CONTRACT between

1
EXHIBIT 10.12

CONTRACT

between

Lockheed Xxxxxx Utility Services, Inc.
Paducah Gaseous Diffusion Plant

and

Oil, Chemical And Atomic Workers
International Union AFL-CIO
And Its Local 3-550

July 31, 1996 - July 31, 2001

CONTRACT BETWEEN

LOCKHEED XXXXXX UTILITY SERVICES, INC.
PADUCAH GASEOUS DIFFUSION PLANT

Hereinafter referred to as the "Company"

and

OIL, CHEMICAL AND ATOMIC WORKERS
INTERNATIONAL UNION, AFL-CIO
AND ITS LOCAL 3-550

Hereinafter referred to as the "Union"

July 31, 1996 - July 31, 2001

TABLE OF CONTENTS

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ARTICLE I - PURPOSE....................................................................

ARTICLE II - RECOGNITION...............................................................
Section 1. Recognition......................................................
Section 2. Employees defined................................................
Section 3. Pre-contract Incidents...........................................
Section 4. Anti-Discrimination, Solicitation................................

ARTICLE III - UNION-COMPANY RELATIONS..................................................
Section 1. Union Membership.................................................
Section 2. Dues Deduction...................................................
Section 3. Escape Periods...................................................
Section 4. Authorization Form...............................................

ARTICLE IV - CONTINUITY OF OPERATION...................................................
Section 1. Continuity of Operation..........................................
Section 2. Security.........................................................

ARTICLE V - RESPONSIBILITIES...........................................................

ARTICLE VI - HOURS OF WORK.............................................................
Section 1. Definitions......................................................
(a) Payroll Week.....................................................
(b) Normal Workweek..................................................
(c) Normal Workday...................................................
(d) Normal Hours - Shift.............................................
(e) Normal Hours - Day...............................................
(f) Working Schedule.................................................

Section 2. Work Schedule Adjustments........................................
(a) Hours Not Limited................................................
(b) Schedule Changes.................................................
(c) Not Offsetting Overtime..........................................
(d) Shift Change Pay.................................................

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Section 3. Overtime Premium Pay.............................................
Section 4. Call-In Pay......................................................
Section 5. Reporting Pay....................................................
Section 6. Overtime Distribution............................................
Section 7. Meal Allowance...................................................
Section 8. Holidays.........................................................
Section 9. Seventh Day Premium Pay..........................................
Section 10. Non-Pyramiding...................................................
Section 11. Shift Trades.....................................................
Section 12. Jury Duty Pay....................................................
Section 13. Voting Time Pay..................................................
Section 14. Time Not Worked..................................................
Section 15. Funeral Pay......................................................

ARTICLE VII - WAGES....................................................................
Section 1. Effective Date...................................................
Section 2. Shift Premium....................................................
Section 3. Nondiscrimination - Sex..........................................
Section 4. Permanent Transfers..............................................
Section 5. Temporary Transfers..............................................
Section 6. Weekend Premium..................................................
Section 7. Cost of Living Allowance.........................................
Section 8. Shift Turnover...................................................

ARTICLE VIII - LAYOFF ALLOWANCE........................................................
Section 1. Schedule.........................................................
Section 2. Base Date........................................................
Section 3. Retirement Termination...........................................
Section 4. Successor or Assigns.............................................

ARTICLE IX - DISABILITY PAY............................................................
Section 1. Short Term.......................................................
Section 2. Long Term........................................................
Section 3. Conditions of Payment............................................
Section 4. Administration of Plans..........................................
Section 5. Company Service Credit During Approved Nonoccupational
or Occupational Absences.........................................

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ARTICLE X - LEAVE OF ABSENCE...........................................................
Section 1. Personal Leave...................................................
Section 2. Union Officials..................................................
Section 3. Reinstatement....................................................
Section 4. Group Insurance..................................................
Section 5. Hospitalization..................................................
Section 6. FMLA.............................................................

ARTICLE XI - VACATIONS.................................................................

ARTICLE XII - SENIORITY................................................................
Section 1. Definitions......................................................
Section 2. Seniority........................................................
Section 3. Reduction in Force...............................................
Section 4. Filling Vacancy..................................................
Section 5. Transfers Outside Unit...........................................
Section 6. Seniority List...................................................
Section 7. Transfers........................................................

ARTICLE XIII - GRIEVANCE PROCEDURE.....................................................
Section 1. Representation...................................................
Section 2. Grievance Steps..................................................
Section 3. Company Decision.................................................
Section 4. Time Limits......................................................
Section 5. Calculation of Time..............................................
Section 6. Certification of Union Representatives...........................
Section 7. Settlements......................................................

ARTICLE XIV - ARBITRATION..............................................................
Section 1. Arbitration......................................................
Section 2. Appeal to Arbitration and Authority of Arbitrator................
Section 3. Expense, Security................................................
Section 4. Witnesses........................................................
Section 5. Arbitrator, Time Limits..........................................

ARTICLE XV - MISCELLANEOUS.............................................................
Section 1. Non-Bargaining Unit Personnel Performing Work....................
Section 2. Safety Committee.................................................
Section 3. Health and Safety................................................

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Section 4. Company Service Credit...........................................
Section 5. Bulletin Boards..................................................
Section 6. Personal Absence.................................................
Section 7. No Discrimination................................................
Section 8. Coveralls, Thermal Underwear.....................................
Section 9. Reprimands.......................................................
Section 10. Telephone Calls Received At Home.................................
Section 11. E-Squad Members-Training.........................................
Section 12. CDL Premium For Truck Drivers....................................
Section 13. Benefit Representative & ES&H Representative.....................

ARTICLE XVI - EDUCATIONAL ASSISTANCE...................................................

ARTICLE XVII - TERM OF CONTRACT........................................................
Section 1. Successor or Assigns.............................................
Section 2. Duration.........................................................

INDEX BY SUBJECT MATTERS

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Absences:
Disability.........................................................................
Funeral............................................................................
Jury Duty..........................................................................
Leave of Absence...................................................................
Voting Time........................................................................

Administrative Letters.................................................................

Arbitration............................................................................

Benefit Plans..........................................................................
Administrative Letter..............................................................
Dental.............................................................................
Flexible Spending Accounts.........................................................
Life Insurance.....................................................................
Medical (10/01/96).................................................................
Medical (10/01/98).................................................................
Prescription Drug Plan.............................................................
Savings Plan.......................................................................
Special Accident Insurance.........................................................
Vision Care........................................................................

Bulletin Boards........................................................................

Call-In, Overtime......................................................................

CDL Premium............................................................................

Changes in Working Schedule............................................................

Clothing...............................................................................

Committees:
Grievance Committee................................................................

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Safety Advisory Committee..........................................................

Company Responsibilities...............................................................

Company Service Credit Rules...........................................................

Cost of Living Allowance...............................................................

Definition.............................................................................

Delayed Lunch Period...................................................................

Dental Insurance Plan..................................................................

Disability Pay:
Nonoccupational....................................................................
Occupational.......................................................................
Payment Schedule...................................................................
Condition of Payment..........................................................
Short Term....................................................................
Wage Increase..........................................................
Long Term.....................................................................

Disciplinary Suspension or Discharge...................................................
2 Day Suspension...................................................................

Discrimination:
Nondiscrimination Clause...........................................................

Double Time............................................................................

Educational Assistance.................................................................

Emergency Squad Members................................................................

Flexible Spending Accounts.............................................................

FMLA...................................................................................

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General Provisions.....................................................................

Grievance Procedure....................................................................

Group Insurance Plan...................................................................

Health Care Plan.......................................................................

Holidays...............................................................................

Temporarily Reclassified...........................................................

Hours of Work..........................................................................

Hours of Work Limitations..............................................................

Job Bidding............................................................................

Job Classifications:
Job Classification and Rate Groups.................................................
Job Classification Groups (Seniority)..............................................
Operator Restructuring.............................................................

Jury Duty..............................................................................

Layoff Allowance.......................................................................

Layoff Procedure.......................................................................

Leave of Absence.......................................................................

Life Insurance.........................................................................

Loss of Seniority......................................................................

Meal Allowance.........................................................................

Merit Progression Increases
(General Provisions)...............................................................

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Miscellaneous..........................................................................

No Strike Clause.......................................................................

Pension Plan...........................................................................

Operator Restructuring.................................................................

Overtime...............................................................................
Call-In............................................................................
Double Time........................................................................

Pension, Group Insurance and Dental Agreement..........................................

Permanent Restriction..................................................................

Personal Absence Without Pay...........................................................

Physically Handicapped.................................................................

Plant Committee Divisions..............................................................

Prescription Drug Plan.................................................................

Probationary Period....................................................................

Promotions.............................................................................

Recall List............................................................................

Reduction in Force (Procedure).........................................................

Rehiring...............................................................................

Reprimands.............................................................................

Retirement Layoff Allowance............................................................

Safety.................................................................................

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Savings Plan...........................................................................

Scale Mechanic Classification Deletion.................................................

Security...............................................................................

Seniority..............................................................................

Seniority List.........................................................................
Recall List........................................................................
Seniority Groups...................................................................

Shared Tasks...........................................................................

Shift Preference.......................................................................

Shift Premium..........................................................................

Shift Change...........................................................................

Shift Trading..........................................................................

Shift, "12-hour".......................................................................

Sleeping Accommodations, Overtime......................................................

Special Accident Insurance.............................................................

Xxxxxxx Districts......................................................................

Telephone Calls Received At Home.......................................................

Temporary Reassignment.................................................................

Term of Contract.......................................................................

Training--E-Squad......................................................................

Transfers, Work Groups.................................................................

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Union/Company Relationship.............................................................

Union Dues.............................................................................

Union Membership.......................................................................

Union Recognition......................................................................

Union Representatives..................................................................

Vacancies, Filling of..................................................................

Vacation Eligibility...................................................................

Vacation Regulations...................................................................
Carry Forward Option...............................................................
Disability Absence.................................................................
Pay in Lieu of.....................................................................
Scheduling.........................................................................
Split Week.........................................................................
Temporarily Reclassified...........................................................

Vision Care Plan.......................................................................

Voting Time............................................................................

Wages..................................................................................
Disability.........................................................................
Schedules:
July 31, 1996.................................................................
July 31, 1997.................................................................
July 31, 1998.................................................................
July 31, 1999.................................................................
July 31, 2000.................................................................

Weekend Premium........................................................................

Work Assignment:
Selection and Direction of Working Force...........................................

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Shared Tasks.......................................................................
Work by Non-Bargaining Unit Personnel and Research Personnel.......................
Work by First-Line Managers........................................................
Working Schedule...................................................................
Work Groups........................................................................

NOTES

xii

NOTES

xiii

NOTES

xiv

ARTICLE I
PURPOSE

It is the intent of the parties that this contract will constitute the complete
agreement between the parties hereto, and that no additions, waivers, deletions,
changes or amendments shall be made during the term of this contract except by
written agreement of the parties.

ARTICLE II
RECOGNITION

Section 1. In conformity with the Labor-Management Relations Act, the Company
recognizes the Union as the sole and exclusive bargaining agent for all hourly
rated employees, excluding Guards and salaried employees (semi-monthly or
weekly), with respect to rates of pay, wages, hours of employment, and other
conditions of employment.

Section 2. The term "employee" as used herein will mean any person represented
by the Union as described in Section 1 above. For the purpose of this Agreement
the use of the masculine pronoun or derivative thereof shall be applied as to
include both male and female.

Section 3. It is understood that no incident which occurred prior to the
effective date of this contract shall be the subject of complaint under any of
the procedures provided in this contract. Grievances arising under the terms of
the previous contract shall be processed in accordance with such terms.

Section 4. The Company agrees not to interfere with the right of employees to
join or belong to the Union and the Union agrees not to intimidate or coerce
employees to join the Union. The Company further agrees not to discriminate
against any employee on account of Union membership or Union activity, and the
Union agrees neither to solicit for membership, collect Union funds, nor to
engage in other Union activity on Company time unless specifically provided for
in this contract.

ARTICLE III
UNION-COMPANY RELATIONSHIP

Section 1. All employees within the Bargaining Unit who are members of the Union
upon the execution of this Contract shall, as a condition of employment,
maintain their membership to the extent of tendering the periodic dues uniformly
required as a condition of retaining membership. All employees in the Bargaining
Unit who are not members of the Union upon the execution of this Contract, will
within thirty (30) days join the Union, and shall at all times thereafter
maintain their membership in the Union as a condition of employment, as set
forth above.

Section 2. Upon receipt of proper written authorization from an employee, the
Company agrees to deduct from the wages of said employee dues uniformly
applicable to all members as certified to the Company by the Union. Payroll
deductions of appropriate incremental amounts will be made on a weekly basis
until the regular monthly dues amount has been collected unless the employee's
paychecks during the month are insufficient to cover the monthly dues amount.
Dues deducted and collected for the month will be forwarded to the Financial
Secretary of the Union.

Section 3. An employee while this contract is in effect may revoke his dues
authorization only during the fifteen (15) day period immediately preceding each
anniversary date of this contract becoming effective, and each succeeding year
this contract is automatically renewed, by sending written notice registered
mail (includes certified mail) to the Company with a copy to the Union.

Section 4. The dues assignment and authorization form shall read as follows:
I, __________________________________________________________________
Name

Badge No.: _________

have accepted membership in Oil, Chemical and Atomic Workers International
Union, Local 3-550, and hereby assign to the said Local Union during the time I
am an employee of Lockheed Xxxxxx Utility Services, Inc., Paducah Plant and
while I am in the Bargaining Unit represented by the said Local Union an amount
equal to the regular uniform monthly dues established by said Local Union in
accordance with its Constitution and By-Laws, payable to said Local Union each
month. I authorize my said employer to deduct such sum from my wages by weekly
payroll deductions as dues for the following month and to remit the same to the
Union. This assignment and

authorization may be revoked by me pursuant to the provisions of the Contract
between the Company and the Union.

Social Security No.: __________________________

________________________________________________
Signature

Witnessed: _____________________ Date: _________

Address:________________________________________

ARTICLE IV
CONTINUITY OF OPERATION

Section 1. There will be no strikes, lockouts, work stoppages, picket lines,
slowdowns, secondary boycotts, or disturbances, even of a momentary nature. The
Union agrees to support the Company fully in maintaining operations in every
way. Participation by any employee, or employees, in an act violating this
provision in any way will be complete and immediate cause for discharge by the
Company.

Section 2. It is recognized that all members of the Union and the Company are
required to comply with all protective security measures now in effect. If it is
found that this contract or any part of this contract in any way violates
security measures which are now in effect, or which may be put into effect
later, and the Company and the Union are notified by the proper authority as to
the section or sections of the contract in question, negotiations will begin
immediately for the purpose of making required changes.

ARTICLE V
RESPONSIBILITIES

Subject to the Union rights as set forth in this contract the company shall
continue to exercise its exclusive responsibility, such as the selection and
direction of the working forces, and the rights to promote, demote, transfer,
hire, retire, discipline, discharge, and to determine the qualifications of an
employee are vested with the Company. Claims of discriminatory or arbitrary
promotion, demotion, discipline, or discharge shall be subject to and decided
through the Grievance Procedure and Arbitration in this contract.

ARTICLE VI
HOURS OF WORK

Section 1. Definitions:

(a) The payroll week consists of seven (7) days extending from midnight
Sunday to midnight Sunday the following week.

(b) The normal workweek consists of forty (40) hours within a payroll week.

(d) The normal hours for rotating shift workers are 7:00 a.m. to 7:00 p.m.
and 7:00 p.m. to 7:00 a.m.

(e) The normal hours for straight day workers are from 7:00 a.m. to 3:30
p.m., Monday through Friday with a thirty (30) minute non-paid lunch
period. No time will be deducted for lunch periods when an employee's
scheduled non-paid lunch period is delayed under the following
circumstances:

(1) The delay is ordered by the employee's first-line manager.

(2) The delay causes the employee's lunch period to start five (5)
hours or more after his starting time.

(3) The minimum amount of time necessary will be taken to eat lunch and
in no case to exceed thirty (30) minutes.

(4) Shift workers will be permitted to have a lunch period beginning no
later than five (5) hours after the beginning of a shift.

(f) The term working schedule means the arrangement of shift hours to be
worked and regular shift changes for employees working on shifts and the
regular scheduled arrangement of hours to be worked by straight day
workers.

Section 2.

(a) The provisions of this contract shall not be considered as a guarantee
by the Company of a minimum number of hours per day or per week, or pay
in lieu

thereof, nor a limitation on the maximum hours per day or per week,
which may be required to meet operating conditions.

(b) The Company may adjust the working schedule of employees in any group to
meet operating requirements and employees may be assigned regularly or
temporarily to a schedule other than the normal hours. Plant seniority
shift preference within a group will be granted annually to employees
upon request. Such annual request must be made no later than January 1,
with any change resulting therefrom to be made not later than the week
beginning after March 1.

Such preference may be exercised between seven (7) day rotating shifts
and five (5) day rotating shifts and other specific shifts except that
such preference cannot be exercised between individual letter shifts
within a given rotating shift.

Seniority shift preference within a shift preference group will be
granted in filling vacancies lasting more than five (5) working days.
Seniority shift preference will not apply to vacation relief or to
vacancies caused by exercise of seniority shift preference. An employee
must be qualified to perform the work involved when a vacancy occurs
other than the annual exercise of seniority shift preference.

(d) If a change is made in an employee's work schedule from one established
shift to another established shift for the payroll week in which he is
notified or less than twenty-four (24) hours prior to the beginning of
the payroll week, such employee will be paid for the first eight (8)
hours worked on the new schedule at one and one-half (1-1/2) times the
employee's straight-time hourly rate, except when such change is made at
the request of or for the convenience of the employee. A change in
scheduled days off will be considered a shift change.

Section 3. One and one-half (1-1/2) times the straight-time hourly rate shall be
paid for all hours worked in excess of eight (8) in any twenty-four (24) hour
period or for all hours worked in excess of forty (40) within the applicable
payroll week as defined in Section 1 of this Article, whichever of these
alternatives provides at the end of the payroll week the greater total pay. An
employee who is required to work in excess of sixteen (16) continuous hours,
excluding the non-paid lunch hour of a day worker, shall

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be paid two (2) times the straight-time hourly rate for all such continuous
hours worked in excess of sixteen (16).

Section 4. An employee who has left the plant and is called in by the Company to
perform work outside of his regular scheduled shift will receive not less than
four (4) hours pay at straight-time, or pay at one and one-half (1-1/2) times
his regular rate as overtime pay for such work performed, whichever is greater.

Section 5.

(a) An employee who reports for work on his regular shift without previously
having been notified not to report, will be given at least four (4)
hours work, or if no work is available, four (4) hours pay, except that
if work is unavailable as the result of causes beyond the control of the
Company, it shall not be so obligated.

(b) Failure on the part of an employee to keep the Company informed of his
current address will relieve the Company of its responsibility under
this section of the contract.

Section 6.

(a) Overtime will be distributed in such a manner that each employee within
an overtime group will receive his fair share. An overtime spread of
sixteen (16) hours between the low employee in the overtime group and
the high employee will be considered a reasonable and fair distribution
of overtime among employees in the group. Overtime work offered and
refused will be counted as overtime worked. A record of overtime will be
kept up to date and posted in an accessible location to enable employees
to review. The overtime rules shall continue to be used as a means to
implement the fair distribution of overtime within an overtime group. An
employee can be on only one overtime list at a time.

In scheduled overtime situations where an employee is improperly
bypassed for overtime in violation of the Contract, the bypassed
employee will be compensated by awarding him the next overtime
assignment for which qualified.

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23

Alternate lists will be provided and time permitting, will be polled
prior to a compulsory assignment. The Company agrees to meet with the
Union to discuss and seek resolution of difficulties which may exist in
the administration of overtime distribution. These meetings between
Company management and the appropriate Union officials will be held on a
semiannual basis.

(b) Sleeping accommodations will be provided for these employees held over
on compulsory overtime assignments and who are without transportation.

(c) Employees held over past their scheduled quitting time will be provided
with a minimum of four (4) hours of work except in those instances where
tardy relief is the cause of the holdover. When necessary, an employee
on tardy relief will be furnished transportation home within a
reasonable time.

Section 7.

(a) An employee who is required to work overtime and who works ten (10) or
more continuous and successive hours (excluding the noon lunch period of
a day worker) will be paid a meal allowance of four dollars and
seventy-five cents ($4.75) which will be included in his regular pay
check. An additional meal allowance will be allowed for each four (4)
hours of consecutive work performed thereafter. In an employee is paid a
meal allowance and arrangements are not made for him to have time to eat
within the hour thereafter, he will be credited with thirty (30) minutes
additional work time

(b) No time will be deducted for lunch periods during such overtime work, it
being understood that they will be made as short as possible and in no
case exceed thirty (30) minutes.

Section 8.

(a) The following are recognized holidays: New Year's day, Xxxxxx Xxxxxx
Xxxx, Xx.'s Birthday, Good Friday, the last Monday in May, Independence
Day, Labor Day, Thanksgiving Day, the day following Thanksgiving Day,
Christmas Eve, and Christmas. Xxxxxx Xxxxxx Xxxx, Xx.'s Birthday is
observed on the third Monday in January; Companion to Independence Day
is observed Thursday, July 3, 1997; Thursday, July 2, 1998; Tuesday,
July 6, 1999; Wednesday, July 5, 2000; and Thursday, July 5, 2001. The
July 4th and Companion Day holiday will be taken back-to-back by
rotating shift workers electing the Companion

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Day Holiday. If any of the above holidays fall on Sunday, Monday shall
be recognized as the holiday. If any of the above holidays fall on
Saturday, the preceding Friday shall be recognized as the holiday except
that any employee normally scheduled to work on one of the above
recognized calendar holidays that fall on Saturday or Sunday, such
recognized calendar holiday will be his recognized holiday. If any of
the above holidays fall on an employee's scheduled off day, his first
succeeding scheduled work day shall be recognized as the holiday except
that where Thanksgiving Day or Christmas Eve falls on an employee's
scheduled off day, it will be recognized on the first preceding
scheduled work day.

(b) A rate of two and one-half (2-1/2) times the straight-time hourly rate
shall be paid for all hours worked on the eleven (11) recognized
holidays.

(c) Employees will be paid for recognized holidays not worked an amount
equivalent to eight (8) times the employees' straight-time hourly rate,
subject to the following conditions:

(1) Such pay shall be made to the employee only if the recognized
holiday would normally have been worked by the employee if it had
not been a holiday.

(2) An employee who is instructed to work on a holiday but who fails
to report and does not have an acceptable excuse, will receive no
pay for the holiday.

(3) To be eligible for holiday pay an employee must report for work
on his last regularly scheduled working day immediately preceding
the holiday and the first regularly scheduled workday immediately
following his holiday, unless excused by the Company.

(d) If a designated holiday occurs during an employee's vacation and that
employee would otherwise have been scheduled to work on that day had it
not been a holiday, such employee shall receive eight (8) hours pay at
his straight-time hourly rate in addition to his vacation pay. At the
request of the employee, the first-line manager may, at his discretion,
grant the employee an extra day off without pay immediately preceding or
following his vacation. Such days of absence will not be used for
corrective absentee control measures.

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Section 9. Double time will be paid for all hours worked on the seventh (7th)
consecutive day worked in any payroll week.

Section 10. Overtime premium shall not be duplicated for the same hours under
any of the terms of this contract, and to the extent that hours are compensated
for at overtime premium rate under one provision they shall not be counted as
hours worked in determining overtime compensation under the same or any other
provision.

Section 11. Employees may not trade shifts or days off except with the prior
approval of their respective first-line manager and further provided that no
overtime premium is involved.

Section 12. An employee who is called for jury duty may be excused from work
upon presentation of court notice to his immediate first-line manager. The
employee who has been so excused will be paid his normal straight-time earnings
and the fees received from the court, provided he submits evidence of the amount
received from the court. Only the number of his scheduled work days actually
spent in court are counted in calculating payment. Employees who would be
working the hours between 7:00 a.m. and 3:30 p.m. were they not on jury duty who
are not called at the opening of court for actual jury duty and who are excused
for the remainder of the day shall report to work within a reasonable time after
being excused. An employee will not be required to change shifts because of jury
duty.

Section 13. Employees who are unable to vote because of a conflict between
voting hours and scheduled working hours in a national, state, county, or
municipal election will be allowed sufficient time off to vote provided that
they are eligible to vote. Such eligible voting employees will be paid for such
absence for a period not to exceed two (2) hours.

Section 14. In determining if an employee is to be paid in accordance with
Section 3 and Section 9 of this Article VI, each of the holidays in Section 8,
which would ordinarily have been worked, and hours compensated for at time and
one-half (1-1/2) under Article VI, Section 2 (d), and those days for which an
employee is paid by the Company for jury duty in accordance with Section 12 will
court as a day worked. Also, fragmented vacation, funeral leave, and holiday
option days taken by an employee will count as a day worked in determining if an
employee is to be compensated at time and one-half for all hours worked in
excess of forty (40) hours within the applicable payroll week.

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Section 15.

(a) An employee excused for such time as may reasonably be needed for the
purpose of attending the funeral of a member of his immediate family
will be paid his basic straight-time hourly rate for any or all of three
(3) regularly scheduled workdays during the period beginning with the
day of death and ending with the day after such funeral. Under the
conditions established by the Contract, up to four (4) days will be
granted to attend a funeral more than five hundred (500) miles from
Paducah, Kentucky. As a special provision, in the event of the death of
an employee's spouse or child, the employee will be paid his/her basic
straight-time hourly rate for any or all four (4) regularly scheduled
work days during the period beginning with the day of death and ending
with the second day after such funeral.

For the purpose of this section, the term "a member of his immediate
family" shall be defined as, and limited to, the following: spouse,
children, parents, grandparents, grandchildren, step-parents, brother,
sister, stepbrother, stepsister, parents-in-law, son-in-law,
daughter-in-law, brother-in-law, sister-in-law, stepchildren and
grandparents and step-grandparents of the spouse of the employee.

(b) If a death occurs in an employee's immediate family while he is on
vacation, he should promptly notify his manager. The employee will be
permitted to cancel only those whole days of vacation remaining after
notification to his manager, providing he qualifies for funeral pay for
those days under this section.

ARTICLE VII
WAGES

Section 1.

(a) Effective 4:00 p.m. July 31, 1996, after adjusting rate group 26, 28 and
30 by $.30, all rates in all rate groups will be increased three and
two-tenths (3.2) percent. (Appendix A, Table 1A)

(b) Effective 4:00 p.m. July 31, 1997, all rates in all rate groups will be
increased three and two-tenths (3.2) percent. (Appendix A, Table 1B)

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(c) Effective 4:00 p.m. July 31, 1998, all rates in all rate groups will be
increased three and two-tenths (3.2) percent. (Appendix A, Table 1C)

(d) Effective 4:00 p.m. July 31, 1999, all rates in all rate groups will be
increased three and two-tenths (3.2) percent. (Appendix A, Table 1D)

(e) Effective 4:00 p.m. July 31, 2000, all rates in all rate groups will be
increased three and two-tenths (3.2) percent. (Appendix A, Table 1E)

(f) Any premium pay referred to in this contract is to be excluded from the
calculations of pay unless specifically included.

Section 2. An employee shall receive a shift premium of forty (40) cents per
hour for work performed on the evening shift (3:30 p.m. to 11:30 p.m.), and a
shift premium of seventy (70) cents per hour for work performed on the midnight
shift (11:30 p.m. to 7:30 a.m.) except that no shift premium shall be paid to
day shift employees for work performed between 7:00 a.m. and 3:30 p.m.

Section 3. There will be no discrimination because of sex in the application of
wage schedule.

Section 4. When an employee is transferred permanently to a job paying a higher
rate, he shall immediately receive the higher rate in accordance with Paragraph
(d), General Provisions, Appendix A.

Section 5.

(a) An employee who at the request of the Company is temporarily required to
do the work in a classification other than his own shall suffer no
reduction in his rate of pay.

(b) When an employee is assigned temporarily to a job in a higher
classification, the temporary reclassification and rate will be made
effective for all hours worked on the first day that an employee
performs work in the higher classification for two (2) or more hours.
When assigned to the new classification, the employee will be paid the
top rate of the new classification.

Section 6. An employee who works Saturday and/or Sunday as part of his normal
workweek, will receive an additional forty (40) cents per hour for such hours
worked

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on Saturday and an additional sixty (60) cents per hour for such hours worked on
Sunday. In no case shall such payment be applied to hours paid for at overtime,
holiday or premium rates.

Section 7. - Cost of Living Allowance (COLA)

All employees within the bargaining unit as defined in Article II of this
Agreement shall be covered by a Cost of Living Allowance as defined and set
forth in this Section.

(a) The amount of the Cost of Living Allowance shall be determined and
redetermined as provided below in accordance with changes in the Revised
Consumer Price Index for Urban Wage Earners and Clerical Workers
(1982-84 CPI-W = 100) published by the Bureau of Labor Statistics of the
United States Department of Labor, and referred to herein as "Index."
The Cost of Living Allowance shall be based on a one (1) cent per hour
adjustment for each full 0.1 point change in the Index as provided
herein.

(b) (1) After July 31, 1996, Cost of Living adjustments shall be made and
shall be payable quarterly when/and if the Index increases in
excess of four (4) percent of the base index described below. The
base to calculate the initial adjustment which may be due under
this Section shall be the Index for June of 1996 (published in
July of 1996). Adjustments shall be made November 4, 1996;
February 3, 1997; May 5, 1997; and August 4, 1997 if appropriate.

(2) After July 31, 1997, Cost of Living adjustments shall be made and
shall be payable quarterly when/and if the Index increases in
excess of four (4) percent of the base index described below. The
base shall be the Index for June of 1997 (published in July of
1997). Adjustments shall be made November 3, 1997; February 2,
1998; May 4, 1998; and August 3, 1998 if appropriate.

(3) After July 31, 1998, Cost of Living adjustments shall be made and
shall be payable quarterly when/and if the Index increases in
excess of four (4) percent of the base index described below. The
base to calculate the initial adjustment which may be due under
this Section shall be the Index for June of 1998 (published in
July of 1998). Adjustments shall be made November 2, 1998;
February 1, 1999; and May 3, 1999 if appropriate.

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(4) After July 31, 1999, Cost of Living adjustments shall be made and
shall be payable quarterly when/and if the Index increases in
excess of four (4) percent of the base index described below. The
base to calculate the initial adjustment which may be due under
this Section shall be the Index for June of 1999 (published in
July of 1999). Adjustments shall be made November 1, 1999;
February 7, 2000; and May 1, 2000 if appropriate.

(5) After July 31, 2000, Cost of Living adjustments shall be made and
shall be payable quarterly when/and if the Index increases in
excess of four (4) percent of the base index described below. The
base to calculate the initial adjustment which may be due under
this Section shall be the Index for June of 2000 (published in
July of 2000). Adjustments shall be made November 6, 2000;
February 6, 2001; and May 7, 2001 if appropriate.

(c) In computing overtime pay, vacation pay, holiday pay, call-in pay,
disability pay, jury duty pay, funeral leave pay, and military makeup
pay as provided in this Agreement, the amount of any Cost of Living
Allowance then in effect shall be included.

(d) In the event that the Bureau of Labor Statistics does not issue the
Index on or before the beginning of the pay period referred to in
Paragraph (b) above, any adjustment required will be made at the
beginning of the first pay period after receipt of the Index.

(e) No adjustment, retroactive or otherwise, shall be made in the amount of
the Cost of Living Allowance due to any revision which may later be made
in the published figures for the Index for any month on the basis of
which the Cost of Living has been determined.

(f) The continuance of the Cost of Living Allowance as herein provided is
dependent upon the continued availability of the official monthly Index
in its present form and calculated on the same basis as the currently
published Revised Consumer Price Index for Urban Wage Earners and
Clerical Workers (1982-84 CPI-W = 100) unless otherwise agreed upon by
the Company and the Union.

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(g) COLA being paid shall be considered as wages for the purpose of pension,
group insurance and savings plan.

Section 8.

Employees required to perform a shift turnover will be paid two times the
straight time hourly rate for each twelve minute shift turnover completed.

ARTICLE VIII
LAYOFF ALLOWANCE

Section 1. Layoff allowance for an employee terminated from the payroll on
account of reduction in force or because of occupational or nonoccupational
disability shall be in accordance with the following schedule:

Service Credit Allowance
-------------- ---------

Under 12 weeks No allowance

12 weeks - 1 year Same proportion of 1 week's pay as
completed months of service are of 12
months

1 year - 3 years 1 week (or 40 hours)

3 years - 5 years 2 weeks (or 80 hours)

5 years - 7 years 3 weeks (or 120 hours)

7 years - 10 years 4 weeks (or 160 hours)

10 years 6 weeks (or 240 hours)

11 years or more Same as for 10 years plus 1 week
(or 40 hours) for each added year
of service

Section 2. An employee who is rehired and subsequently laid off from the payroll
will receive layoff allowance based on his most recent rehire date.

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Section 3. A layoff allowance applicable to retirement terminations will be paid
in accordance with the Table in Section 1 of this Article for Company Service
Credit as of January 1, 1967. Retirement layoff allowance will not be applicable
to any new employee nor for Company Service Credit of present employees accrued
after January 1, 1967.

Section 4. If the contract between the government and Lockheed Xxxxxx Utility
Services, Inc., is terminated and not renewed during the term of this contract
and an employee becomes the employee of a successor contract or within ten (10)
days of the date of change in contractors, layoff allowance will not be payable
to such transferred employee by Lockheed Xxxxxx Utility Services, Inc. It is
understood that any employee who may be so transferred and laid off by the
successor contractor during the term of this contract shall suffer no loss of
benefits accrued under this Article. If an employee is not transferred to the
successor contractor within the above-mentioned ten (10) days and is laid off,
he will receive benefits from Lockheed Xxxxxx Utility Services, Inc. as set
forth in this Article.

ARTICLE IX
DISABILITY PAY
(Effective as listed below through September 30, 1996;
thereafter, refer to the Administrative Letter on page 82 and
"Major Features comparison of Current and Proposed Benefits Plans",
pages 48-67, for any modifications to this section.)

Section 1. Short Term Disability Plan

Effective September 1, 1990, an employee disabled and unable to work due to
illness, pregnancy, or occupational or nonoccupational injury, will be paid 100%
of his basic straight-time hourly rate in accordance with the terms and
conditions of the Short Term Disability Plan set forth in the "Disability
Benefits" section of the Xxxxxx Xxxxxxxx Energy Systems, Inc. Benefits
Handbook", dated April 1, 1990 (pages 39 through 45, inclusive, of such booklet
to be considered a part hereof) which provides for payment in accordance with
following schedule:

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Maximum Number of Months of
Company Service Credit Payment Per Absence
---------------------- ----------------------------

at least 1 month but less than 2 months 1

at least 2 months but less than 3 months 2

at least 3 months but less than 4 months 3

at least 4 months but less than 5 months 4

at least 5 months but less than 6 months 5

at least 6 or more months 6

Section 2. Long Term Disability Plan

Effective September 1, 1990, an employee totally disabled for six months will
become eligible to receive sixty percent (60%) of his monthly basic straight
time rate up to a specified maximum monthly benefit paid in accordance with the
terms and conditions of the Long Term Disability Plan set forth in the
"Disability Benefits" section of the "Xxxxxx Xxxxxxxx Energy Systems, Inc.
Benefits Handbook" referred to in Section 1 above and will be paid, if he is
totally and permanently disabled as defined in the above-referenced handbook,
until he reaches age 65. Under specified circumstances, such benefits will
continue beyond age 65. Such benefits will be reduced by any income benefits the
employee is eligible to receive from other sources such as Social Security,
Worker's Compensation, other statutory benefits, and other Company benefit
plans.

If a dispute arises as a result of an employee's claim that he or she is totally
and permanently disabled as defined in the above-referenced handbook or that
such employee continues to be totally and permanently disabled the dispute shall
be resolved in the following manner upon the filing with the Company of a
written request for review by such employee not more than 60 days after receipt
of denial:

The employee shall be examined by a physician appointed for the purpose by the
Company and by a physician appointed for the purpose by the Union. If they
disagree concerning whether the employee is totally and permanently disabled,
the question shall be submitted to a third physician selected by such two
physicians. The medical opinion of the third physician, after examination by him
or her of the employee and consultation

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with the other two physicians, shall be final and binding on the Company, the
Union, and the employee. The fees and expenses of the third physician shall be
shared equally by the Company and the Union.

Section 3. Conditions of Payment

(a) Payments under the Short Term and Long Term Disability Plans referred to
in Sections 1 and 2 of this Article will not be made for:

(1) Any disability occurring during the first 12 months that the
employee's plan coverage is in effect if caused by any condition
for which he received treatment during the three month period
before his coverage became effective, or

(2) Any period of incapacity beyond the third consecutive calendar
day during which the employee is not under treatment by a
licensed practicing physician, or

(3) Any disability caused directly or indirectly by war declared or
undeclared, or

(4) Any intentionally self-inflicted injury, or

(5) Any disability resulting from commission of a felony, or

(6) Any disability due to willful misconduct, violation of plant
rules, or refusal to use safety appliances.

(b) Payments under these plans will be made only to employees whose absence
is due to nonoccupational or occupational disability and will not be
paid to employees who are absent for other reasons.

(c) Payments will only be made when the Company is provided, if it so
requests, with a doctor's certificate, subject to confirmation by a
doctor selected by the Company, as proof that the employee's absence was
due to legitimate nonoccupational or occupational illness or injury.
Under normal circumstances, a doctor's certification will not be
requested by the Company during the first three consecutive calendar
days of the absence. However, certification may be

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requested by the Company for any or all of the first three days if the
Company has reason to question the absence.

(d) Payments will only be made when employees properly report their absence
and the cause of their absence to the proper Company representative in a
prompt manner.

(e) Payments are applicable only for the normal workweek and normal work
day. In case working hours of the plant are changed, it is understood
that payment under the above schedule will be changed in direct
proportion to the change in working hours.

(f) It is recognized by the Union that the Company has a continuing interest
in reducing absenteeism, no matter what the cause.

Section 4. Administration of Plans

(a) Short Term Disability Plan

The administration of the Short Term Disability Plan and the payment of
benefits under this plan shall be handled by the Company.

(b) Long Term Disability Plan

The administration of the Long Term Disability Plan and the payment of
benefits under this Plan shall be handled directly by the Insurance
Company, it being understood that a claimant whose benefits claim is
denied may contest such denial with the Insurance Company but that he or
she shall have no redress whatsoever against the Company. It is agreed,
however, that in any case in which an employee claiming benefits under
this Plan and desiring to file such claim with the Insurance Company
becomes engaged in a nonmedical factual dispute with the Company in
connection with such claim (such as a disagreement over his or her
earnings group, eligibility, employment status, amount of Company
Service Credit or other nonmedical factual question) such employee and
the Union may process a grievance in accordance with the terms of this
Contract. It is agreed, however, that any and all medical questions in
dispute shall be determined solely by the Insurance Company, except as
provided under the second paragraph of Section 2 of this Article. It is
understood that the Company shall retain the right to select and arrange
with an Insurance Company

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to provide certain benefits available under these Plans; and to replace
the Insurance Company from time to time as it may deem appropriate.

Section 5. Company Service Credit During Approved Nonoccupational or
Occupational Absences

An employee who is disabled and unable to work will receive Company Service
credit for the period of his Short Term Disability approved by the Company
and/or the period of his Long Term Disability approved by the Insurance Company.

ARTICLE X
LEAVE OF ABSENCE

Section 1. Leave of absence, without pay, up to fifteen (15) consecutive
calendar days shall be granted upon presentation by an employee of evidence
acceptable to the Company that such leave of absence is for a reasonable
purpose, and provided further that such leave will not interfere with
operations.

Section 2.

(a) Upon written request to the Company made by the Union a reasonable
period in advance, an employee certified by the Union to be a full-time
Union official may be granted a leave of absence without pay to engage
in work pertaining to the business of the Union. The number of
employee's granted such leaves of absence may not exceed six (6) per
thousand (1000) employees at any time.

(b) An employee certified by the Union to be a full-time Union official
shall be granted not more than one (1) thirty (30) day leave of absence
in any calendar year renewable only in increments of two (2) years if an
official elects to accept a full-time assignment with the Union. Such
leaves shall be granted only at such times as will not interfere with
operations. The Company will give advance notice of the expiration of
the long-term [two (2) years] leave.

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Section 3.

(a) An employee who returns to work after a leave of absence as described in
Sections 1 and 2 of this Article will be reinstated in the job
classification group which he left and for which he is physically
qualified provided he has more seniority than the least senior employee
in said job classification.

(b) Unless excused, an employee who does not return to work within five (5)
days following the expiration of his leave of absence will be considered
as having resigned voluntarily and will forfeit all of his seniority
rights.

Section 4. The Group Insurance of an employee will be continued in force during
such authorized leave of absence in case and in such manner as the provisions of
the Company Group Insurance contract permit, provided that he pays his share of
the Group Insurance premium at least monthly in advance.

Section 5. The Hospitalization and Surgical Plan Insurance of an employee will
be continued in force during such authorized leave of absence in case and in
such manner as the provisions of the Company Insurance Contract permit provided
that he pays the full premium at least monthly in advance.

Section 6. The Company will comply with the Family and Medical Leave Act of
1993.

ARTICLE XI
VACATIONS

Vacation eligibility is as follows:

(a) An employee must complete one (1) year of Company Service Credit to
obtain initial eligibility for two (2) weeks vacation. However, one (1)
week of this initial vacation eligibility maybe taken after completing
six (6) months of Company Service Credit.

(b) During calendar years in which an employee completes from two (2)
through four (4) years of Company Service Credit, he shall receive two
(2) weeks of vacation.

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(c) During calendar years in which an employee completes from five (5)
through nine (9) years of Company Service Credit, he shall receive three
(3) weeks of vacation.

(d) During calendar years in which an employee completes from ten (10)
through nineteen (19) years of Company Service Credit, he shall receive
four (4) weeks of vacation.

(e) During calendar years in which an employee completes from twenty (20)
through twenty-nine (29) years of Company Service Credit, he shall
receive five (5) weeks of vacation.

(f) During calendar years in which an employee completes thirty (30) or more
years of Company Service Credit, he shall receive six (6) weeks of
vacation.

(g) The Vacation Plan shall be administered in accordance with the vacation
regulations contained in Appendix D, attached hereto and made a part
hereof.

ARTICLE XII
SENIORITY

Section 1. Definitions:

(a) A vacancy is said to exist in a job classification when there is a need
for a permanent replacement or addition.

(b) An employee is said to be laid off when he leaves a job classification
because of a reduction in force.

(c) The recall listing is defined as that list on which an employee will be
placed at the time he is laid off from a job classification.

(d) For recall purposes, an employee will be placed on the recall list of
the job classification from which he was laid off, or if he so elects in
writing to the Company his base job classification, or any other job
classification from which he has been laid off in which he has been for
at least four (4) years.

(e) An employee's base job classification group is that group into which he
is hired.

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Section 2.

(a) Plant seniority is based on the total length of service of an employee.
The seniority of each employee is his relative position with respect to
other employees.

(b) Group seniority is administered within the job classification groups
outlined in Appendix C.

(c) A new employee shall be considered a probationary employee for the first
sixty (60) days worked and at the end of that period, if he is retained,
his name will be placed on the Seniority List and his seniority shall
date from the date of hire. A probationary employee shall be subject to
layoff, discipline, or discharge at the sole discretion of the Company.

(d) An employee will lose his seniority when he is discharged, when he
resigns, or when he is on the recall listing and declines or fails to
report within five (5) days or makes satisfactory arrangements when
offered employment in job classification from which he was laid off
except that an employee who is on the payroll in another job in the
bargaining unit when recalled, will lose only his recall rights to the
job to which he is recalled when he does not respond to the recall.

(e) An employee or a former employee who is on the recall listing shall
continue to accumulate seniority while off the payroll only up until
four (4) years from his layoff date. If a former employee is not
recalled within four (4) years from the date of layoff he will cease to
have seniority. An employee who is not recalled within four (4) years
from the date of layoff will lose only his recall rights.

(f) Employees will retain and accumulate seniority during periods of excused
absence or leave of absence.

(g) (l) When an employee enters a job classification group by transfer
from another group, he will acquire group seniority in the group
which he has entered only after he has been in such group one (1)
year. Such group seniority shall then date back to his date of
entry into the group. The seniority which he has accumulated in
his base job classification group shall remain in that group as
group seniority. Should such employee become subject to layoff in
the new group he may elect to return to his base job
classification group with all the seniority he retains in his
base

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job classification group plus seniority which he has accumulated
in any other groups. As between employees in a job classification
who have not yet acquired group seniority, total plant seniority
will prevail in a case of a layoff.

(2) If an employee is laid off from one job classification and
accepts a transfer to another classification, his standing in the
new job classification will not be affected by later layoffs in
his previous job classification. Any job that an employee takes
when there is a layoff in his job classification, in which he is
involved to avoid termination, will not be considered a voluntary
transfer.

(3) If more than one (l) employee is transferred into a new job
classification on the same day they will be placed on the
seniority list in the new job classification according to their
bargaining unit seniority.

(4) Employees, other than those referred to in Section 4 (d) below
and Trainees, who voluntarily transfer into a job classification,
and, if before they have obtained seniority right in said job
classification a layoff occurs in his previous job
classification, he shall be subject to layoff as though he were
still in his previous job classification.

Section 3.

(a) When a reduction in force is to be made in any job classification within
a job classification group, the employee having the least amount of
group seniority in the job classification shall be the first to be laid
off. Any employee thus scheduled to be laid off may displace, if he so
desires:

The least senior (group) employee in an equal or lower-rated job
classification in the same job classification group whose work he has
the skill and qualifications to perform.

(b) When a reduction in force is to be made in any job classification, the
following employee in that job classification group may be retained
irrespective of seniority.

A physically handicapped employee who by reason of occupational injury
while employed by the Company merits special consideration.

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(c) In the event of a layoff the Union will be notified prior to the layoff
and will be given a list of names of employees who are to be laid off as
far in advance as possible. Also, at the time the list is being typed,
the Union President will be notified.

Section 4.

(a) When a vacancy exists the job will be offered to employees laid off from
the job classification in the following order:

(l) To qualified employees who are still in the job classification
group.

(2) To qualified employees with seniority in the job classification
group, who are on the recall listing in the order of their
seniority.

(b) If the vacancy has not been filled by the procedure outlined above or by
promotion from within the job classification group, consideration will
be given to senior qualified employees in lower rated job
classifications who make application for such vacancies within ten (10)
calendar days following posting of such vacancies.

(c) A list of vacancies will be posted on the bulletin boards specifying job
titles, general qualifications, rates of pay, and hours of work.
Qualified employees in lower rated jobs within the plant may make
application for such vacancies within ten (10) calendar days following
such posting. An employee interested in bidding may request an
appropriate job bid form from his manager who will assist him in
submitting his bid to the Employment Office for evaluation. The Union
will receive a list of all job bids which are accepted or rejected. When
an employee is selected and accepts a job bid and the employee is not
released within thirty (30) calendar days from the date of his
acceptance, the bidder will then be reclassified, paid the new rate, and
given a new seniority date. However, in no case shall a new hire be
placed on the seniority list ahead of a successful bidder or a non-union
employee who has expressed interest in that particular job bid and has
been selected for the job.

(d) An employee selected to fill a new job or vacancy will be given
reasonable time, not more than twelve (12) weeks, with proper
instructions, to learn the job before final decision is made of his
ability to handle the job.

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(e) If it develops before the end of the twelve (12) week period that he is
not capable of handling the new job, he shall be entitled to return to
his former job with his former status.

(f) If none of the above employees are qualified or available, the Company
may fill the job as it sees fit.

Section 5.

(a) Employees who transfer out of the bargaining unit after the effective
date of this contract cease to have any bargaining unit seniority thirty
(30) calendar days after such transfer. If such employee so wishes, he
may return to the bargaining unit within this thirty (30) day period
without loss of seniority.

(b) Individuals who, as of July 31, 1979, had past accumulated seniority
rights under Article XII, Section 5 of the collective bargaining
agreement in effect on that date will be permitted to indicate in
writing a desire to retain those rights for a nine (9) month period
beginning August 24, 1979. Individuals who do not signify such a desire
in writing will cease to have any seniority as of September 24, 1979.
Those employees who do retain rights for the nine (9) month period
mentioned above, will cease to have such rights as of May 24, 1980. A
list of individuals retaining such seniority after September 24 will be
provided the Union.

Section 6.

(a) The Company and Union will establish a recall listing of laid off
employees.

(b) The Company and Union will establish seniority listings (Group and
Bargaining Unit) showing the name of all employees in the order of their
seniority ranking in the various classifications in the job
classification groups in which the employee holds seniority.

(c) The Company will maintain the two (2) listings and give the Union
forty-five (45) copies of each listing for their sole and exclusive use
within forty-five (45) days after the effective date of this contract,
and a list of revisions each three (3) months thereafter. No changes in
these two (2) listings may be made except by mutual agreement between
the Company and the Union.

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Section 7.

(a) Transfers will not be made for the specific purpose of discriminating
against an employee.

(b) Work normally associated with one classification in this Plant will not
be transferred permanently to another classification in this Plant. When
he requests, a Union representative will be informed as to whether
transfer of work is temporary or permanent. In no case will the transfer
of work deny the use of the recall list for a period longer than thirty
(30) calendar days. All work normally associated with a classification
will be returned to the rightful classification before layoff occurs in
that classification. The time a job has been performed on an
out-of-classification basis will not be used exclusively in making a
determination into which classification the work belongs in case of a
layoff.

ARTICLE XIII
GRIEVANCE PROCEDURE

Section 1.

(a) The Company will recognize the following number of properly certified
Union representatives in the Plant for the purpose of representing
employees in the manner as specified in this Grievance Procedure:

Three (3) Committee persons, one (1) from each of the three (3)
recognized Divisions of the Plant as shown in Appendix B who, with the
local President as Chairperson, shall constitute the Grievance
Committee.

Twenty-four (24) Stewards, from the twenty-four (24) recognized
Districts are shown in Appendix B.

(b) Employees thus duly certified and recognized as Union representatives
shall report to and obtain permission from their first-line manager
whenever it becomes necessary to leave their work for the purpose of
handling grievances in their respective Divisions or Districts, and
shall inform their first-line manager of their intended destination and
itinerary and shall report back to their first-line manager at the time
they return to work. Upon request, certified Union representatives may
be granted use of the telephone at reasonable times to

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handle grievances within their respective Districts or Divisions.
Certified Union representatives may be excused for reasonable periods
from their work without loss of pay when handling grievances or disputes
in the appropriate steps of this Grievance Procedure. The Local Union
President, or his designated representative, may be excused for
reasonable periods from work without loss of pay when handling
grievances in the Third Step of this Grievance Procedure. Permission to
leave work as referred to above will be granted provided such absences
do not conflict with the efficient operation of the plant.

Section 2.

First Step: An employee may allege a grievance under the terms of this contract
and present such grievance to his first-line manager with or without his Union
Xxxxxxx. In such case every effort will be made to provide a Xxxxxxx as soon as
reasonably possible unless near the end of the shift time will not permit.
Unless settlement is reached within four (4) days (the Xxxxxxx will receive the
answer), such grievance may be presented by the Stewards in writing to the
first-line manager on an appropriate form within the next seven (7) days. The
first-line manager shall give his decision in writing to the Xxxxxxx within two
(2) days of presentation.

Second Step: A grievance not settled satisfactorily in the First Step may be
appealed by the Division Committee person with a copy of the written grievance
and a written statement of the reasons for the appeal to the Employee Relations
Department.

On Wednesday at 2:00 p.m. the Employee Relations Manager or his designated
representative will hear any accumulated grievances appealed in writing to this
Step at least twenty-four (24) hours prior to the meeting. The Employee
Relations Manager will consider such grievances and give written answer within
four (4) days. This meeting may be attended by other Company representatives,
including the immediate first-line manager of the employee, the Xxxxxxx, and the
Committeeperson from the respective District and Division wherein the grievance
originated.

Grievances arising out of discharge or disciplinary suspension may be initiated
at this Second Step and heard at any reasonable time after an employee has
protested the action to his immediate first-line manager and has failed to
secure a satisfactory settlement. When an employee is called into a discussion
which may result in disciplinary documentation including reprimand, suspension
or being sent home, he will be provided Union representation if he so requests.
A copy of the First-line Manager's Report prepared will be furnished to the
Union.

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Third Step: Grievances not settled satisfactorily in the Second Step may be
appealed by the Chairperson of the Grievance Committee or his designated
employee representative to the General Manager or his designated representative
through the Employee Relations Department with a brief written statement of the
reasons for the appeal.

On Monday at 2:00 p.m., the General Manager, or his designated representative,
will meet with the Grievance Committee if there are any accumulated grievances
appealed in writing to this Step at least twenty-four (24) hours prior to the
meeting. Grievances will be answered in writing within ten (10) days.

In addition to the aggrieved employee, and the Xxxxxxx from the District, who
may be present if he chooses, other Company representatives, International
Representatives of the Union, and the Local Union President, or his designated
representative may also attend the meeting, provided they have security
clearance from the Governmental Agency having jurisdiction if that Agency feels
that such clearance is necessary.

Section 3. The answer of the Company in the Third Step shall be final and
binding on the last day it is due unless the grievance is withdrawn prior to
that date or is appealed to arbitration.

Section 4. Any grievances not taken up with the employee's immediate first-line
manager within fifteen (15) days, exclusive of days of excused absence, after
knowledge of the occurrence from which the grievance arose cannot thereafter be
processed through the Grievance Procedure. A grievance will be considered
withdrawn if the decision of the Company is not appealed to the next higher step
in the above procedure within five (5) days after a decision has been rendered
by the Company except that appeal to the Third Step may be made within ten (10)
days. If the Company fails to answer a grievance within the specified time
limits of this procedure, the Union's appeal will automatically progress to the
next step of the Grievance Procedure.

Section 5. Every reasonable effort shall be made to settle grievances promptly.
In the calculation of time limits under the Grievance and Arbitration Procedure,
Saturdays, Sundays, and Holidays are excluded.

Section 6. The Union shall notify the Company in writing promptly of the
appointment or election of all Stewards, Committeepersons and officers. Whenever
a regular certified Union representative is absent from his job for any length
of time, the Union may, if it feels it is necessary, appoint an assistant
Xxxxxxx or Committeeperson

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in place of the regular Xxxxxxx or Committeeperson and shall notify the Company
in writing in advance.

This appointee shall act in this capacity when the regular Xxxxxxx or
Committeeperson is not working and until the Company is notified by the Union
that the appointment is canceled.

Section 7. All settlements of disputes or grievances will not vary the terms of
the Contract.

Any oral settlements will be non-precedent setting.

ARTICLE XIV
ARBITRATION

Section 1. If a grievance is not satisfactorily settled by the procedure
outlined in Article XIII, the grievance may be submitted to arbitration if it
involves the interpretation or application of the contract.

Section 2.

(a) Within fifteen (15) days or on the day after the next monthly Union
meeting whichever is later, after the decision rendered by the Company
in the Third Step of the Grievance Procedure either party desiring to
arbitrate a matter may request the Director of the Federal Mediation and
Conciliation Service to submit the names of seven (7) arbitrators. Upon
refusal of either party to join in such a request the other party may
make the request. The Union and the Company shall alternately strike a
name from the list (the first to strike shall be determined by lot)
until the name of one individual remains. The decision of the arbitrator
shall be rendered on the interpretation and application of the contract
solely as it applies to the matter before him and shall not add to,
disregard or modify any of the provisions of this contract. Such
decision shall be final and binding on both parties.

(b) Any grievance which has not been assigned to and accepted by an
arbitrator within two (2) years after the date of appeal to arbitration
will be considered withdrawn by mutual consent on a no precedent basis.

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(c) The current backlog of grievances will be worked independently of new
grievances. Any grievances not resolved and not scheduled for
arbitration within two (2) years following the effective date of this
Contract will result in the grievances being withdrawn by mutual consent
without precedent.

Section 3. The expense and compensation of the arbitrator shall be borne by and
divided equally between the Union and the Company. Where the arbitration
proceedings involve discussion of classified information, the arbitrator shall
be cleared by the Government Agency having jurisdiction if the Agency feels that
such clearance is required. Up to two (2) arbitration cases may be arbitrated at
one time using the same Arbitrator.

Section 4. In any proceedings under this Article the Company will make every
reasonable effort to release from work employees needed as witnesses.

Section 5. Arbitration cases will be requested to be heard within ninety (90)
days after an arbitrator has been selected. It is agreed that the parties will
jointly request the rendering of a decision within thirty (30) days after briefs
have been filed.

ARTICLE XV
MISCELLANEOUS

Section 1.

(a) Non-bargaining unit personnel shall not do bargaining unit work normally
performed exclusively by the bargaining unit. This does not prevent such
Non-bargaining unit personnel from performing necessary functions such
as instruction or assistance to employees, provided the assistance
rendered does not displace the person doing the work or from operating
equipment or processes in emergencies or for experimental purposes.

(b) Scientific research personnel may perform manual work to further their
research provided that such work does not deprive an employee of his
job.

Section 2. A joint Labor-Management Safety Advisory Committee consisting of six
(6) members, three (3) to be selected by the Company and three (3) selected by
the Union, will be established to make recommendations for improvements in the
safety and accident prevention program.

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The Company will see that the Committee is provided adequate information
concerning accident investigation reports and recommendations for accident
prevention actions, to enable the members to make knowledgeable recommendations
for the disposition of proposed safety actions.

The Company will also, on request, make arrangements for the Committee to visit
the scene of any disabling or other serious accident so that they may have a
better understanding of its cause. In the same manner, the Company will arrange
for a designated member of the Committee to see firsthand, conditions in the
Plant which are alleged by an employee to be unsafe and/or detrimental to
health. If an accident investigation committee is formed to investigate an
accident involving a Bargaining Unit employee, the Union will designate as the
Union's representative a Bargaining Unit employee who normally works in the area
in which the accident occurred.

Company will discuss the results of the accident investigation of any disabling
or other serious accident with the Committee within three (3) days of completion
of the investigation. Accidents of less severity will be discussed at the next
joint advisory committee meeting.

The Company will pay three (3) delegates selected by the Union to attend the
Governor's Health and Safety Conference. A maximum of eight (8) hours
straight-time pay will be allowed for each of the three (3) days.

Meetings will be held as determined by the Committee, at least monthly, and
matters considered by the Committee will be recorded by minutes of the meetings.

Section 3.

(a) The Company will continue to make provisions for the safety and health
of employees while at work.

(b) On an annual basis starting January 1, 1997, the Company will pay
employees a $200.00 safety related equipment (safety shoes) allowance
less any required taxes. Employees will be paid the allowance in the
month in which their birthday occurs. Employees who are required to wear
safety shoes are required to maintain a serviceable pair of safety shoes
to wear on plant site.

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Section 4. Company Service Credit will be determined in accordance with Company
Service Credit Rules as set forth in Appendix E.

Section 5. The Union shall be permitted to use a sufficient number of designated
Company bulletin boards for posting notices and announcements of official
business. All such notices and announcements shall be submitted to the Company
for approval and posting.

Section 6. Personal absences without pay will be administered in accordance with
the provisions set out in Appendix F.

Section 7. There shall be no discrimination because of race, color, creed,
national origin or sex. Nor will there be discrimination against any employee
because he is handicapped, a disabled veteran or a veteran of the Vietnam era as
these terms are used in applicable federal statutes, including the Americans
with Disabilities Act.

Section 8. The Company agrees to make coveralls available to all members of the
bargaining unit who wish to wear them while at work. Thermal underwear will be
made available to all members of the Bargaining Unit who may be required to do
extensive outside work [two (2) hours or more per day] during the winter months.
Insulated coveralls and gloves will be issued upon approval of appropriate
first-line manager.

Section 9. Reprimands antedating a period of twelve (12) months on the active
payroll, during which time no reprimand has been received, will be removed from
the employee's record. Suspensions antedating a period of twenty-four (24)
months on the active payroll, during which time no reprimand has been received,
will be removed from the employee's record.

Section 10. Employees who are telephoned while at home and requested to provide
information about plant operations will be paid an inconvenience allowance equal
to the employee's straight time hourly rate for the duration of the telephone
call, but in no event less than one tenth of one hour. This payment shall not be
counted as hours of work in the computation of overtime or premium pay.

Section 11. During January of each calendar year, starting 1997, the company
will pay $250.00 to each qualified E-Squad member who had attended both the
mandatory training sessions in the prior calendar year.

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Section 12. A twenty-five (25) cent per hour premium will be paid for all Truck
Drivers who have a CDL.

Section 13.

(a) An employee will be released from work and paid straight time wages for
the hours 7:00 a.m. to 11:00 a.m. each Monday through Friday while
performing the duties of Benefit Representative.

(b) An employee, other than the Benefit Representative, will be released
from work and paid straight time wages for the hours 11:30 a.m. to 3:30
p.m. each Monday through Friday while performing the duties of ES&H
Representative.

ARTICLE XVI
EDUCATIONAL ASSISTANCE PROGRAM

Company will provide financial assistance up to one hundred (100) percent of the
cost of tuition, laboratory fees, and required text books to employees who while
still actively employed and outside their regular working hours satisfactorily
complete qualified courses of study related to bargaining unit work in
recognized schools or colleges. Applications must be filed and approved prior to
starting of course. An employee who is receiving Government financial assistance
for education is not eligible for a refund under this program.

ARTICLE XVII
TERM OF CONTRACT

Section 1. This contract is made and entered into by and between Lockheed Xxxxxx
Utility Services, Inc., Paducah Plant, Paducah, Kentucky, its successors or
assigns, and the Oil, Chemical and Atomic Workers International Union, AFL-CIO,
and its Local 3-550.

Section 2. This contract shall become effective as of 4:00 p.m., July 31, 1996,
and shall continue in effect until 7:00 a.m., July 31, 2001, and shall
automatically be renewed thereafter from year to year unless either party
notifies the other in writing sixty (60) days prior to the expiration date that
it desires to terminate or modify the provisions of this contract.

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IN WITNESS WHEREOF, each of the parties has caused this Contract to be executed
by its duly authorized representatives on this the 30th day of July, 1996.

OIL, CHEMICAL AND ATOMIC WORKERS
INTERNATIONAL UNION, AFL-CIO

BY: /s/ X. Xxxxxxx

OIL, CHEMICAL AND ATOMIC WORKERS
LOCAL 3-550

BY: /s/ X. X. Xxxxxx
/s/ X. X. Xxxxxx
/s/ X. X. Xxxxxxxx
/s/ X. X. Xxxxx
/s/ X. X. Xxxxxx
/s/ D. Belt
/s/ X. X. XxXxxxxx

LOCKHEED XXXXXX UTILITY SERVICES, INC.
PADUCAH GASEOUS DIFFUSION PLANT

BY: /s/ W. E. Xxxxxxxx
/s/ X. X. Xxxxxxxx
/s/ X. X. Xxxxxxxx
/s/ X. X. Xxxx
/s/ X. Xxxxxxxx
/s/ X. Xxxxxxxx
/s/ X. Xxxxxx
/s/ X. X. XxXxxxxx
/s/ X. Xxxxxxxx

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