Job Security Plan

Memorandum Of Understanding Issued On Proposed Wage Reduction

By JD Nutt, Web Editor

Report Last Updated: 12.04.2008

Oklahoma City OK. - A sixteen page report titled "Memorandum Of Understanding On The Proposed Wage Reduction" was obtained by the Road Drivers Weekly News. The memo outlines YRCW's proposed wage reduction of International Brotherhood of Teamsters (IBT) employees and all non bargaining unit employees (including management).

The "Job Security Plan" indicates during the period in which the plan is effective, (January 1st, 2009 to March 31st, 2013) all YRCW employee's gross wages shall be reduced by ten percent, notwithstanding casual employees. Scheduled wage increases will be reduced also by ten percent. Cost of Living Adjustments (COLA) shall be suspended for the duration of the National Master Freight Agreement (NMFA). The wage reduction will effect overtime pay, premium pay, vacation, sick pay, holiday pay, funeral leave, jury duty and other paid for time not worked. Health, welfare and pension contributions continue to be paid in full. The plan is scheduled to terminate at the end of the National Master Freight Agreement (NMFA) on March 31st, 2013.

To offset the wage reduction, "Warrants" to purchase common stock of YRCW will be available. An entity such as a trust or plan would allow IBT employees fifteen percent of the equity of YRCW. The warrants shall be exercisable on January 1st, 2010. The warrants shall expire on January 31st, 2018. The warrants can be made part of the employee's estate. Casual employees do not have this option under the proposed plan.

The plan is to be put to the rank and file members by a secret ballot vote of all bargaining unit employees. If more than fifty percent of the members vote for approval, the plan would be placed into effect on January 1st, 2009, Non bargaining unit employees (including management), do not have a vote.

Estimated savings for YRCW over the life of the plan could reach $800 Million Dollars.

From the Dictionary of Financial Terms.

Warrant... Corporations may issue warrants that allow you to buy a company's stock at a fixed price during a specific period of time, often 10 or 15 years, though sometimes there is no expiration date.

Warrants are generally issued as an incentive to investors to accept bonds or preferred stocks that will be paying a lower rate of interest or dividends than would otherwise be paid.

How attractive the warrants are -- and so how effective they are as an incentive to purchase -- generally depends on the growth potential of the issuing company. The brighter the outlook, the more attractive the warrant becomes.

When a warrant is issued, the exercise price is above the current market price. For example, a warrant on a stock currently trading at $15 a share might guarantee you the right to buy the stock at $30 a share within the next 10 years. If the price goes above $30, you can exercise, or use, your warrant to purchase the stock, and either hold it in your portfolio or resell at a profit. If the price of the stock falls over the life of the warrant, however, the warrant becomes worthless.

Warrants are listed with a "wt" following the stock symbol and traded independently of the underlying stock. If you own warrants to purchase a stock at $30 a share that is currently trading for $40 a share, your warrants are theoretically be worth a minimum of $10 a share, or their intrinsic value.

Source: http://financial-dictionary.thefreedictionary.com/Warrants