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EXHIBIT 10.27
MEMORANDUM OF AGREEMENT BETWEEN THE
UNITED STATES DEPARTMENT OF ENERGY
AND THE UNITED STATES ENRICHMENT
CORPORATION RELATING TO
ADMINISTRATION
OF WORKER TRANSITION SERVICES
THIS MEMORANDUM OF AGREEMENT is entered into as of June 30,
1998, by and between the UNITED STATES DEPARTMENT OF ENERGY ("D0E") and the
UNITED STATES ENRICHMENT CORPORATION ("USEC" or the "Corporation").
WHEREAS, USEC operates the gaseous diffusion plants ("GDP's")
using contractor employees. and currently the operating contractor is Lockheed
Xxxxxx Utility Services (LMUS);
WHEREAS, USEC anticipates that a reduction in employment of
these contractor employees is likely to be necessary in the next two years;
WHEREAS, USEC and DOE prefer to achieve the necessary
reductions in employment through attrition and voluntary separations to the
extent commercially practicable in accordance with applicable laws and
contractual commitments and wish to mitigate or prevent adverse impacts of
those reductions by providing enhanced benefits;
WHEREAS, the Department's Office of Worker and Community
Transition is responsible for overseeing the development and implementation of
plans for restructuring the work forces at the Department's defense nuclear
facilities and for providing worker transition services for the adversely
affected workforces, and thus has relevant expertise in administering the
development and implementation of worker transition programs;
WHEREAS, section 161v. of the Atomic Energy Act provides that
the Department may provide services in support of USEC, provided that the
Department collects payments or other charges sufficient to ensure recovery of
its costs;
WHEREAS, section 1311 of the Atomic Energy Act authorizes the
Corporation to request to use on a xxxx-
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bursable basis the available services of agencies of the United States,
including the Department;
NOW, THEREFORE, under the authority of the USEC Privatization
Act, the Energy Policy Act, the Atomic Energy Act and other law, DOE and USEC
hereby agree as follows:
ARTICLE 1 DEFINITIONS
The following terms when capitalized and used in this
Agreement shall have the meanings indicated below.
"Affected Communities" means Piketon, Ohio, and Paducah,
Kentucky, and surrounding communities.
"Affected Employees" means those employees currently employed
by the O&M Contractor at the Gaseous Diffusion Plants at Piketon, Ohio, and
Paducah, Kentucky, whose employment by the O&M Contractor is terminated
pursuant to a voluntary or involuntary separation plan carried out in
accordance with Article 3(a).
"Atomic Energy Act" means the Atomic Energy Act of l954, as
amended, 42 U.S.C. Sections 2011 et. seq.
"Energy Policy Act" means the Energy Policy Act of 1992, Title
IX of Public Law 102-486.
"Fiscal Year" means USEC's fiscal year, which begins July l
and ends June 30.
"Fund" has the meaning ascribed to it in Article 2.
"Gaseous Diffusion Plants" or "GDP's" means the gaseous
diffusion plants at Paducah, Kentucky and Piketon, Ohio owned by DOE, portions
of which are leased to USEC under the Lease Agreement Between the United States
Department of Energy and the United States Enrichment Corporation, dated July
1, 1993, as amended.
"O&M Contractor" means the contractor employed by USEC to
operate the GDP's, currently Lockheed Xxxxxx Utility Services.
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"Privatization Date" means the date on which 100 percent of
the ownership of the Corporation has been transferred to private investors
pursuant to the USEC Privatization Act.
"Secretary" means the Secretary of Energy.
"USEC Privatization Act" means Title III of Public Law
104-134.
ARTICLE 2 FUNDING MECHANISM
Prior to the Privatization Date, USEC shall transfer $20
million to an account in the U.S. Treasury designated by the Department of the
Treasury ("xxx Xxxx") to be administered by DOE to accomplish the purposes set
forth in this Agreement, including Attachment A.
ARTICLE 3 WORKER TRANSITION SERVICES
(a) DOE shall, at USEC's request, assist USEC in
formulating and implementing a plan to achieve any necessary reductions in
employment at the GDP's during Fiscal Years 1999 and 2000 in accordance with
the following criteria:
(1) Reductions shall be achieved through attrition and
voluntary programs to the extent commercially
practicable;
(2) Reductions shall be structured to preserve the skill
mix that USEC concludes is necessary at the GDP's,
with reductions targeted by plant, department,
function and job classification to achieve the
employment levels specified by USEC; and
(3) In the event the required workforce reductions are
not achieved through voluntary programs, DOE shall,
at USEC's request, assist USEC in implementing an
involuntary reduction program;
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provided that, consistent with the requirements of sections 16lv. and 1311 of
the Atomic Energy Act, any expenses incurred by DOE in providing such advice
are to be paid only from amounts available in the Fund. (DOE estimates that
such expenses will not exceed $200,000.)
(b) Using amounts available in the Fund, DOE shall be
responsible for administering or overseeing the administration of a program for
providing enhanced benefits (Fund Enhanced Program) to Affected Employees.
Such benefits shall be in addition to any benefits the Affected Employees are
otherwise entitled to receive from the O&M Contractor pursuant to any
applicable labor contracts or employee benefit policies or procedures.
(c) The O&M Contractor, or such other entity as agreed upon by
DOE and USEC, with funds provided by DOE, shall provide enhanced benefits to
the Affected Employees in a manner agreed to by DOE and USEC; provided that,
the total costs of administering the Fund Enhanced Program, including DOE's
costs and the amount of any funds provided under this Agreement to the Affected
Employees, does not exceed the total amount in the Fund; and further provided
that the O&M Contractor is responsible for identifying the Affected Employees
and further provided that the amount of funds provided to an Affected Employee
shall be determined in accordance with this Agreement and Attachment A.
ARTICLE 4 COMMUNITY TRANSITION SERVICES TO BE PROVIDED BY DOE
(a) A portion of the Fund shall be available for allocation
by DOE in a manner agreed to by DOE and USEC to the Affected Communities for
economic development proposals that would create employment suitable for the
Affected Employees. The parties currently estimate that the portion to be
allocated for this purpose will be five million dollars ($5 million).
ARTICLE 5 HIRING PREFERENCE BY DOE
In addition to the benefits provided pursuant to Article 3,
DOE shall, where practicable, extend a preference in the hiring at DOE
facilities to any eligi-
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ble adversely affected employee of an operating contractor at either plant
pursuant to section 3110 of the USEC Privatization Act and section 3161 of the
National Defense Authorization Act of Fiscal Year 1993.
ARTICLE 6 EXPIRATION OF AGREEMENT
(a) Any funds not expended or obligated within two (2) years
of the Privatization Date under Article 3 shall be made available for purposes
specified in Article 4.
(b) In the event that the Privatization Date does not occur
by June 30, 1999, either party shall have the option to terminate this
Agreement by written notice to the other party upon 30 days' notice.
ARTICLE 7 MODIFICATIONS AND PRIVATIZATION
(a) Amendments. Except for changes made pursuant to Article
7(b) hereof, no change to this Agreement shall be valid or binding unless such
change is agreed to in writing by the parties.
(b) Privatization. If USEC is privatized and its duties and
obligations are assumed by a private corporation pursuant to such
privatization, this Agreement shall survive and shall be transferred to such
private corporation without the need for DOE or USEC to take any further
action. In such event, the name of such private corporation shall be
substituted for that of USEC in this Agreement.
ARTICLE 8 MISCELLANEOUS
(a) Force Majeure. A Party shall not be liable for any delay
in, or prevention of, performance of its obligations under this Agreement to
the extent due to a "Force Majeure." A Force Majeure shall mean any event
arising from causes beyond the control of a Party that causes a delay in or
prevents the performance of any obligation by that Party under this Agreement,
including, acts of God; fire; war; insurrection; civil disturbance; explosion;
acts or a failure to act by the other Party;
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unanticipated breakage or accident to machinery, equipment or lines of pipe
despite reasonably diligent maintenance; other circumstances that represent an
imminent danger to human health, safety or the environment; adverse weather
conditions that could not be reasonably anticipated; unusual delay in
transportation, restraint by court order or order of public authority; and
delays caused by compliance with applicable statutes or regulations governing
contracting, procurement or acquisition procedures, despite the exercise of
reasonable diligence. Force Majeure shall not include increased costs or
expenses.
(b) Entire Agreement. This Agreement contains the entire
understanding of DOE and USEC with respect to the subject matter of this
Agreement.
(c) Notices. Unless otherwise agreed by the parties,
communications concerning this Agreement may be made by electronic or facsimile
transmission (hard copy to follow) and shall be made to the following:
For DOE:
Xxxxxx XxXxxxxx, Xx.
Director, Office of Worker and Community Transition
U.S. Department of Energy
0000 Xxxxxxxxxxxx Xxx., X.X.
Xxxxxxxxxx, XX 00000
Fax: 000-000-0000
For USEC:
Xxxxx X Xxxxxxx, Xx.
United States Enrichment Corporation
2 Democracy Center
0000 Xxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Fax: (000) 000-0000
The effective date of any communication shall be thirty (30) calendar days
after the date of the receipt of such electronic, facsimile or other
communication by the addressee.
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(d) Applicable Law. This Agreement shall be governed and
construed in accordance with the laws of the United States of America.
(e) Further Assistance. DOE and USEC shall provide such
information, execute and deliver any agreements, instruments and documents and
take such other actions as may be reasonably necessary or required, which are
not inconsistent with the provisions in this Agreement and which do not involve
the assumption of obligations other than those provided for in this Agreement,
in order to give full effect to this Agreement and to carry out its intent and
the intent of the Act.
(f) Effective Date. This Agreement shall become effective
upon the date of the last signature of the parties to the Agreement.
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IN WITNESS WHEREOF, DOE and USEC have caused this Agreement to
be executed and delivered as of the date first above written and hereby affix
the signatures of their duly authorized representatives.
UNITED STATES DEPARTMENT OF ENERGY
By: /S/ XXXXXXXX XXXX
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Xxxxxxxx Xxxx
Secretary
Date: June 30, 1998
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AND
UNITED STATES ENRICHMENT CORPORATION
By: /S/ X.X. XXXXXXX
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X. X. Xxxxxxx
VP, Advanced Tech.
Date: June 30, 1998
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