (as opposed to a managerial track).

· Coordination with related activities to maximize efficiency and involve appropriate people and viewpoints as required.

· Review the Company’s employee transfer process.

· Conducting briefings on the Company's plans for the introduction of new technological change and products that may affect engineers, including schedules of introduction and areas of skill impacts.

· Planning, developing, implementing and evaluating pilot projects involving innovative approaches in the workplace aimed at improving the quality of work life and productivity.

· Reviewing on a quarterly basis, if requested, data regarding overtime worked by engineers.

9.2(d) The Joint Collaboration Committee shall meet as often as its members agree, but in no event less than quarterly. The Company and Union chairpersons will establish committee meeting locations, agendas and procedures.

ARTICLE 10
HOURS OF LABOR

Section 10.1. Regular Hours

10.1(a) A regular work day and work shift shall be eight (8) hours and a regular work week shall be forty (40) hours. The regular schedule of hours shall be as follows: First (daylight) Shift: start time will be from 4:00 A.M. to 11:59 A.M.; Second Shift: start time will be from 12:00 P.M. to 7:59 P.M.; Third Shift: start time will be from 8:00 P.M. to 3:59 A.M., (seven (7) hour shift, thirty (30) minute unpaid lunch) on Monday, Tuesday, Wednesday, Thursday, and Friday. The Company shall assign the initial start times as stated above.

10.1(b) Variable work schedules can be established to meet business requirements. Any such change in work schedules will be reviewed with the Union.

10.1(c) Management may allow engineers to volunteer for variable work schedules (e.g., four (4) 10-hour days; Thursday through Monday work week) as warranted by business need.

Section 10.2. Shift Premiums

An engineer who works second or third shift shall be paid a shift premium of seventy-five cents ($.75) per hour. An engineer who works third shift of six and one-half (6 ½) hours will receive an adjustment equivalent to one and one-half hours' pay at his base rate. A prorated portion of that adjustment will be paid when the engineer works less than six and one-half hours on a regular third shift.

Section 10.3. Work Schedule Premiums

10.3(a) An engineer assigned to either Saturday or Sunday as a regular day of work will receive two dollars fifty cents ($2.50) per hour in addition to Base Rate of pay for hours worked on Saturday and/or Sunday.

10.3(b) Engineers may, at their request and with management approval, work any variable work week schedule. Engineers working schedules at their request, and in the absence of a company requirement for such a schedule, will not be eligible for the work schedule premiums.

Section 10.4. Shift Preference or Variable Work Week Schedule

10.4(a) When staffing a shift or variable work week schedule, the Company maintains the right to assign engineers necessary to accomplish the work, including the right to assign engineers with key skills regardless of their shift preference. The Company will attempt to complete such staffing from volunteers, assignments from other shifts in reverse seniority order, promotions and new hires.

10.4(b) Where appropriate, the engineer and management shall agree to flexible work schedules to accommodate personal or business needs.

Section 10.5. Overtime Pay

10.5(a) Engineers will be paid additional pay for hours worked in excess of forty-four hours worked in a workweek. The hourly rate to be paid for such hours will be straight time plus $6.50 per hour.

10.5(b) It is the policy of the Company to permit employees to flex the first four hours of non-weekend overtime. If it is not possible to flex the time during the workweek, then such time as cannot be flexed shall be credited to a Compensatory/Incidental Time (CIT) Bank which may be used at the employee’s discretion. So far as practicable, the Company will attempt to schedule all CIT time off for the period for which the employee expresses a preference.

10.5(b)1 When 24 hours of CIT has been accrued, no further time shall accrue until CIT has been used. When the CIT bank is at 24 hours, until further accrual is possible, employees will be paid additional pay at straight time plus $6.50 per hour for hours 41 through 44 in the workweek. Management has the right to direct that CIT time be used.

10.5(b)2 Employees shall not be entitled to be paid in lieu of taking CIT off.

10.5(c) Engineers will be paid additional pay for any scheduled overtime worked on Saturday, Sunday or holidays, and for any emergency call out (e.g. Liaison). The hourly rate to be paid for such hours shall be straight time plus $6.50 per hour.

Section 10.6. Reporting Pay

If an engineer reports for work in accordance with instructions, he shall receive a minimum of eight (8) hours pay at his Base Rate plus shift premiums where applicable. This will not apply in case of emergency shutdowns arising out of any condition beyond the Company's control. An engineer who leaves work of his own volition, or because of incapacity (other than industrial injury or illness), or is discharged or suspended after beginning work, will be paid only for the number of actual hours worked during that day. An engineer who leaves work because of incapacity due to industrial injury will be paid eight (8) hours pay at his Base Rate plus shift premiums where applicable.

Section 10.7. Call Back Pay

A minimum of four (4) hours pay at the applicable overtime rate will be paid for any call back work performed outside of one's regularly scheduled hours. An engineer who leaves work of his own volition, or because of incapacity (other than industrial injury or illness), or is discharged or suspended after beginning work, will be paid only for the number of hours actually worked during that day. An engineer, who leaves work after call back, will be paid only for the number of hours actually worked unless authorized by management.

Section 10.8 Overtime Scheduling

It is the intent of the Company to distribute overtime as equally as reasonably practicable in light of the work to be performed by shift, classification, and skill. Both the Union and the Company recognize that the engineers who are assigned the work must be qualified to perform the specific work. The Company will strive to meet its overtime requirements on a voluntary basis when practical. In the event there are insufficient qualified volunteers to meet the requirement, Management may designate and require the necessary number of engineers to work overtime.

10.8(a) Accordingly, the Company and the Union agree, subject to the exceptions noted below, that no engineer shall normally be required, and need not be permitted, to work more than 144 overtime hours in any budget quarter, more than 576 overtime hours in a twelve-month period, more than three (3) weekends consecutively without the next weekend off, or more than eight (8) hours on a Saturday or a Sunday or other regularly-scheduled day of rest. Overtime work on either a Saturday and a Sunday, or a Saturday or a Sunday, shall constitute a weekend worked. All overtime on a holiday as set forth in the Agreement or on the weekend which immediately precedes a Monday holiday or immediately follows a Friday holiday shall be voluntary for those on weekday work schedules.

10.8(b) All overtime in excess of the above limits shall be strictly on a voluntary basis and no engineer shall suffer retribution for his refusal or failure to volunteer. An engineer may be required to perform overtime work beyond the above limitations where necessary for delivery of Company products to a customer, where necessary for the timely submission of proposals where related to customer-requested emergency repair of delivered products, or for Government DX or Government DO rated orders.

.

ARTICLE 11
LEAVES OF ABSENCE AND JURY/WITNESS DUTY

Section 11.1. Authorized Leaves of Absence

Leaves of Absence will be granted in accordance with the Family and Medical Leave Act (FMLA) and the Company local policy. Engineers are required to use available earned time off concurrently with their FMLA absence. In such cases, all engineers shall be entitled to retain up to eighty (80) hours of earned time off for other use. Other leaves of absence may be granted to any engineer with a minimum of ninety (90) days active service for any reason deemed satisfactory to the Company or as required by law. Where practical, a request for a leave of absence must be made in writing to one's supervisor five (5) working days prior to the beginning of the leave.

Section 11.2. Leave of Absence Condition

An engineer, while on leave of absence, shall be deemed to have voluntarily resigned from the Company upon accepting other employment, or engaged in business for himself that prevents his return from leave, or is inconsistent with the medical or other limitations that provide the basis for the engineer’s leave of absence from the Company.

Section 11.3. Military Leave of Absence

An engineer who is a member of a reserve component of the United States Armed Forces or a State’s National Guard, who is absent due to required active annual training duty or temporary special services duty, shall be paid Base Rate plus shift premiums where applicable, up to a maximum of ten (10) workdays each calendar year. An engineer who, because of schedule adjustments by the reserve component, receives orders to report for two (2) training periods in one (1) calendar year may receive time off with pay in excess of the ten (10)-day annual maximum provided that the total time off with pay does not exceed twenty (20) workdays in a two (2) consecutive year period (either current and previous calendar years or current and following calendar years) and the engineer was a member of the reserve component during both of the applicable consecutive years. Engineers with military orders to serve additional days of duty will be placed on unpaid authorized leave of absence. The amount due the engineer under this Section shall be reduced by the amount received from the government body identified with such training duty or services, for the period of such duty (up to the maximum period mentioned above). Such items as subsistence, uniform and travel allowance shall not be included in determining pay received from state or federal government. Members of a reserve component of a uniformed service ordered to temporary special duty under Military U.S. Code Title 10 or mobilized by the applicable state agency are eligible for military differential pay up to a maximum of ninety (90) calendar days for each occurrence.

Section 11.4. Jury/Witness Duty

When an engineer is required to report for jury duty, or compelled to testify in a case brought by someone other than the engineer or on his behalf, on his regularly scheduled workday, the engineer shall receive eight (8) hours pay at his Base Rate plus shift premiums where applicable. Engineers who report for jury/witness duty but are excused, are expected to return to work if more than one-half (½) of their shift remains. Engineers shall receive holiday pay if a holiday occurs while on jury/witness duty. Proof of such service satisfactory to the Company must be given before this Section shall apply. Time spent on jury/witness duty is not to be counted as absenteeism for purposes of disciplinary action.

ARTICLE 12
JOB CLASSIFICATIONS AND SALARIES

Section 12.1. Job Classifications

It is agreed that it is the right and responsibility of Management to establish new job classifications, or eliminate existing classifications, and establish the appropriate pay rate for such classifications. Any such change in classifications will be reviewed and discussed with the Union at least thirty (30) days in advance of its establishment.

12.1(a) Definition: The term “Job Classification” shall be used to classify similar or related work activities that constitute a position of employment based on primary assignment, common products or processes, and engineer skills. There will be elements of the job classification that from time to time the Company may use for varying purpose.

12.1(b) Individual Engineer's Job Classification or Skills Management Code Review. An individual engineer may request a review of his or her job classification or level based on the contention the work assigned by the Company differs from the job classification or skills management code to the extent and in such a manner as to warrant reclassifying the engineer to a different existing job classification or skills management code. Engineers will attempt to resolve classification first by discussion with first-line management. In the absence of a resolution mutually agreeable to both management and the engineer, the following steps will be utilized in the review process:

12.1(b)(1) If the engineer contends that a classification or level issue still exists, he or she along with his or her Union Representative will notify the Engineering Skill Team Manager to request a review.

12.1(b)(2) The Skill Team Manager will meet with the engineer and the Union Representative to fully discuss the engineer's issue in an effort to reach mutual resolution.

12.1(b)(3) If the engineer and Union Representative do not agree with the Skill Team decision, the Engineering Skill Team Manager, the appropriate Human Resources Representative and the Union Representative will meet to resolve the matter by a majority decision.

Section 12.2. Classifications

When, pursuant to the provisions of Article 1, the Company classifies an individual as an Engineer in one of the classifications listed in Section 1.1(a), it will give consideration to the nature of the work involved and the qualifications of such individual. Inclusion in these classifications shall be limited to those employees who, in the performance of their assigned work, regularly apply engineering disciplines to the research, design, development, test and evaluation of Company products or processes, and who satisfy the definition of "professional employee" as stated in Section 2(12) of the National Labor Relations Act as set forth below:

“(a) any employee engaged in work (i) predominately intellectual and varied in character as opposed to routine mental, manual, mechanical, or physical work; (ii) involving the consistent exercise of discretion and judgment in its performance; (iii) of such a character that the output produced or the result accomplished cannot be standardized in relation to a given period of time; (iv) requiring knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction and study in an institution of higher learning or a hospital, as distinguished from a general academic education or from an apprenticeship or from training in the performance of routine mental, manual, or physical processes; or

(b) any employee, who (i) has completed the courses of specialized intellectual instruction and study described in clause (iv) of paragraph (a) and (ii) is performing related work under the supervision of a professional person to qualify himself to become a professional employee as defined in paragraph (a).”

This Section shall not be construed as affecting the Company's unilateral right to select and determine the employees to be included in each classification listed in Article 1, which right shall not be subject to Article 3.

Section 12.3. Base Rate

“Base rate” is an engineer's hourly rate of pay, excluding all, allowances, awards, bonuses, and premiums.

Section 12.4. Salaries

Salaries are set forth by Job Family, Job Title and Rate Table in the Company’s compensation web site or other accessible means.

Section 12.5. Rate Range and Discretionary Market Salary Increases

The Company will establish and fully distribute salary adjustment funds in accordance with the dates set forth below. No increase adjustments to base pay will exceed the established Base Rate Range maximum. Engineers at rate maximums may receive lump sums in lieu of base salary increases. These lump sum increases will charge to the salary adjustment fund.

TABLE I

SELECTIVE MARKET SALARY ADJUSTMENT FUND COMPUTATION DATES, EFFECTIVE DATES, AND INCREASE PERCENTAGES

Review Period	Fund Computation Date	Increase Effective First Full Payperiod Following	Increase Percentage	Minimum Increase
1	02/26/2010	07/01/2010	0.0%
2	02/25/2011	07/01/2011	Market, with a fund minimum of 1.0%	If Market Adjustment is greater than 3.0% , minimum increase of $750 per employee
3	02/24/2012	07/01/2012	Market, with a fund minimum of 1.0%	If Market Adjustment is greater than 3.0% , minimum increase of $750 per employee

12.5(a)1 The “Market” rate for the 2011 and 2012 salary increases are to be determined by reviewing a number of factors which include:

• The relative position of salaries to the market which is called the comparatio. Generally, the Company will be trying to achieve an average 0.97 comparatio after salary adjustments have been made.
• The estimated market salary escalation as determined by the SIRS poll or other like salary survey.
• Consideration will be given for local, regional, and national market positions segmented by Aerospace Industry – High Tech groups. The Company will share the names of the companies included in the High Tech groups with SPEEA on an annual basis.
• A trend analysis (Summarized to comply with Agreements from Survey Providers) will be prepared by the Company and shared with SPEEA on an annual basis.
• Consideration of mitigating factors which would include market differentiation and the relative leveling of positions.
• Any other relevant factors which the parties agree upon.

The Company will look at these factors, consult with the union and determine the increase percentage. The final determination shall be made by the Company and shall be not subject to the grievance and arbitration procedure detailed in Article 3.

12.5(a)2 Payable on the last pay check in June 2010, engineers on the active payroll at that time shall be paid a 3% lump sum based upon their individual annualized base salary. For instance, if an engineer’s base salary is $70,000/year, the engineer will be paid a lump sum of Twenty One Hundred Dollars ($2,100.00). This payment is a guaranteed advance on the 2010 Performance Bonus Plan payment detailed in paragraph 12.7 below.

12.5(b) Annually, the Company will provide a fund of one-half of one percent (0.5%) of the total unit salaries as of Fund Computation Date of the salary increases, to manage both salary growth and promotions based upon the business needs of the Wichita site. Funds unspent during the period will be added to the next salary adjustment fund.

Section 12.6. Eligibility

Eligible engineers are those who were in the bargaining unit and on the active payroll on both the fund computation date and the increase effective date.

Section 12.7. Performance Bonus Plan

12.7(a) The Company intends to pay a performance bonus when financial performance equals or exceeds the established targets. Beginning with the 2010 Plan Year, employees covered by this collective bargaining agreement will participate in the Spirit AeroSystems Holdings, Inc. Incentive Award Plan for Salaried Employees (M&S Bonus Plan), as it may be amended from time-to-time. Targets will be the same as in the existing M&S Bonus Plan or any changes to the existing plan during the duration of this agreement. Payments will be as follows:

· Plan Year 2010: 5% of Eligible Base Pay at Target and 10% of Eligible Base Pay at Maximum, less June 2010 Lump Sum Advance.

· Plan Year 2011: 6% of Eligible Base Pay at Target and 12% of Eligible Base Pay at Maximum

· Plan Year 2012: 6% of Eligible Base Pay at Target and 12% of Eligible Base Pay at Maximum

12.7(b) Nothing will prevent the Company from making payments in excess of those provided.

ARTICLE 13
UNION OFFICIALS

Section 13.1. Union to Furnish List of Officials

The Union shall inform the Company in writing of the names of its officials (not more than one (1) Council Representative per two hundred (200) engineers, or major fraction thereof) who are accredited to represent it, which information shall be kept up to date at all times. Only persons so designated will be accepted by the Company as representatives of the Union. The total number of Council Representatives shall always be an odd number and rounded up.

Section 13.2. Union Officials - Access to Plant

The Union Leadership and Staff Representatives, not employed by Company, will be permitted access to the Company’s facility during normal working hours. The Union will provide advance notification to the Company of such visits. Such visits shall be subject to such regulations as may be made from time to time by any governmental or government affiliated agency of the United States, other customers, or the Company. The Company will not impose regulations that are designed to exclude the Union Leadership and Staff Representatives from the plant or render ineffective the intent of this provision. No union meetings involving more than forty (40) will occur on company property without express written permission.

Section 13.3. Union Activity During Working Hours

The Company agrees not to discriminate in any way against any engineer for Union activity, but such activity shall not be carried on during working time, except as specifically allowed by the provisions of this Agreement.

Section 13.4. Bulletin Boards

The Union shall have the right to use designated bulletin boards on the Company property for the purpose of posting notices of Union meetings and other activities which are officially approved by the Union prior to posting.

Section 13.5. Time Working Union Issues

Each engineer, before leaving his or her assigned work on Union business, shall have authorization from the Union and shall notify his or her supervisor prior to taking such leave. The Union shall provide to the designated Company Representative oral confirmation of such authorization at least one day prior to such leave and written confirmation immediately thereafter.

13.5(a) SPEEA-paid Time. Time worked for union-related issues, limited to regular working hours, shall be charged to a special charge account number and the Union agrees to reimburse the Company at the engineer's regular hourly rate for all such time so spent.

13.5(b) Employer-paid Time. Time worked for contract-related issues, limited to regular working hours, shall be charged to an employer charge account number that identifies the organization in which the contract-related issue is worked.

Section 13.6. Grievance and Contract Administration

13.6(a) The Union shall investigate and adjust grievances, perform contract administration, support engineer disciplinary hearings and conduct information sharing meetings with bargaining unit members in the work area, exclusively through Executive Board members and Council Representatives, who shall be engineers, and Union Staff Representatives.

13.6(b) Each Executive Board Member and Council Representative shall notify and obtain permission from his or her supervisor before leaving the work assignment for the purpose of investigating complaints or claims of grievance on the part of engineers in his or her work area. Such permission shall be granted except where the supervisor considers such absence would seriously interfere with the performance of the group of which the representative is a part. Time spent on such approved investigations and discussions shall be considered work time provided such activity does not extend beyond the time that the supervisor considers reasonable under the circumstances. Any Executive Board Member and Council Representative in the conduct of his or her investigation, and before contacting an engineer, shall obtain permission of the supervisor of such engineer and advise the supervisor of the nature of the complaint or grievance and the estimated time required for the discussion. Such permission shall be granted except where the visit would seriously interfere with the work of the group. Except as provided in 13.7(a) and 9.1(b), all time spent performing such Union business as well as time spent in joint committee and partnership activities shall be handled in accordance with the Company’s overhead charging process and shall not be docked from the employee’s pay.

Section 13.7 Leaves of Absence

13.7(a) Duration. Leaves of absence of at least thirty (30) days without pay shall be granted for the following reasons:

· Full-time employment by the Union or its national organization.

· Union business authorized by the Executive Board and approved in writing by the designated Company Representative, which approval shall not be withheld absent legitimate business circumstances.

13.7(b) Return from Leave of Absence. The Company will reinstate engineers on such leaves at not less than his or her former grade level and salary. The Company will review salary on a case by case basis and make adjustments as appropriate.

Section 13.8. Substitute Council Representative

In the absence of a Council Representative for any reason, the Union may designate a temporary substitute.

Section 13.9. Protection of Union Officials

13.9(a) Executive Board members and Council Representatives shall not be laid off during their respective terms of office except as described herein.

13.9(a)(1) Executive Board members and Council Representatives will be given a retention rating while serving during their term of office that will be adjusted to indicate that the engineer is at the top of the highest retention rating in the applicable skill or job activity code. So rated, the Representatives will be subject to all terms and conditions of Article 7 of the parties' Agreements. Once the Representatives are no longer in office, the retention rating will be readjusted to the otherwise applicable rating.

13.9(a)(2) If Council Representatives are relocated, due to transfer or otherwise, out of the district in which they were elected, the Representatives will continue to be protected from layoff for the balance of their term of office so long as they remain recognized members of the Council. Each designated Council position can be filled by only one member.

13.9(a)(3) Nothing herein precludes an Executive Board Member or Council Representative from requesting a voluntary or accelerated layoff.

13.9(a)(4) Layoff protection does not apply to Executive Board members and Council Representatives who, at the time of election or appointment, have received an active advance notice of potential layoff, unless the Board of Members or Council Representative is running for reelection to a consecutive term of office.

13.9(b) In the event management deems it necessary to involuntarily transfer or loan a Council Representative, and other engineers then represented by the Council Representative would remain in the same skill code, when practicable the Company will inform the Union of the proposed transfer or loan thirty (30) days prior to its effective date and will discuss with the Union the feasibility of transferring or loaning another engineer.

Section 13.10. Union Requests for Employer Data

The Company will provide the data to the Union which is listed in the memorandum from the Union to the Company effective June 30^th 2005, subject to such revisions in the future as may be made by mutual agreement of the parties. Nothing herein is intended to waive any right the Union may have to receive additional data.

Section 13.11. SPEEA Access to the Web

The parties hereby agree that SPEEA shall have access to the Company’s internal Web page. To that effect, the parties agree as follows:

13.11(a) SPEEA shall maintain the confidentiality of all information, data and computer programs ('Information Assets') to which SPEEA has access, along with any passwords or access procedures given to facilitate access to 'authorized SPEEA users'.

13.11(b) SPEEA shall only access the Information Assets specified by the Company Computing Access Focal Point, and then only in accordance with the access procedures.

13.11(c) SPEEA shall not access any other Information Assets not approved by the Company Computing Access Focal Point.

13.11(d) SPEEA shall not remove any Information Assets from Company computing systems, or delete, change or otherwise modify any Information Assets.

13.11(e) Access to Information Assets marked 'Company Limited' or bearing Government classified markings is strictly prohibited. The Company may re-evaluate access at any time. Any decision by the Company to withdraw access shall not be subject to the provisions of Article 3.

ARTICLE 14
PAYROLL DEDUCTION FOR UNION DUES

Section 14.1. Payroll Deduction for Union Dues

Whenever an engineer shall appropriately request in writing, the Company will deduct from such engineer’s pay each month dues payable to the Union. The Union will promptly notify the Company of any changes in the rate of dues during the term of this Agreement. The agreed forms for use by engineers in making a request for deduction, as well as form of notice of withdrawal, will be furnished by the Union. The Company will not deduct dues or discontinue dues deductions absent authorization from the engineer. In no circumstances shall the Company be held liable for the payment of any dues to the Union. The Company agrees to recognize all current and new authorization cards on file

ARTICLE 15
STRIKES AND LOCKOUTS

Section 15.1. Strikes and Lockouts

15.1(a) During the term of this Agreement neither the Union (including its officers, agents, representatives, and members) nor any engineer covered by this Agreement shall in any way, directly or indirectly, authorize, cause, assist, encourage, participate in, ratify or condone any strike (whether it be an economic strike, sympathy strike, unfair labor practice strike or otherwise) slow down, walk out, boycott, picketing, or any other interference with the Company’s operations by bargaining unit members, including any refusal to cross any other labor organization’s or other party’s picket line. Nothing in 15.1 shall require engineers to work in an unsafe environment. Any engineer who violates this Article may be subject to disciplinary action.

Consistent with the foregoing, during the term of the Agreement, the Union has the right to engage in informational picketing provided that such picketing does not have an effect of inducing any individual employed by any person in the course of his employment to refuse to pick up, deliver, or transport any goods, or not to perform any services.

15.1(b) The Union will make every effort to stop and discourage any action prohibited by Section 15.1. if it should occur and will keep the Company advised of its actions.

15.1(c) The Company agrees that there shall be no form of lockout during the term of this Agreement.

15.1(d) The Parties agree that violations of the no strike/no lockout provisions of this Article will cause irreparable harm and therefore they agree that either party may enforce the obligations of this Article by injunction action in the courts without any requirement that the grievance and arbitration procedure of this Agreement be invoked or exhausted. The parties further agree that the Company, at its option, may file a grievance alleging a violation of the no strike obligation of this article and the Union, at its option, may file a grievance alleging violation of the no-lockout obligation at Step 3 – Pre-Arbitration of the Grievance Procedure in Article 3.3.

ARTICLE 16
GROUP INSURANCE & RETIREMENT PLANS

The Company will continue until June 30, 2010, the Group Benefits Package agreed to in the collective bargaining agreement of July 11, 2005, between the Company and the Union. Thereafter, the Company will provide the savings plan, retirement plan, medical, dental, vision, retiree medical benefits and ancillary benefits for eligible employees and retirees and covered dependents of eligible employees and retirees as summarized in the document entitled Attachment A, or as otherwise stated, as the Group Benefits Package.

ARTICLE 17
HEALTH AND SAFETY

Section 17.1. Mutual Objective

It is the desire of both parties to this Agreement to maintain high standards of safety and health in order to eliminate, as far as possible, industrial accidents and illness. Both parties will continue to establish proactive, customer-driven programs and systems to support this mutual objective.

Section 17.2. Health and Safety In The Workplace

17.2(a) The Company shall maintain on all full shifts, an emergency first aid station.

17.2(b) The Company will furnish personal protective equipment as required by the Occupational Safety and Health Act.

17.2(c) The Company is committed to a tobacco-free work environment based on the evidence that tobacco smoke and second-hand smoke is detrimental to engineer health. Accordingly the interior spaces of all Company facilities are tobacco-free. The Company shall designate exterior spaces for smoking and use of other tobacco products. There shall be no use of tobacco products except in designated areas.

Section 17.3. Drug and Alcohol-Free Workplace

17.3(a) The Union and the Company recognize the value of working together to maintain the Drug and Alcohol-Free Workplace Program. This program has been established to promote a safe, healthy, and productive work environment. This program is intended to help prevent substance abuse through drug and alcohol/drug testing and enhanced engineer communication that emphasizes the importance of awareness and rehabilitation. By complying with state/federal laws, regulations and enforcing the Company prohibition against drugs and alcohol in the workplace, public confidence in Company products and services is maintained. Both parties commit to work together to create an environment which promotes a drug and alcohol-free workplace and adhere to the Company’s established policy.

17.3(b) For reasonable suspicion and post-accident testing only, the engineer has the right to request the presence of a Union Representative at the collection site. The Union Representative shall not in any way interfere with or otherwise obstruct the collection process. The parties agree that the collection may be delayed a reasonable period, not to exceed thirty (30) minutes, to await the arrival of the Union Representative. The thirty (30)-minute period will commence when the Union, to include a Union Representative, is notified.

ARTICLE 18
NON-DISCRIMINATION

Section 18.1. Non-Discrimination

18.1(a) All terms and conditions of employment included in this Agreement shall be administered and applied without regard to race, color, religion, national origin, status due to the Service in the Uniformed Services Act, age, sex, sexual preference, marital status, or the presence of a disability except in those instances where age, sex or the absence of a disability may constitute a bona fide occupational qualification.

18.2(b) Administration and application of the Agreement that is not in contravention of federal or state law shall not be considered discrimination under this Article. The parties recognize that the Company is required to comply with applicable federal and state disability discrimination laws, and agree that the Company may take actions necessary to stay in compliance. The Company agrees to notify the Union in advance in the event that compliance with such laws affects the engineer rights set forth in this Agreement.

Section 18.2. Non-Discrimination Grievances

Notwithstanding any other provision of Article 3, a grievance alleging a violation of this Article 18 shall be subject to the grievance and arbitration procedure of Article 3 only if it is filed on behalf of and pertains to a single engineer. Class grievances under Article 18 shall not be subject to the grievance and arbitration procedure under this Agreement.

ARTICLE 19
SCOPE OF AGREEMENT

Section 19.1. Complete Agreement

This Agreement constitutes the entire contract between the parties hereto and supersedes and replaces any and all prior obligations and/or agreements, whether written, oral, expressed or implied between or concerning engineers and/or the Union and the Company. No amendment, modification or addition to this Agreement shall be effective unless it is reduced in writing and duly executed by the parties. Nothing herein limits the parties’ obligation to bargain mandatory subjects arising during the term of this agreement.

Section 19.2. Severability

If any term or provision of this Agreement is, at any time during the life of this Agreement, adjudged by a court or administrative body of competent jurisdiction to be in conflict with any law, such term or provision shall become invalid and unenforceable, but such invalidity or unenforceability shall not impair or affect any other term or provision of this Agreement.

ARTICLE 20
PRINTING OF CONTRACTS

The parties agree, in the spirit of labor/management cooperation, that they will equally share the costs of printing the labor agreement.

ARTICLE 21
PERIOD OF AGREEMENT

Section 21.1. Duration

This Agreement shall be effective for a period from the date of contract ratification, and shall remain in force through December 1, 2012.

21.1(a) This Agreement shall remain in force from year to year thereafter, unless either party shall notify the other, in writing by registered mail, not more than ninety (90) calendar days nor less than sixty (60) calendar days prior to the anniversary of the Effective Date in the year in which contract termination is desired. Unless terminated, this Agreement shall remain in full force and effect from year to year thereafter.

Section 21.2. Notification

Notice under Section 1 above shall be served on the senior Human Resources manager for the Company and the designated representative for the Union.

LETTER OF UNDERSTANDING

Relating to Statement of Intentions

We are writing to express the business objections and intentions of Spirit AeroSystems, Inc. (the “Company”) in regard to employment levels and employment security at the Company’s facilities in Wichita, KS, and Tulsa and McAlester, OK.

The Company’s objective is to maintain principal business operations at these existing facilities, to build and maintain a strong workforce of full time direct employees, and to mitigate any business-driven need for lay-offs by seeking new work and business in these facilities, retaining the work and business now conducted there by the Company, and by providing training and development opportunities that increase the skills flexibility of individual employees.

Dated _______ __, 2009

Spirit AeroSystems, Inc.

By

Sam J. Marnick

Vice President – Labor Relations

LETTER OF UNDERSTANDING

Relating to Contracting and Overtime

This Letter of Understanding is entered into between the parties concurrently with the execution of their collective bargaining agreement dated October 8, 2009. The purpose of this letter is to reflect our mutual understanding regarding the matters set out below.

The Company and SPEEA-WEU will establish a subcommittee, with the participation of the Chief Technology Officer, to discuss and seek agreement on a percentage maximum utilization of contract engineers at the Wichita facility, to be measured over reasonable time periods and to have due regard for business circumstances from time to time, including increasing activity levels and the Company’s ability to recruit direct employees.

The Company will monitor and report on a periodic basis to SPEEA-WEU on the overtime activity levels for SPEEA-WEU represented engineering employees.

We look forward to working with you on these matters.

Dated _______ __, 2009

Society of Professional Engineering Spirit AeroSystems, Inc.

Employees in Aerospace – WEU

By By

Cynthia Cole Sam J. Marnick

President Vice President – Labor Relations

Letter of Agreement

Regarding Section 13.6

This Letter of Understanding is entered into between the parties concurrently with the execution of their collective bargaining agreement dated October 8, 2009. The purpose of this letter is to reflect our mutual understanding regarding the matters set out below.

The Company and the Union agree that nothing in the revisions of Section 13.6(b) is intended to change the Company and the Union’s current practices regarding reimbursement by the Union to the Company for time spent by employees on Union business.

Dated ________ __, 2009

Society of Professional Engineering Spirit AeroSystems, Inc.

Employees in Aerospace – WEU

By By

Cynthia Cole Sam J. Marnick

President Vice President – Labor Relations

	Society of Professional Engineering in Aerospace (Wichita Engineering Unit)	Society of Professional Engineering in Aerospace (Wichita Engineering Unit)
	Represented Employees (Active)	Represented Employees (Active)
	Hired on June 16, 2005	Active employees who Retired from Boeing and were hired by Spirit and Non-Boeing Retirees Hired After June 16, 2005
	(excluding Boeing employees who retired before Close)
Savings/401(k) Plan	%	%
Employee Contributions	Up to 50% of pay, up to federal limits	Up to 50% of pay up to federal limits
Spirit Matching Contributions	75% match on first 8% of pay employee contributions	75% match on first 8% of pay employee contributions
Additional Spirit Contributions	Age + Service* Spirit Contribution <60 1.5% >60 but <80 3.0% >80 4.5% .	Age + Service* Spirit Contribution <60 1.5% >60 but <80 3.0% >80 4.5% .
Spirit Transition Contributions	Service at Closing Spirit Contribution** 5-9 years 1.5% 10-14 years 2.5% 15+ years 3.5%	None
Vesting
Matching Contributions	100% immediate	100% immediate
Additional Spirit Contributions	25% after 2 years, 50% after 3 years, 75% after 4 years and 100% after 5 years of service*	25% after 2 years, 50% after 3 years, 75% after 4 years and 100% after 5 years of service*
Spirit Transition Contributions	100% at earlier of age 60 or completion of 3 years of Spirit service (i.e., future service only)	n/a
Pay Definition	Base salary	Base salary
Payout Options	─ Lump sum ─ Installment payout	─ Lump sum ─ Installment payout
	*Service includes employee's years of vesting service earned under the Boeing Company Employee Retirement Plan. ** Contribution continues for the lesser of 15 years or completed years of Boeing service at the Closing Date.	*Service includes employee's years of vesting service earned under the Boeing Company Employee Retirement Plan.
Spirit Retirement Plan
Normal Retirement Benefit	Accrued benefit determined under Boeing Company Employee Retirement Plan (BCERP) as of the Closing Date.	Not applicable.
Early Retirement	Early retirement provisions under BCERP as in effect on the Closing Date, applicable to frozen accrued benefit. Early retirement eligibility determined based on Spirit service plus service earned for retirement eligibility under BCERP through the Closing Date.	Not applicable.
Payout Options	Same options as available to BCERP participants as of the Closing Date.	Not applicable.
Medical
Employee Cost	All Years: Point of Service (core) - 15% of medical premium cost, but Company and Union are committed to reviewing plan design and other cost savings through the JCC to achieve a cost savings equivalent to a 20% cost sharing. Deductible PPO Plan (enhanced) - 5% of medical premium cost Premium contribution moving up by 1% of the total premium cost on each plan year anniversary if premium cost on the Deductible PPO Plan increases by more than 10% over the prior year.	All Years: Point of Service (core) – 15% of medical premium cost; but Company and Union are committed to reviewing plan design and other cost savings through the JCC to achieve a cost savings equivalent to an 20% cost sharing. Deductible PPO Plan - 5% of medical premium cost Premium contribution moving up by 1% of the total premium cost on each plan year anniversary if premium cost on the Deductible PPO Plan increases by more than 10% over the prior year.
Contribution to FSA	Employees contribute at own discretion up to plan maximums ($4,500)	Employees contribute at own discretion up to plan maximums ($4,500)
Dental
Employee Cost	0% of dental premium cost Premium contribution moving up by 1% of the total premium cost on each plan year anniversary if premium cost increases by more than 10% over the prior year.	0% of dental premium cost Premium contribution moving up by 1% of the total premium cost on each plan year anniversary if premium cost increases by more than 10% over the prior year.
Vision
Plan Design	Included in medical plan.	Included in Spirit medical plans.
Employee Cost	Included in medical plan.	Included in Spirit medical plans.
Retiree Medical (coverage ends at age 65)
Retire at Age 62 & 10 Years	Same medical benefit options and employee cost as provided to active employees. Employees with at least 10 years of service who are laid off by Spirit up to 30 months prior to meeting eligibility for this benefit will be eligible for this benefit upon reaching age 62.	Not applicable.
Retire at Age 55 &10 Years	Same medical benefit options as active employees; retiree pays full cost of benefits (based on retired population costs). Employees with at least 10 years of service who are laid off by Spirit up to 30 months prior to meeting eligibility for this benefit will be eligible for this benefit upon reaching age 55.	Not applicable for Boeing Retirees. Non-Boeing Retirees Hired After June 16, 2005 - Same medical benefit options as active employees; retiree pays full cost of benefits (based on retired population costs). Employees with at least 10 years of service who are laid off by Spirit up to 30 months prior to meeting eligibility for this benefit will be eligible for this benefit upon reaching age 55.
Ancillary Benefits (2080 hrs/yr)
Company Paid Life Insurance	1.25 times annual base wage	1.25 times annual base wage
Optional Life Insurance	Additional benefit is available on an employee pay all basis	Additional benefit is available on an employee pay all basis
Company Paid Short Term Disability	80% of weekly base wage for weeks 2 - 13 and 60% of weekly base wage for weeks 14 - 26	80% of weekly base wage for weeks 2 - 13 and 60% of weekly base wage for weeks 14 - 26
Company Paid Long Term Disability	40% of base monthly wage up to a maximum of $5,000 per month following a 26 week elimination period	40% of base monthly wage up to a maximum of $5,000 per month following a 26 week elimination period
Optional Long Term Disability	Additional 20% benefit ($2,500 monthly maximum) is available on an employee pay all basis	Additional 20% benefit ($2,500 monthly maximum) is available on an employee pay all basis
Company Paid AD&D	2 times annual base wage	2 times annual base wage
Company Paid BTA	2 times annual base wage	2 times annual base wage

Consumer Directed Health Plan Benefits at a Glance (Deductible PPO Plan)
Plan Basic	In-Network		Out-of-Network
Deductible
Individual	$1,000		$2,000
Employee+1 (Employee & Spouse or Employee & Child(ren))	$1,750		$3,500
Family	$2,500		$5,000
Employer Funded Personal Care Account
Individual	250
Employee+1 (Employee & Spouse or Employee & Child(ren))	500
Family	750
Annual Out-of-Pocket (OOP) Maximum (does NOT include deductible)
Individual	$1,000		$2,000
Employee+1 (Employee & Spouse or Employee & Child(ren))	$1,500		$3,000
Family	$2,000		$4,000
Outpatient Care
Surgery/Diagnostic Tests/X-Rays	90% after deduct		60% after deduct
Physician Office Visit	90% after deduct		60% after deduct
Inpatient Care
Hospital Room & Board	90% after deduct		60% after deduct
Physician Services	90% after deduct		60% after deduct
Emergency Care
Emergency Room (waived if admitted)	90% after deduct		limitations apply within service area; 90% after deduct - outside service area
Ambulance or other emergency related charges	90% after deduct		90% after deduct
Mental Health/Chemical Dependency
Inpatient - 20 day annual maximum, only 2 chemical dependency treatments per lifetime; outpatient substance abuse lifetime limit of $7,500; non-network outpatient substance abuse annual maximum $1,000
Hospital Room and Board	90% after deduct		60% after deduct
Diagnostic Tests/X-Rays/Physician Services	90% after deduct		60% after deduct
Physician Services	90% after deduct		60% after deduct
Outpatient
Physician Office Visit (Substance abuse has a lifetime maximum of $7,500)	90% after deduct		60% after deduct
Other
Home Health Care/Private Duty Nursing - $10,000 annual max	90% after deduct		60% after deduct
Maternity
Initial Visit	90% after deduct		60% after deduct
Pre-Natal Visits After Initial Visit	90% after deduct		60% after deduct
Delivery/Hospital Services/Doctor Visits While in Hospital	90% after deduct		60% after deduct
Post-Natal Visits	90% after deduct		60% after deduct
Therapy - 20 visit annual maximum per episode
Occupational/Physical Therapy	90% after deduct		60% after deduct
Speech Therapy	90% after deduct		60% after deduct
Chiropractic Care	90% after deduct		60% after deduct
Preventive - up to $400 per covered individual, treated as any other benefit afterwards	100%		not covered
Pharmacy	In-Network		Out-of-Network
Retail (30 day supply)
Generic (mandatory generic)	$10		not covered
Formulary	$20		not covered
Non-Formulary	$35		not covered
Mail Order (90 day supply)
Generic (mandatory generic)	$25		not covered
Formulary	$50		not covered
Non-Formulary	$85		not covered
Traditional Coordinated Care (CCP/POS) Benefits at a Glance (core)
Plan Basic		PCP Option		Self-Referral Option
Deductible
Individual		N/A		$600
Employee+1 (Employee & Spouse or Employee & Child(ren))		N/A		$1,200
Family		N/A		$1,800
Employer Funded Personal Care Account
Individual		N/A		N/A
Employee+1 (Employee & Spouse or Employee & Child(ren))		N/A		N/A
Family		N/A		N/A
Annual Out-of-Pocket (OOP) Maximum (does NOT include deductible)
Individual		N/A		$1,500
Employee+1 (Employee & Spouse or Employee & Child(ren))		N/A		$2,250
Family		N/A		$3,000
Outpatient Care
Surgery/Diagnostic Tests/X-Rays		$10 or $35*		60% after deduct
Physician and Specialist Office Visit		$15 or $20*		60% after deduct
Inpatient Care
Hospital Room & Board		$100		60% after deduct
Physician Services		100%		60% after deduct
Emergency Care
Emergency Room (waived if admitted)		$100		limitations apply within service area; $100 - outside service area
Ambulance or other emergency related charges		$20		$20
Mental Health/Chemical Dependency
Inpatient - 20 day annual maximum, only 2 chemical dependency treatments per lifetime; outpatient substance abuse lifetime limit of $7,500; self-referral outpatient substance abuse annual maximum $1,000
Hospital Room and Board		$150		60% after deduct
Diagnostic Tests/X-Rays/Physician Services		100%		60% after deduct
Physician Services		100%		60% after deduct
Outpatient
Physician Office Visit (Substance abuse has a lifetime maximum of $7,500)		$15 or $20*		60% after deduct
Other
Home Health Care/Private Duty Nursing - $10,000 annual max		$20 per visit		60% after deduct
Maternity
Initial Visit		$15 or $20*		60% after deduct
Pre-Natal Visits After Initial Visit		$0		60% after deduct
Delivery/Hospital Services/Doctor Visits While in Hospital		$25 or $100*		60% after deduct
Post-Natal Visits		$15 or $20*		60% after deduct
Therapy - 20 visit annual maximum per episode
Occupational/Physical Therapy		$20		60% after deduct
Speech Therapy		$20		60% after deduct
Chiropractic Care		$20		60% after deduct
Preventive - up to $400 per covered individual, treated as any other benefit afterwards		100%		not covered
Pharmacy		In-Network		Out-of-Network
Retail (30 day supply)
Generic (mandatory generic)		$8		not covered
Formulary		$15		not covered
Non-Formulary		$30		not covered
Mail Order (90 day supply)
Generic (mandatory generic)		$16		not covered
Formulary		$30		not covered
Non-Formulary		$70		not covered
*Lower payment for using health care providers identified as "High Performers" (when available)

Dental Benefits at a Glance
Plan Basic - Incentive Plan	In-Network (Delta Dental Premier Network)	Out-of--Network
Deductible	$50	$100
Annual Benefit Maximum per Individual	$2,000	$2,000
Coinsurance
Preventive (deductible waived)	100%	80%
Basic	80%	70%
Major	50%	50%
Orthodontia
Coinsurance	50%	50%
Lifetime Maximum	$1,750	$1,750

Vision Hardware
Frames	$82
Lenses: Single	$78
Bifocal		$160
Trifocal or Progressive	$190
Lenticular	$215
Contact Lens	$210

Company will maintain a child and elder-care referral program consisting of referrals of engineers to licensed care facilities, consultation with engineers to determine individual needs, and providing educational materials and programs.—from Section 20.1

Hearing - Increase Hearing Aids maximum coverage to $1000 (all other aspects of hearing aid benefit remain the same)

Provided this Agreement is ratified by October 9, 2009, the Company will provide, beginning July 2011, a personal (portable) critical illness benefit for the remaining duration of the Agreement. In general terms, the Plan will include (the Plan document will govern):

o $15,000 Benefit

o Portable

o Covers

§ Cancer

§ Carcinoma in SITU

§ Heart Attack

§ Coronary Artery Bypass Surgery

§ Stroke

§ Major Organ Transplant

§ Renal Failure