BASIC AGREEMENT

THIS AGREEMENT, made this First day of August, 2004 by and between Empire Iron Mining Partnership, and Tilden Mining Company L.C., doing business together as Cliffs Michigan Mining Company or their successors, hereinafter collectively referred to as "the Company" and UNITED STEELWORKERS OF AMERICA, AFL-CIO, or its successors, hereinafter referred to as "the Union." The provisions of this Agreement shall become effective August 1, 2004 except as otherwise expressly provided herein.

The Union having been designated the exclusive collective bargaining representative of the employees of the Company as defined in Section II, Scope of the Agreement, the Company recognizes the union as such exclusive representative. Accordingly, the Union makes this Agreement in its capacity as the exclusive collective bargaining representative of such employees. The provisions of this Agreement constitute the sole procedure for the processing and settlement of any claim by an employee or the Union of a violation by the Company of this Agreement. As the representative of the employees, the Union may process grievances through the grievance procedure, including arbitration, in accordance with this Agreement or adjust or settle the same.

SECTION I: INTENT AND PURPOSE

The parties recognize that for their joint benefit, increases in wages and benefits should be consistent with the long term prosperity and efficiency of the steel and iron ore industries.

The parties are concerned that the future for these industries in terms of employment security and return on substantial capital expenditures will rest heavily upon the ability of the parties to work cooperatively to achieve significantly higher productivity trends than have occurred in the recent past. The parties are acutely aware of the impact upon the industries and their employees of the sizable penetration of the domestic steel market by foreign producers and the importation of foreign iron ores. Thus it is incumbent upon the parties to work cooperatively to meet the challenge posed by foreign competitors in recent years. It is also important that the parties cooperate in promoting the use of American-made steel.

It is the intent and purpose of the parties hereto to set forth herein the Basic Agreement between them for the term hereof covering rates of pay, wages, hours of employment and other conditions of employment to be observed between the parties hereto.

The representatives of the Company and the Union shall continue to provide each other with such advance notice as is reasonable under the circumstances on all matters of importance in the administration of the terms of this Agreement, including changes or innovations affecting the relations between the local parties.

SECTION II: SCOPE OF THE AGREEMENT

Subsection 1. Definitions

A. The term "mine" as used in this Agreement is understood to include mines, shops, and plants.

B. The term "employee" as used in this Agreement shall mean all production and maintenance employees of the Company, excluding foremen, assistant foremen who are not working foremen in the mine, supervisors in charge of any class of labor who are not working supervisors, policemen, watchmen (except employees who perform certain duties of a watchperson but a major portion of whose time is occupied by duties other than those of a watchperson), clerical and salaried employees. Provided, however, that during the term of this Agreement, the Company will not convert an hourly rate job which is within the bargaining unit to a salaried job where there is no substantial change in the job content, without agreement by the Union.

Subsection 2. Recognition

A. The Company recognizes the Union as the exclusive representative of all production and maintenance employees of the Company at said mines for the purpose of collective bargaining with respect to rates of pay, wages, hours of employment and other conditions of employment, but subject to and in accordance with applicable provisions of federal law.

B. The Company agrees that it will recognize the Union as the exclusive bargaining agency for similar employees in any other of the Company's iron ore mines in the Lake Superior region for whom the Union may, during the life of this Agreement, be certified by the National Labor Relations Board as the exclusive bargaining agent. It is mutually agreed that the appropriate Agreement now being entered into between the parties hereto for a similar mine in the same locality shall include such other employees at the similar mine as of the date the certification is received by the Company.

Subsection 3. New or Changed Jobs

When Management establishes a new or changed job in a mine so that duties involving a significant amount of production or maintenance work, or both, which is performed on a job within the bargaining unit (or, in the case of new work, would be performed on such a job) are combined with duties not normally performed on a job within the bargaining unit, the resulting job in the mine shall be considered as within the bargaining unit. This provision shall not be construed as enlarging or diminishing whatever rights exist in respect of withdrawal of non-bargaining unit duties from a job in the bargaining unit, provided that where non-bargaining unit duties are placed in a job in the bargaining unit under this provision, such duties may be withdrawn at any time. Management shall, on request, furnish to the Union reasonable information to permit determination of questions of compliance with the provision.

Subsection 4. Supervisors Working

Any supervisor at a mine shall not perform work on a job normally performed by an employee in the bargaining unit at such mine; provided, however, this provision shall not be construed to prohibit supervisors from performing the following types of work:

A. experimental work;

B. demonstration work performed for the purpose of instructing and training employees;

C. work required of the supervisors by emergency conditions which if not performed might result in interference with operations, bodily injury, or loss or damage to material or equipment; and

D. work which, under the circumstances then existing, it would be unreasonable to assign to a bargaining unit employee and which is negligible in amount.

E. Work which is incidental to supervisory duties on a job normally performed by a supervisor, even though similar to duties found in jobs in the bargaining unit, shall not be affected by this provision.

If a supervisor performs work in violation of this Subsection 4 and the employee who otherwise would have performed this work can reasonably be identified, the Company shall pay such employee the applicable Standard Hourly Wage Rate for the time involved or for four hours, whichever is greater.

Subsection 5. Temporary Supervisors

A. An employee who is assigned as a temporary Supervisor as of the effective date of this Agreement or who is thereafter so assigned shall not cease to be an employee, although assignment to such position and the terms and conditions of the employment applicable to the position shall continue to be solely as determined by the Company.

B. Such assignments shall be limited to:

1. The short-term absence of a Supervisor for reasons such as sickness, jury duty or vacation.

2. A Supervisor position resulting from increases in operating requirements over and above normal levels. Such a position shall not be filled by the assignment of any employee as a temporary Supervisor for a period in excess of ten (10) consecutive months, provided however, that such period shall be extended in view of special circumstances. Management shall inform the Grievance Committeeperson representing the department in which the position occurs of such extension.

3. Twenty-first shift coverage of continuous operations.

C. An employee assigned as a temporary Supervisor on a weekly basis will not work in the bargaining unit during the week in which s/he is assigned as a temporarySupervisor. An employee will not be assigned as a temporary Supervisor merely as a means of retaining them in employment or of recalling them from layoff at a time when the application of his/her bargaining unit seniority would not otherwise result in his/her retention in employment.

D. An employee assigned as a temporary Supervisor will not issue discipline to employees, provided that this provision will not prevent a temporary Supervisor from relieving an employee from work for the balance of the shift for alleged misconduct. An employee will not be called by either party in the grievance procedure or arbitration to testify as a witness regarding any event involving discipline which occurred while the employee was assigned as a temporary Supervisor.

Subsection 6. Contracting Out of Work

The parties recognize the seriousness of the problems associated with contracting out of work both inside and outside the mine and have accordingly agreed as follows.

The parties have existing rights and contractual understandings with respect to contracting out. In addition, the following provisions shall be applicable to all contracting out issues subject to, and arising on or after the effective date of, this Agreement.

A. Basic Prohibition

In determining whether work should be contracted out or accomplished by the bargaining unit, the guiding principle is that work capable of being performed by bargaining unit employees shall be performed by such employees. Accordingly, the Company will not contract out any work for performance inside or outside the mine unless it demonstrates that such work meets one of the following exceptions.

B. Exceptions

1. Work in the Mine

a. Production, service, all maintenance and repair work, all installation, replacement and reconstruction of equipment and productive facilities, other than that listed in Subparagraph B-1-b below, all within a mine, may be contracted out if (a) the consistent practice has been to have such work performed by employees of contractors and (b) it is more reasonable (within the meaning of paragraph C below) for the Company to contract out such work than to use its own employees.

b. Major new construction including major installation, major replacement and major reconstruction of equipment and productive facilities, at any mine may be contracted out subject to any rights and obligations of the parties which as of the beginning of the period commencing August 1, 1963, are applicable at the mine in the case of any mine which was in operation on or before August 1, 1958. With respect to any other mine, the period commencing date shall be the date five years after the date on which the mine started operations.

A project shall be deemed major so as to fall within the scope of this exception if it is shown by the Company that the project is of a grander or larger scale when compared to other projects bargaining unit forces at the mine are normally expected to do. Such comparison should be made in light of all relevant factors. In addition, distinct maintenance and repair items, distinct projects, or work on individual lines shall not be accumulated into a single item or project where the prevailing practice has been to treat such items or projects as separate or distinct.

As regards the term "new construction" above, except for work done on equipment or systems pursuant to a manufacturer's warranty, work that is of a peripheral nature to major new construction, including major installation, major replacement and major reconstruction of equipment and production facilities and which does not concern the main body of work shall be assigned to employees within the bargaining unit unless it is more reasonable to contract out such work taking into consideration the factors set forth in paragraph C or it is otherwise mutually agreed. For purposes of this provision, the term "work of a peripheral nature" may in certain instances include, but not be limited to demolition, site preparation, road building, utility hook-ups, pipe lines and any work which is not integral to the main body.

2. Work Outside the Mine

a. Should the Company contend that maintenance or repair work to be performed outside the mine or work associated with the fabricating of goods, materials or equipment purchased or leased from a vendor or supplier should be excepted from the prohibitions of this Subsection, the Company must demonstrate that it is more reasonable (within the meaning of paragraph C below) for the Company to contract for such work (including the purchase or lease of the item) than to use its own employees to perform the work or to fabricate the item.

Notwithstanding the above, the Union recognizes that as part of the Company's normal business, it may purchase standard components or parts or supply items produced for sale generally ("shelf items"). No item shall be deemed a standard component or part or supply item if:

i. Its fabrication requires the use of prints, sketches or detailed manufacturing instructions supplied by the Company or at the Company's behest or by another company engaged in producing iron ore or it is otherwise made according to detailed Company specifications or those of such other company; or

ii. it involves a unit exchange; or

iii. it involves the purchase of electric motors, engines, transmissions, or converters under a core exchange program (whether or not title to the unit passes to the vendor/purchaser as part of the transaction), unless such transaction is undertaken with an original equipment manufacturer, or with one of its authorized dealers, provided that the items in the core exchange program that are sold to the Company are rebuilt using instructions and parts supplied by the original equipment manufacturer (or, if the part or parts are not stocked by the original equipment manufacturer, approved by such manufacturer).

It is further provided that adjustments in the length, size or shape of a shelf item, so that it can be used for a Company specific application, shall be deemed for the purposes of this Section II, Subsection 6-B-2-a to be fabrication work performed outside the plant.

With respect to shelf items, the Company may purchase goods, materials and equipment, where the design or manufacturing expertise involved is supplied by the vendor as part of the sale.

b. Production and maintenance work may be performed outside the mine only where the Company demonstrates that it is unable because of lack of capital to invest in necessary equipment or facilities, and that it has a continuing commitment to the iron mining business. In determining whether there is capital to invest in particular equipment or facilities, the Company is entitled to make reasonable judgments about the allocation of scarce capital resources among its mines represented by the Union and their supporting facilities.

3. Mutual Agreement

Work contracted out by mutual agreement of the parties pursuant to paragraph G below.

C. Reasonableness

In determining whether it is more reasonable for the Company to contract out work than use its own employees, the following factors shall be considered:

1. Whether the bargaining unit will be adversely impacted.

2. The necessity for hiring new employees shall not be deemed a negative factor except for work of a temporary nature.

3. Desirability of recalling employees on layoff.

4. Availability of qualified employees (whether active or on layoff) for a duration long enough to complete the work.

5. Availability of adequate qualified supervision. Bargaining unit employees in crew coordinator or equivalent positions shall be considered in applying this factor.

6. Availability of required equipment either on hand or by lease or purchase, provided that either the capital outlay for the purchase of such equipment, or the expense of leasing such equipment, is not an unreasonable expenditure in all the circumstances at the time the proposed decision is made.

7. The expected duration of the work and the time constraints associated with the work.

8. Whether the decision to contract out the work is made to avoid any obligation under the collective bargaining agreement or benefits agreements associated therewith.

9. Whether the work is covered by a warranty necessary to protect the Company's investment. For purposes of the subparagraph, warranties are intended to include work performed for the limited time necessary to make effective the following seller guarantees:

a. Manufacturer guarantees that new or rehabilitated equipment or systems are free of errors in quality, workmanship or design.

b. Manufacturer guarantees that new or rehabilitated equipment or systems will perform at stated levels of performance and/or efficiency subsequent to installation.

For equipment or systems ordered after August 1, 1999, and for the purposes of this factor only, the warranties referenced in a. and b. above may not be relied upon by the Company for more than 18 months following acceptance; provided, however, warranties of a longer duration may be relied upon if the Company (i) demonstrates that at the time of the sale such longer warranties are the manufacturer's published standard warranties actually offered to customers in the normal course of business; and (ii) reviews the documents relating to the warranty and the sales price with the union members of the contracting out committee at or near the time of the purchase.

Warranties are commitments associated with a particular product or service in order to assure that seller representations will be honored at no additional cost to the Company. Long term service contracts are not warranties for the purposes of this subparagraph.

10. In the case of work associated with leased equipment, whether such equipment is available without a commitment to use the employees of outside contractors or lessors for its operation and maintenance.

11. Whether, in connection with the subject work or generally, the local union is willing to waive or has waived restrictive working conditions, practices or jurisdictional rules (all within the meaning of "local working conditions" and the authority provided by this Agreement).

D. Contracting Out Committee

1. At each mine a regularly constituted committee consisting of not more than four persons (except that the committee may be enlarged to six persons by local agreement), half of whom shall be members of the bargaining unit and designated by the Union in writing to the Management and the other half designated in writing to the Union by the Management, shall attempt to resolve problems, in connection with the operation, application and administration of the foregoing provisions.

2. In addition to the requirements of the paragraph E below, such committee may discuss any other current problems with respect to contracting out brought to the attention of the committee.

3. Such committee shall meet at least one time each month.

E. Notice and Information

Before the Company finally decides to contract out an item of work as to which it claims the right to contract out, the Union committee members will be notified. Except as provided in paragraph J below (Shelf Item Procedure), such notice will be given in sufficient time to permit the Union to invoke the Expedited Procedure described in paragraph H below, unless emergency situations prevent it. Such notice shall be in writing and shall be sufficient to advise the Union members of the committee of the location, type, scope, duration and timetable of the work to be performed so that the Union members of the committee can adequately form an opinion as to the reasons for such contracting out. Such notice shall generally contain the information set forth below:

1. Location of work.

2. Type of work:

a. Service

b. Maintenance

c. Major Rebuilds

d. New Construction

3. Detailed description of the work.

4. Crafts or occupations involved.

5. Estimated starting date and duration of work.

6. Anticipated utilization of bargaining unit forces during the period.

7. Effect on operations if work not completed in timely fashion.

Within ninety (90) days following the effective date of this agreement, Headquarters representatives of the parties shall develop a form notice for the submission of the information described above. Either the Union members of the committee or the Company members of the committee may convene a prompt meeting of the committee. Should the Union committee members believe a meeting to be necessary, they shall so request the Company members in writing within five (5) days (excluding Saturdays, Sundays and holidays) after receipt of such notice and such a meeting shall be held within three (3) days (excluding Saturdays, Sundays and holidays) thereafter. The Union members of the committee may include in the meeting the Union representative from the area in which the problem arises. At such meeting, the parties should review in detail the plans for the work to be performed and the reasons for contracting out such work. Upon their request, the Union members of the committee will be provided any and all relevant information in the Company's possession relating to the reasonableness factors set forth in paragraph C above. Included among the information to be made available to the committee shall be the opportunity to review copies of any relevant proposed contracts with the outside contractor. This information will be kept confidential. The Management members of the committee shall give full consideration to any comments or suggestions by the Union members for the performance of the work by bargaining unit personnel. Except in emergency situations, such discussions, if requested shall take place before any final decision is made as to whether or not such work will be contracted out.

Should the Company committee members fail to give notice as provided above, then not later than thirty (30) days from the date of the commencement of the work a grievance relating to such matter may be filed under the complaint and grievance procedure. Should it be found in the arbitration of a grievance alleging a failure of the Company to provide the notice or information required under this paragraph E that such notice or information was not provided, that the failure was not due to an emergency requirement, and that such failure deprived the Union of a reasonable opportunity to suggest and discuss practicable alternatives to contracting out, the Impartial Umpire shall have the authority to fashion a remedy, at his/her discretion, that s/he deems appropriate to the circumstances of the particular case. Such remedies if afforded, may include earnings and benefits to grievants who would have performed the work, if they can be reasonably identified.

F. Remedy for Repeated Notice Violations

Notwithstanding any other provision of this Agreement, where, at a particular mine, it is found that the Company (i) committed violations of paragraph E that demonstrate willful conduct in violation of the notice provision or constitutes a pattern of conduct of repeated violations or (ii) violated a cease and desist order previously issued by the Impartial Umpire in connection with a violation of paragraph E, the Impartial Umpire may, as circumstances warrant, fashion a suitable remedy or penalty.

G. Mutual Agreement and Disputes

The committee may resolve the matter by mutually agreeing that the work in question either shall or shall not be contracted out. Any such resolution shall be final and binding but only as to the matter under consideration and shall not affect future determinations under this Subsection.

If the matter is not resolved, or if no discussion is held, the dispute may be processed further in accordance with either of the following:

1. By filing a grievance relating to such matter under the complaint and grievance procedure described in Section XI; or

2. By submitting the matter to the Expedited Procedure set out in paragraph H below.

No agreement entered into after August 1, 1999, whether or not reached pursuant to this Section, which directly or indirectly permits the contracting out of work on an ongoing basis, shall be valid or enforceable unless it is in writing and signed by both the President and the Chairperson of the Grievance Committee of the affected local Union.

H. Expedited Procedure

In the event that either the Union or Company members of the committee request an expedited resolution of any dispute arising under this Subsection, except paragraph J (Shelf Item Procedure), it shall be submitted to the Expedited Procedure in accordance with the following:

1. In all cases except those involving day-to-day maintenance and repair work and service, the Expedited Procedure shall be implemented prior to letting a binding contract.

2. Within three (3) days (excluding Saturdays, Sundays and holidays) after either the Union or Company members of the committee determine that the committee cannot resolve the dispute, either party (chairperson of the grievance committee in the case of the Local Union and the Area Manager-Human Resources in the case of the Company) may advise the other in writing that it is invoking this expedited procedure.

3. An expedited arbitration must be scheduled within three (3) days (excluding Saturdays, Sundays and holidays) of such notice and heard at a hearing commencing within five (5) days (excluding Saturdays, Sundays and holidays) thereafter. The Impartial Umpire, or his/her appointee, shall hear the dispute and, if no Umpire is available to hear the dispute within five (5) days, another arbitrator shall be selected by mutual agreement of the Step 4 representative of the Union and the Vice President-Human Resources of the Company.

4. The arbitrator must render a decision within forty-eight (48) hours (excluding Saturdays, Sundays and holidays) of the conclusion of the hearing. Such decision shall not be cited as a precedent by either party in any future contracting out disputes.

5. Notwithstanding any other provision of this Agreement, any case heard in the Expedited Procedure before the work in dispute was performed may be reopened by the Union in accordance with this paragraph if such work, as actually performed, varied in any substantial respect from the description presented in arbitration, except where the difference involved a good faith variance as to the magnitude of the project. The request to reopen the case must be submitted within seven (7) days of the date on which the Union knew or should have known of the variance and shall contain a summary of the ways in which the work as actually performed differed from the description presented in arbitration. As soon as practicable after receipt of a request to reopen, an arbitration hearing date shall be scheduled. In a case reopened pursuant to this paragraph, the Impartial Umpire shall determine whether the work in dispute, as it actually was performed, violated the provisions of Section II, Subsection 6, and, if so, the remedy. The prior decision regarding the subject work shall be considered in the determination and given weight in the subsequent dispute, except to the extent that it relied on an erroneous description.

I. Contractors Testifying in Arbitration

No testimony offered by an outside contractor may be considered in any proceeding alleging a violation of Section II, Subsection 6, unless the party calling the contractor provides the other party with a copy of each contractor document to be offered at least forty-eight (48) hours (excluding Saturdays, Sundays and holidays) before commencement of that hearing.

J. Shelf Item Procedure

1. No later than June 1, 1994, and, except as provided herein, annually thereafter, the Company shall provide the Union members of the committee with a list and description of anticipated ongoing purchases of each item which the Company claims to be a shelf item within the meaning of paragraph B-2-a above. If the Union members of the committee so request, the list shall not include any item included on a previous list where the status of that item, as a shelf item, has been expressly resolved. Within sixty (60) days of the submission of the list, either the Union members of the committee or the Company members may convene a prompt meeting of the committee to discuss and review the list of items and, if requested, the facts underlying the Company's claim that such items are shelf items.

2. The committee may resolve the matter by mutually agreeing that the item in question either is or is not a shelf item. With respect to any item as to which the Union members of the committee agree with the Company's claim that it is a shelf item, the Company shall be relieved of any obligation to furnish a contracting out notice until the June 1 next following such agreement and thereafter, if the Union has requested that a resolved item be deleted from the shelf item list in accordance with paragraph J 1.

3. If the matter is not resolved, any dispute may be processed further by filing, within thirty (30) days of the date of the last discussion, a grievance in Step 4 of the complaint and grievance procedure described in Section XI. Except as provided in paragraph J 5 such a grievance shall include all items in dispute. However, where a number of items raise the same or similar issues, those items may be grouped in a single class or category.

4. An item which the Company claims to be a shelf item, but which was not included on the list referred to above because no purchase was anticipated, shall be listed and described on a contracting out notice provided to the Union not later than the regularly scheduled meeting of the contracting out committee next following the purchase of the item. Thereafter, the parties shall follow the procedures set forth in paragraphs J 2 and J 3 above.

5. The Union may file a grievance in accordance with paragraph G or H of this Section II, Subsection 6 with respect to any unresolved item of maintenance, repair work or work associated with the fabrication of goods, material or equipment performed outside the mine notwithstanding the inclusion of such item on the shelf item list previously furnished to the Union by the Company, provided such grievance is filed within thirty (30) days of the date on which the Union knew or should have known of the performance of the work.

K. Annual Review

Commencing on or before January 2 of each year the Company committee members shall meet with the Union committee members for the purpose of (i) reviewing all work whether inside or outside the mine which the Company anticipates may be performed by outside contractors or vendors at some time during the following twelve (12) months, (ii) determining such work which should be performed by bargaining unit employees and (iii) identifying situations where the elimination of restrictive practices would promote the performance of any such work by bargaining unit employees. The Union committee members shall be entitled in conducting this study to review any current or proposed contracts concerning items of work performed by the Company by outside contractors and vendors and shall keep such information confidential.

By no later than February 1 of each year these Local Union and Company committee members shall jointly submit a written report to the International President and the Chief Executive Officer of the Company or their designees describing the results of this review. Specifically, the report should list (a) all items of work which the parties agree will be performed by bargaining unit employees during the following twelve (12) calendar months, (b) all items of work which the parties agree should be performed by outside contractors and vendors, and (c) those items on which the parties disagree. If the parties disagree, the report will state the reason for such disagreements.

As to individual items of work, the International President and the Chief Executive Officer of the Company may (a) affirm the mine recommendation, (b) disagree with respect to the mine recommendation as to specific items and either (i) refer their dispute to arbitration under a procedure to be established by the parties and the Impartial Umpire or (ii) refer the matters back to the mine without resolution in which event the specific disputes will be handled under the provisions of this section at the time they may arise.

L. General Provisions

Where at a particular mine, it is found in a case arising subsequent to August 1, 1999, that the Company (i) engaged in conduct which constitutes willful or repeated violations of paragraph B.1 or B.2, the first of which occurred on or after August 1, 1998; or (ii) violated a cease and desist order previously issued by the IOI Board of Arbitration prior to July 31, 2004 and the Cliffs Board of Arbitration thereafter in connection with a violation of paragraph B.1 or B.2 arising on or after August 1, 1998; or (iii) in cases, the earliest of which arose on or after August 1, 1999, engaged in a pattern of conduct of repeated violations of paragraph B.1 or B.2 but where no remedy was otherwise appropriate because of practical overtime limits or the unavailability of employees to perform the improperly contracted out work, the IOI Board of Arbitration prior to July 31, 2004 and the Cliffs Board of Arbitration thereafter shall, as circumstances warrant, fashion a remedy or penalty specifically designed to deter the behavior described in (i), (ii) or (iii), above.

M. District Director/Company Employee Relations Representative

It is the intent of the parties that the members of the joint mine contracting out committee shall engage in discussions of the problem involved in this field in a good-faith effort to arrive at mutual understanding so that disputes and grievances can be avoided. If either the Company or the Union members of the committee feel that this is not being done, they may appeal to the District Director of the Union who has jurisdiction of the mine in question and the appropriate representative of the Company Headquarters for review of the complaint about the failure of the committee to properly function. Such appeal shall result in a prompt investigation by the District Director or his/her designated representative and the Company's Vice President-Human Resources for such review. This provision should in no way affect the rights of the parties in connection with the processing of any grievance relating to the subject of contracting out.

N. Training on Contracted WorkIt is the intention of the Company to provide training opportunities for qualified employees so that the use of contractors on day to day maintenance be minimized. The Company will request any contractor to give consideration to any qualified laid off Company employees when performing work on Company property. In the case of material or equipment covered by warranties or guarantees, the Company will continue to have the manufacturer or supplier furnish labor in cases where use of Company personnel would affect the terms of the guarantee or warranty.

SECTION III: RESPONSIBILITY

Subsection 1. Intent

It is the intent of the parties to bind the Union and all local and international officers and representatives of the Union, all employees as defined in Section II hereof, the Company, its officers and representatives to observe and adhere to the terms of this Agreement.

The Union emphasizes its agreement with the objective of achieving the highest level of employee performance and efficiency consistent with safety, good health, and sustained effort, and agrees that the Union, its agents and members will not take, authorize, or condone any action which interferes with the attainment of such objective.

Subsection 2. Responsibilities

The Company agrees it will not interfere with the rights of its employees to become members of the Union. There shall be no discrimination, interference, restraint, or coercion by the Company or any of its agents against any employee because of membership in the Union. The Union agrees that neither it nor any of its officers or members will engage in any Union activity on Company time, or engage other employees in any Union activity, while such employees are on Company time and will not discriminate against employees on the job because of membership or non-membership in the Union, solicit membership, collect dues, hold meetings, or carry on any Union activity either on Company time or on property of the Company in any manner which shall interfere or tend to interfere with the Company's operations, or prevent or attempt to prevent the access of employees or anyone to any of the Company's premises during the life of this Agreement. The Union, its officers, and members shall not intimidate or coerce employees into joining the Union or continuing their membership therein.

The Union, its officers, agents and members agree that for the duration of this Agreement there shall be no strikes, sitdowns, slow downs, stoppages of work or any acts of any similar nature which would interfere with production, no picketing of any kind or form, however peaceable, and that it will not otherwise permit, countenance or suffer the existence or continuance of any of these acts. The Company agrees that for the duration of this Agreement, there shall be no lockouts. Failure or refusal on the part of any employee of the Company fully to observe and obey any and all provisions of this Section shall, at the option of the Company, be sufficient grounds for discharge. Under no circumstances shall the Company or its representatives be required to discuss the grievance in question or any other matter while a work interruption, impeding or suspending of work is in effect.

It is the continuing policy of the Company and the Union that the provisions of this Agreement shall be applied to all employees without regard to race, color, religious creed, national origin, or sex. The representatives of the Union and the Company in all steps of the grievance procedure and in all dealings between the parties shall comply with this provision.

Subsection 3. Employee Orientation Program

The Employee Orientation Program will include the development and utilization of necessary color training films. The Union will be allotted up to two hours, including one film presentation. Subjects may include:

1. Distribution and discussion of the Basic Labor Agreement, the Seniority and Posting Agreement, and Local Issue Agreements.

2. Discussion of the history and achievements of the USWA International and the Local Union.

3. Discussion of the structure of the International and the Local Union and the services provided.

4. Discussion concerning the Grievance procedure and the probationary period.

5. Discussion of Safety Programs and Safe Job Procedures.

6. An opportunity for questions and answers.

The Orientation Programs of each party, the Union and the Company, will be reviewed jointly prior to implementation. The Union will be responsible for wages of Union instructors and costs in developing their portion of this Program.

In addition, and separate and apart from the above, within ten (10) days of the completion of their probationary period, the Company shall provide each employee with four (4) hours of paid time off (at their regular rate of pay) to attend an orientation session conducted by the Union at a location designated by the Union.

Subsection 4. Understanding On Plant Closings

The parties recognize the potential, far reaching impact of permanent shutdowns of facilities and the need to cooperate in attempting to lessen this impact. Accordingly, in the event of the permanent shutdown of a plant, Company and International Union representatives shall meet to determine whether appropriate Federal, State, or local government funds are available to establish an employee training, counseling, and placement assistance program for that facility. If such funds are available, the Company and Union shall work jointly to secure such funds to establish a program to provide; alternative job training for affected employees for job opportunities, counseling for affected employees on available benefit programs and job opportunities within the Company and the area; and job search counseling.

In implementing such program, the Company will cooperate with the involved local union and the state unemployment agency, other appropriate public or private employment agencies, and area employers in an effort to seek job opportunities for displaced employees. To further assist affected employees, both the Company and the Union will designate specific representatives at the time of any such permanent plant closing to answer questions by employees pertaining to their rights under the Basic Labor Agreement and various benefits programs.

SECTION IV: MANAGEMENT AND LOCAL WORKING CONDITIONS

Subsection 1. Management Rights

The management of the mines, and the direction of the working force and the operations at the mines, including the hiring, promoting and retiring (subject to the provisions of the Pension Agreement currently in effect) of employees, the suspending, discharging or otherwise disciplining of employees, the laying off and calling to work of employees in connection with any reduction or increase in the working forces, the scheduling of work and the control and regulation of the use of all equipment and other property of the Company, are the exclusive functions of the Company; provided, however, that in the exercise of such functions, the Company shall not alter any of the provisions of this Agreement and shall not discriminate against any employee or applicant for employment because of his/her membership in or lawful activity on behalf of the Union.

Subsection 2. Local Working Conditions

The term " local working conditions" as used in this Subsection means specific practices or customs which reflect detailed application of the subject matter within the scope of wages, hours of work, or other conditions of employment and includes local agreements, written or oral, on such matters. It is recognized that it is impracticable to set forth in this Agreement all of these working conditions, which are of a local nature only, or to state specifically in this Agreement which of these matters should be changed or eliminated. The provisions set forth below provide general principles and procedures which explain the status of these matters and furnish necessary guideposts for the parties hereto and the impartial arbitrator. The provisions of this Subsection are not intended to prevent the Management from continuing to make progress. Any arbitrations arising hereunder shall be handled on a case-by-case basis on principles of reasonableness and equity.

A. It is recognized that an employee does not have the right to have a local working condition established, in any given situation or mine where such condition has not existed, during the term of this Agreement, or to have an existing local working condition changed or eliminated, except to the extent necessary to require the application of a specific provision of this Agreement.

B. In no case shall local working conditions be effective to deprive any employee of rights under this Agreement. Should any employee believe that a local working condition is depriving them of the benefits of this Agreement, s/he shall have recourse to the grievance procedure and arbitration, if necessary, to require that the local working condition be changed or eliminated to provide the benefits established by this Agreement.

C. Should there be any local working conditions in effect which provide benefits that are in excess of, or in addition to, the benefits established by this Agreement, they shall remain in effect for the term of this Agreement, except as they are changed or eliminated by mutual agreement or in accordance with Paragraph D below.

D. The Management shall have the right to change or eliminate any local working condition if, as the result of action taken by Management under Subsection 1 hereof, the basis for the existence of the local working condition is changed or eliminated, thereby making it unnecessary to continue such local working condition; provided, however, that when such a change or elimination is made by the Management, any affected employee shall have recourse to the grievance procedure and arbitration, if necessary, to have the Management justify its action.

E. No local working condition shall hereafter be established or agreed to which changes or modifies any of the provisions of this Agreement, except as it is approved in writing by an International Representative of the Union and Labor Relations Executive of the Company.

F. Any local working condition that conflicts with the terms of the �Operations and Maintenance Productivity Improvement Agreement" Appendix C will be changed or modified to the extent necessary to implement the Agreement.

The settlement of a grievance prior to arbitration under the local working conditions provisions of the Agreement shall not constitute a precedent in the settlement of grievances in other situations in this area.

Each party shall as a matter of policy encourage the prompt settlement of problems in this area by mutual agreement at the local level.

SECTION V: UNION MEMBERSHIP

Subsection 1. Maintenance of Membership

Each employee who on the effective date of this Agreement is a member of the Union in good standing and each employee who becomes a member after that date shall, as a condition of employment, maintain his/her membership in the Union. Each employee hired on or after July 1, 1962, shall as a condition of employment, beginning on the 30th day following the beginning of such employment or the effective date of this Agreement, whichever is the later, acquire and maintain membership in the Union. For the purposes of this Section, an employee shall not be deemed to have lost his/her membership in the Union in good standing until the International Treasurer of the Union shall have determined that the membership of such employee in the Union is not in good standing and shall have given the Company a notice in writing of that fact.

In states in which the foregoing provisions may not lawfully be enforced, the following provisions to the extent that they are lawful, shall apply. Each employee who would be required to acquire or maintain membership in the Union if the foregoing Union security provisions could lawfully be enforced, and who fails voluntarily to acquire or maintain membership in the Union, shall be required as a condition of employment, beginning on the 30th day following the beginning of such employment or the date of this Agreement, whichever is later, to pay to the Union each month a service charge as a contribution toward the administration of this Agreement and the representation of such employees. The service charge for the first month shall be in an amount equal to the Union's regular and usual initiation fee and monthly dues, and for each month thereafter in an amount equal to the regular and usual monthly dues.

The parties shall make such arrangements as may be necessary to adapt the foregoing check-off provisions to the check-off of the service charge referred to above pursuant to voluntary authorizations therefore.

Subsection 2. New Employees

At the time of his/her employment the Company will suggest that each new employee voluntarily execute an authorization for the check-off of Union dues in the form agreed upon. A copy of such authorization card for the check-off of Union dues shall be forwarded to the Financial Secretary of the Local Union along with the membership application of such employee.

An employee who is transferred from a position within the bargaining units herein set forth to a position excluded from such units and who subsequent to the date of this Agreement is returned to a position within such units shall be reinstated to Union membership if s/he was a member of the Union at the time of his/her transfer out of the bargaining units. At the time of his/her return to the bargaining units, the Company will suggest that such employee voluntarily execute an authorization for the check-off of Union dues.

Subsection 3. Check-Off Of Dues

Upon receipt by the Management's representative at any mine of the voluntary written authorization by an employee at such mine, the Company will deduct from each pay of such employee thereafter during the existence of such authorization his/her periodic Union dues as designated by the International Treasurer of the Union, and the Company shall also deduct any assessments against them which shall be general and uniform among employees who shall at the time be members of the Union, and, if owing by them, an initiation fee, all as payable to the Union in accordance with its constitution and by-laws. Dues will be deducted on a per pay-period basis and remitted monthly for the pay-periods closed in the month for which dues are being deducted. The Company shall promptly remit any and all amounts so deducted to the International Treasurer of the Union, at the address which s/he authorizes for this purpose, who shall notify the Company in writing of the respective amounts of the dues, initiation fees and assessments which shall be so deducted.

The Company will implement the dues check-off provisions of its collective bargaining agreement in accordance with the following uniform formulations:

A. The monthly membership dues for each employee who has provided a voluntary check-off authorization and shall be an amount equal to 1.3% of said employee's total earnings during the month provided that monthly dues shall not be less than $5.00 and provided further that monthly dues shall not be more than 2.5 times the employee's average hourly earnings. For lump sum payments, dues shall be calculated separately by applying the 1.3 % to such payments. The International Executive Board shall issue appropriate interpretive rulings. Verifications of such exception shall be made in writing by the Treasurer of the International Union to the Companies operating at locations where such exception exists.

B. Dues are calculated by multiplying "adjusted total earnings" by 1.3% and comparing the result with the product of "average hourly earnings" times 2.5 (or other appropriate multiplier, if the earnings period is other than a one month period.)

"Average hourly earnings" are "adjusted total earnings" divided by the hours with which they are associated. The adjusted total earnings figure which should be used consists of the same components which are used in the calculation of the current dues but with the addition of holiday pay both worked and unworked. The "hours" figure used will thus be the hours in the current dues calculation plus the appropriate number of hours associated with the inclusion of holiday pay.

The dues for the period will be the lesser of 1.3% times adjusted total earnings or average hourly earnings times the multiplier.

The determination of "earnings" and "hours" shall be in accordance with the Guidelines adopted by the Company and the Union in this Agreement and in any other Agreement that the parties may hereafter adopt.

C. In cases of earnings insufficient in any such calculation pay period to cover deduction of dues, the dues shall be calculated on the basis of and deducted from earnings in the next pay period in which there are sufficient earnings, subject to present provisions and practices as to accumulation of dues.

D. At those locations where, due to procedures or mechanical accounting equipment, the Company will be unable to comply with the procedures contained herein, the International Treasurer of the International Union, or his/her designee, and the Company shall promptly arrange for alternative means of complying with the intent of the procedures contained herein.

E. This understanding shall not be deemed to alter the meaning of "average hourly earnings" as that term may be used for purposes other than dues calculation.

Subsection 4. Certified Lists

On or before the 25th day of each month, the Union shall submit to the Company a certified list showing separately for each mine the name, address and check number of each employee who shall have become a member in good standing of the Union (other than through the procedures is provided in Subsection 2 hereof) since the last previous list of members of the Union in good standing was furnished to the Company, and showing the amount of any initiation fee to be deducted from the wages of such employee in the succeeding month. Deductions on the basis of authorization cards submitted to the Company shall commence with respect to dues for the month in which the Company receives such authorization card or in which such card becomes effective, whichever is later.

Subsection 5. Exoneration

No deduction shall be made unless the employee was entitled to pay for at least five (5) days in such month for which the dues are paid. If such employee does not have earnings during the pay period for which the dues are payable such deduction shall be made from the next pay period in which s/he has sufficient earnings; provided, however that the accumulation of dues shall be limited to two (2) months. The International Treasurer of the Union shall be provided with a list of those employees for whom double deduction has been made. In cases of earnings less than five (5) days in any month no dues shall be owing for that month.

Subsection 6. Non-Transmission of Dues

The Union will be notified of the reason for non-transmission of dues in case of inter-mine transfer, lay-off, discharge, resignation, leave of absence, sick leave, retirement, death, insufficient earnings. In the event an employee transfers from a mine owned and/or operated by said Company for which the Union has been certified as the collective bargaining agent to a mine owned and/or operated by said Company where the Union has not been certified as the bargaining agent, the Company will honor the current check-off authorization card of the employee (in the event the employee has executed such an authorization) for the purposes of checking off dues only. Dues so deducted will be credited to the Local Union in which s/he holds membership.

Subsection 7. Indemnification

The Union shall indemnify the Company and hold it harmless against any and all suits, claims, demands and liabilities that shall arise out of or by reason of any action that shall be taken by the Company for the purpose of complying with the foregoing provisions of this Section, or in reliance on any list, notice or assignment which shall have been furnished to the Company under any of such provisions.

Subsection 8. Federal and State Laws

The provisions of this Section shall be effective in accordance and consistent with applicable provisions of federal and state law.

SECTION VI: RATES OF PAY

Subsection 1. Standard Hourly Wage Scales

The Standard Hourly Wage Scales of rates for the respective job classes are those set forth below:

Wage Table (Includes Rolled-In Incentives)
Job Class	8/1/2004 SHWR	9/30/2005 SHWR	3/31/2007 SHWR
1-2	18.173	18.718	19.280
3	18.449	19.003	19.573
4	18.725	19.287	19.866
5	19.001	19.571	20.158
6	19.277	19.856	20.451
7	19.553	20.140	20.744
8	19.829	20.424	21.037
9	20.105	20.708	21.330
10	20.381	20.993	21.622
11	20.657	21.277	21.915
12	20.933	21.561	22.208
13	21.209	21.846	22.501
14	21.485	22.130	22.794
15	21.761	22.414	23.086
16	22.037	22.698	23.379
17	22.313	22.983	23.672
18	22.589	23.267	23.965
19	22.865	23.551	24.258
20	23.141	23.835	24.551
21	23.417	24.120	24.843
22	23.693	24.404	25.136
23	23.969	24.688	25.429
24	24.245	24.973	25.722
25	24.521	25.257	26.015

Subsection 2. Application of the Standard Hourly Wage Scales

A. The Standard Hourly Wage Scale Rate of each job class shall be the Standard Hourly Wage Rate for all jobs classified within such job class, and shall be applied in accordance with the applicable provisions of the Job Evaluation Manual. Such manual is hereinafter referred to as the "Job Evaluation Manual," and shall be a supplement to and part of this Agreement.

B. Each Standard Hourly Wage Rate established under the foregoing Subsection 2.A is recognized as the rate of a fair day's pay on the job and is the established rate of pay for all hours of work or allowed time on a job.

C. The established rate of pay for each production and maintenance job (other than trade and craft and apprentice jobs, if any, as defined in said Job Evaluation Manual or learner jobs) shall apply to any employee during such time as the employee is required to perform such job and is assigned to the respective rate classification in accordance with the applicable provisions of said Job Evaluation Manual.

D. The established starting rate, intermediate rate, or standard rate of pay for the trade or craft job shall apply to each employee during such time as the employee is assigned to the respective rate classification in accordance with the applicable provisions of said Job Evaluation Manual.

E. Learner rates of pay for learner periods which may be hereafter agreed to shall apply to an employee in accordance with procedures to be negotiated.

F. Rates for heavy mobile equipment engaged in direct mining and stripping operations shall be as provided for in Appendix A.

G. Training periods for trade or craft "on-the-job training" and training periods for trade or craft "on-the-job apprenticeship" to be administered in accordance with the provisions of the Job Evaluation Manual are as follows:

On-The-Job-Training Program Rate Schedule Training Periods of 1040 Hours
Trade or Craft Job Classes	1^st	2^nd	3^rd	4^th	5^th	6^th	7^th	8^th	9^th
Automotive Mechanic	7	8	9	10	11	12	13
Carpenter	7	8	9	9	10	11	12
Electrician-Field	8	9	10	11	11	12	13	14	15
Electrician-Shop	7	8	9	10	10	11	12	13
Machinist	8	9	10	11	11	12	13	14	15
Maintenance Mechanic	7	8	9	10	10	11	12	13
Painter	7	8	8	9	10
Plant Repairperson	7	8	9	10	10	11	12	13
Plumber	7	8	9	9	10	11	12
Sheet Metal Worker	8	9	10	11	11	12	13	14
Welder	8	9	10	10	11	12	13
Apprentice Rate Schedule
Trade or Craft Job Classes	1^st	2^nd	3^rd	4^th	5^th	6^th	7^th	8^th	9^th
Automotive Mechanic	7	8	9	10	11	12	13
Carpenter	7	8	9	10	11	12
Electrician-Field	8	9	10	11	12	13	14	15
Electrician-Shop	7	8	9	10	11	12	13
Electronic Repairperson	9	10	11	12	13	14	15	16
Machinist	8	9	10	11	12	13	14	15
Maintenance Mechanic	7	8	9	10	11	12	13
Painter	7	8	9	10
Plant Repairperson	7	8	9	10	11	12	13
Plumber	7	8	9	10	11	12
Sheet Metal Worker	8	9	10	11	12	13	14
Welder	8	9	10	11	12	13

Subsection 3. Description and Classification of New or Changed Jobs

In the interest of the effective administration of the Job Description and Classification procedures as set forth in the Manual, a Mine Union Committee on Job Classification (hereinafter called the Mine Union Committee) consisting of three (3) employees designated by the Union shall be established in each mine.

The job description and classification for each job in effect as of the date of this Agreement shall continue in effect unless (1) Management changes the job content (requirements of the job as to training, skill, responsibility, effort, and working conditions) to the extent of one full job class or more; (2) the job is terminated or not occupied during a period of one year; or (3) the description and classification are changed in accordance with mutual agreement of officially designated representatives of the Company and the Union.

When and if from time to time the Company, at its discretion, establishes a new job or changes the job content (requirements of the job as to training, skill, responsibility, effort, and working conditions) of an existing job to the extent of one full job class or more, a new job description and classification for the new or change job shall be established in accordance with the following procedure:

A. Management will develop a description and classification of the job in accordance with the provisions of the Manual.

B. The proposed description and classification will be submitted to the Mine Union Committee for approval, and the Standard Hourly Wage Scale Rate for the job class to which the job is thus assigned shall apply in accordance with the provisions of Subsection 2 of this Section. Copies of the proposed description and classification shall be sent to a designated representative of the International Union. If the job involved new-type facilities or a new-type job, special designation of this fact shall be made.

C. The Mine Union Committee and Management shall discuss and determine the accuracy of the job description.

D. If Management and the Mine Union Committee are unable to agree upon the description and classification, Management shall install the proposed classification, and the Standard Hourly Wage Scale Rate for the job class to which the job is thus assigned shall apply in accordance with provisions of Subsection 2 of this Section. The Mine Union Committee shall be exclusively responsible for the filing of grievances and may at any time within thirty (30) days from the date of installation file a grievance with the management representative designated by the Company alleging that the job is improperly described and/or classified under the provisions of the Manual. Thereupon the Mine Union Committee and Management shall prepare and mutually sign a stipulation setting forth the factors and factor codings which are in dispute. Thereafter such grievance shall be referred by the respective parties to their Fourth Step Representatives for further consideration. In the event the Fourth Step Representatives are unable to agree on the description and classification within thirty (30) days, they shall prepare and mutually sign a stipulation, (which may amend the stipulation set forth by the Mine Union Committee and Management) setting forth the factors and factor codings which are in dispute, copy of which shall be sent to a designated representative of Management and the aforementioned representative of the International Union.

E. Upon request of either party's Fourth Step Representative the matter may be referred to the aforementioned designated representative of the International Union or a designated representative of Management respectively who may request that the proposed description and classification be submitted to them for their review and resolution. In the event either of said representatives request such review, they shall meet for this purpose and shall, within sixty (60) days, advise the Fourth Step Representatives of their agreement or failure to reach agreement.

F. If said representatives fail to reach agreement within the 60-day period, the Union's Fourth Step Representative may, within fifteen (15) days thereafter request that the issues in dispute be submitted to arbitration. If submitted to arbitration, the issue shall be limited to the factors stipulated at that time by the respective Fourth Step Representatives as being in dispute and the decision shall be effective as of the date when the new job was established or the change or changes installed.

G. In the event the parties fail to agree as provided, and no request for review or arbitration is made within the time provided, the classification as prepared by the Company shall be deemed to be approved.

H. In the event Management does not develop a new job description and classification, the Mine Union Committee may, if filed promptly, process a grievance under the grievance and arbitration procedures of this Agreement requesting that a job description and classification be developed and installed in accordance with the provisions of the manual. The resulting classification shall be effective as of the date when the new job was established or the change or changes installed.

When and if from time to time the Company, at its discretion, changes the job content (requirements of the job as to training, skill, responsibility, effort, and working conditions) of an existing job to an extent less than one full job class, a Form G will be prepared setting forth the change in job content and the effect, if any, on the classification of the job.

Subsection 4. Pay Periods

A. All employees will have their earnings computed for each workweek (as defined in Section VII. Subsection 3).

B. All payroll checks will be mailed on the second Tuesday following the close of the pay period unless intervening holidays or similar circumstances interfere.

C. The Company shall show the hours worked at each rate of pay separately as well as overtime on payroll stubs or due bills.

Subsection 5. Wage Rate Inequity Grievances

After the Standard Hourly Wage Rate Scale becomes effective as provided in accordance with the terms of this Agreement no basis shall exist for an employee to allege that a wage rate inequity exists and no grievance on behalf of an employee alleging a wage rate inequity shall be filed or proposed during the term of this Agreement.

Subsection 6. Correction of Errors

Notwithstanding any provisions of this Agreement, errors in application of rates of pay shall be corrected.

Subsection 7. Transfers During Shift

Any employee transferred during a shift to an occupation having a lower rate of pay shall be paid for all hours worked in that shift at the rate at which s/he commenced work; any employee transferred during a shift to an occupation having a higher rate of pay shall receive such rate of pay for the time worked at such occupation.

Subsection 8. shift differentials

For all hours worked on the afternoon shift a premium rate of thirty (30) cents per hour will be paid. For all hours worked on the night shift a premium rate of forty-five (45) cents per hour will be paid.

For the purposes of applying the aforesaid shift differentials, all hours worked by an employee during the workday shall be considered as worked on the shift on which s/he is regularly scheduled to and does start work, except:

A. An employee regularly scheduled for the day shift or afternoon shift who completes his/her regular eight (8) hour shift and continues to work into the afternoon or night shift in excess of four (4) hours, shall be paid the applicable shift differential only for all hours worked in excess of four (4) on the afternoon or night shift.

B. An employee regularly scheduled for the day or afternoon shift who completes his/her regular eight-hour shift and after leaving the Company's premises is called out for the succeeding afternoon or night shift, shall be paid the applicable shift differential for the hours worked on the afternoon or night shift.

C. An employee who after working eight (8) hours on the night shift, continues to work into the day shift, shall be paid the night shift differential for all hours worked on such day shift.

Shift differentials shall be included in the calculation of overtime compensation. Shift differential shall be computed by multiplying the hours worked by the applicable differential and the amount so determined added to earnings.

The shift differential shall be paid for allowed time or reporting time when the hours for which payment is made would have called for the shift differential if worked.

Subsection 9. Shift Starting Times

1. Shifts shall be identified in accordance with the following:

A. Day shift includes all shifts regularly scheduled to commence between 6:00 A.M. and 9:00 A.M., inclusive.

B. Afternoon shift includes all shifts regularly scheduled to commence between 2:00 P.M. and 5:00 P.M., inclusive.

C. Night shift includes all shifts regularly scheduled to commence between 10:00 P.M. and 1:00 A.M., inclusive.

2. An employee who starts to work on a shift which commences at a time not specified in this Subsection 9, Paragraph 1 above, shall be paid as follows:

A. For hours worked which would fall in the prevailing day shift no shift differential shall be paid.

B. For hours worked which would fall in the prevailing afternoon shift the afternoon shift differential shall be paid.

C. For hours worked which would fall in the prevailing night shift the night shift differential shall be paid.

Subsection 10. Sunday Premiums

A. All hours worked by an employee on Sunday, which are not paid for on an overtime basis, shall be paid at one and one-half times the regular rate of pay.

B. For the purpose of this provision, Sunday shall be deemed to be the 24 hours beginning with the shift-changing hour nearest to 12:01 A.M. Sunday.

C. Sunday premium based on the Standard Hourly Wage Rate shall be paid for reporting allowance hours.

D. Regular rate of pay, as the term is used in Paragraph A of this Subsection, shall mean the hourly rate which the employee would have received for the work had it been performed during non-overtime hours.

Subsection 11. Inflation Recognition Payment

1. General Description

The below general description is qualified in its entirety by Paragraphs 2 through 6 below.

The purpose of the Inflation Recognition Payment (IRP) is to make quarterly lump-sum payments to Employees if cumulative inflation, as measured over the life of the Basic Labor Agreement, exceeds three percent (3%) per year.

At the end of each calendar quarter, the Consumer Price Index (CPI) for the final month of that quarter will be compared to a CPI Threshold (as found in the Table in Paragraph 5 below) which represents what the CPI would be if total inflation since the beginning of the Agreement had averaged three percent (3%) per year. If the actual CPI is higher than the CPI Threshold, a lump sum payment shall be made equal to each full one percent (1.0%) by which the actual CPI is higher than the CPI Threshold, multiplied by the Standard Hourly Wage Rate for each position worked by an Employee for all hours actually worked and overtime allowance (hereafter referred to as �earnings�) for the quarter.

Thus, if in a given quarter three percent (3%) annual inflation since the beginning of the Agreement would have produced total inflation of ten percent (10%) and the actual CPI indicates that inflation since the beginning of the contract has been twelve percent (12%) and an Employee had earnings as defined in the paragraph above during the quarter of $12,000, then that Employee would receive a lump-sum payment of two percent (2%) (12% actual inflation minus a 10% CPI Threshold) times $12,000 or $240.

2. IRP Payments

Beginning the first full calendar quarter after July 1, 2004, the Company shall, on each Payment Date, make to each Employee an IRP payment equal to:

1. their total earnings as defined above for the Covered Period, multiplied by each full percentage (1.0%), by which the CPI for the Measurement Month exceeds the CPI Threshold for the Measurement Month.

b) No IRP will be made for any Covered Period unless the CPI for the Measurement Month is greater than the CPI Threshold; in the event the CPI is lower than the CPI Threshold there shall be no recoupment of any kind.

The IRP shall be a lump-sum payment and shall not be part of the Employee�s Standard Hourly Wage Rate or used in the calculation of any other Pay, allowance or benefit.

3. Definitions

a) CPI shall mean the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), U.S. City Average, All Items, Not Seasonally Adjusted (1982-84=100) as published by the Bureau of Labor Statistics. If the Consumer Price Index in its present form and on the same basis as the last Index published prior to January 1, 2004 becomes unavailable, this Subsection shall be adjusted to produce as nearly as possible the same result as would have been achieved using the Index in its present form.

b) Payment Date shall be the forty-fifth (45th)day after the last day of the Measurement Month.

c) Measurement Month shall be the last month of a Covered Period.

d) Covered Period(s) shall be as shown in Paragraph 5 below.

e) CPI Threshold(s) shall be as shown in Paragraph 5 below, based on the formula in Paragraph 6 below.

4. Example:

Covered Period	10-01-05 thru 12-31-05
Measurement Month	December 2005
Hypothetical CPI in Measurement Month		202.3
CPI Threshold for the Covered Period		196.6

The amount, of full percentage point(s), by which the CPI for the Measurement Month exceeds the CPI Threshold for the Covered Period
((202.3 - 196.6) / 196.6) = 2.0%

Earnings in Covered Period		$12,000
IRP Payment	($12,000 x 2.0%)	=$240.00

5. Covered Periods and CPI Thresholds

Covered Period	CPI Threshold
07-01-02 � 09-30-02	None
10-01-02 � 12-31-02	179.9
01-01-03 � 03-31-03	179.9
04-01-03 � 06-30-03	185.3
07-01-03 � 09-30-03	185.3
10-01-03 � 12-31-03	185.3
01-01-04 � 03-31-04	185.3
04-01-04 � 06-30-04	190.9
07-01-04 � 09-30-04	190.9
10-01-04 � 12-31-04	190.9
01-01-05 � 03-31-05	190.9
04-01-05 � 06-30-05	196.6
07-01-05 � 09-30-05	196.6
10-01-05 � 12-31-05	196.6
01-01-06 � 03-31-06	196.6
04-01-06 � 06-30-06	202.5
07-01-06 � 09-30-06	202.5
10-01-06 � 12-31-06	202.5
01-01-07 � 03-31-07	202.5
04-01-07 � 06-30-07	208.6
07-01-07 � 09-30-07	208.6
10-01-07 � 12-31-07	208.6
01-01-08 � 03-31-08	208.6
04-01-08 � 06-30-08	214.9

6. Formula to Calculate CPI Threshold

The CPI Threshold shown in the Table above is the CPI for the month of March 2002 multiplied by 1.03 per year as expressed in the following formula:

CPI-W for 3-02 x (1.03)ⁿ

Where ⁿis the number of Covered Years from the first calendar year of 2002 to the Covered Year in which the calculation is made.

Subsection 12. 401(k) Plan

1. Description of the Plan

The 401(k) Plan is designed to provide eligible employees with an opportunity to increase the value of their earnings and to provide increased retirement benefits through tax-advantaged savings.

Monies directed into the Plan on a pre-tax basis will not be taxed for Federal Income Tax purposes or (most) State Tax purposes. You can now contribute to the Plan on an after-tax basis. Interest and/or dividend earnings are not taxed until distribution.

2. Eligibility

All active employees who have attained age 21 and have completed the 720 hour probationary period with the Company shall be eligible to participate in the Plan.

3. Plan Administration

a) General

The Plan shall be administered by the Company and the Company shall bear payroll administrative costs associated with the Plan. The per participant, trustee, recordkeeping, transaction and other administrative fees will be borne by the Plan.

The Plan recordkeeper, trustee and investment vehicles will be determined following a joint analysis by the Company and the Union. However, final selection of the recordkeeper, trustee and investment vehicles shall be made by the Union from among options acceptable to the Company, to assure that third party administrative requirements and Company systems are compatible.

Effective July 17, 1992, the Company and the Union agreed that the Plan�s recordkeeper is to be Fidelity Institutional Retirement Services Company and the Plan�s trustee is to be Fidelity Management Trust Company.

The Company will conduct periodic anti-discrimination tests as required by law. In the event that discrimination relative to contributions of the higher-paid employees is discovered, the higher paid employees may be directed to lower their contribution.

b) Vesting

All contributions are immediately vested.

c) Withdrawals

Withdrawals from the Plan are available in the event of retirement, death, disability, termination, at age 59-1/2 or in the event of hardship, as set forth by the Internal Revenue Service.

d) Additional Plan Requirements

Internal Revenue Service approval must be obtained.

e) The Company has arranged for participants to access their accounts through the Internet, utilizing a system of PIN numbers and passwords.

4. Investment Options

Participants shall have several investment options into which they may direct their funds. These funds include a range of investment objectives and risk.

Effective July 17, 1992, the Company and the Union agreed that the following investment options are to be offered to participants:

(a) Fidelity Retirement Money Market Portfolio

(b) Managed Income Portfolio

(d) Fund Fidelity Balanced Fund

(e) Fidelity U.S. Equity Index Portfolio

(f) Fidelity Magellan Fund

Effective August 1, 2004, the Company and the Union agreed to add the following investment options to participants:

(a) Fidelity Equity-Income Fund

(b) Fidelity Contra-fund

(d) Fidelity Overseas Fund

(e) Fidelity Small Cap Stock

(f) Fidelity Freedom Income

(g) Fidelity Freedom 2000

(h) Fidelity Freedom 2010

(i) Fidelity Freedom 2020

(j) Fidelity Freedom 2030

(k) Fidelity Freedom 2040

(l) Fidelity Inflation Protected Bond

5. Plan Funding and Investment Transfer Options

a) Participants may defer from one percent (1%) to thirty-five percent (35%) (Subject to Internal Revenue Code Regulations) of their earnings. Participants shall have the option to direct any portion of any bonus/profit sharing or other similar payment(s) be allocated to their accounts. Contributions to the Plan shall not exceed the maximum permissible by law.

b) Employees, who are 50 years and older within the current calendar year, may elect to have a Catch-up Contribution up to the maximum permissible by law.

c) Employees eligible to participate in the Plan may elect participation in the Plan on a bi-weekly basis. Such election must be made in writing, on a form provided by the Company, at least two weeks prior to the pay date when it is to be effective.

d) Employees participating in the Plan may elect to suspend contributions at any time; however, such suspension must remain in effect for at least a six month period. Such suspension must be made in writing, on a form provided by the Company, at least two weeks prior to the pay date when it is to be effective.

e) Participating employees may increase or decrease their contributions to the plan on a bi-weekly basis. Such increase or decrease in contributions must be made in writing, on a form provided by the Company, at least two weeks prior to the pay date when it is to be effective.

f) Participating employees may change investment options for existing balances and future contributions on a daily basis by calling Fidelity. The amounts transferred may be in percents or dollars.

Participants may make exchanges between the Managed Income Portfolio and non-competing investment options. Non-competing investment options are the Balanced Fund, the U.S. Equity Index Portfolio and the Magellan Fund. Monies exchanged between the Managed Income Portfolio and competing options must first be placed in a non-competing fund for 180 days. Competing Options are the Retirement Money Market Portfolio and the Investment Grade Bond Fund.

6. Loan Provision

The 401(k) Plan will have the following loan provisions:

a) The minimum amount that can be borrowed is $1,000, provided the participant�s account balance is at least $2,000.

b) The maximum amount that can be borrowed is 50% of the participant�s account balance or $50,000, whichever is less.

c) Loan amounts must be in multiples of $100.

d) Only two loans may be outstanding at one time.

e) The interest rate charged for a loan is established at the prime bank lending rate in effect at the time of the loan application. The rate will remain the same throughout the term of the loan.

f) Interest payable on the loan is not tax deductible. Because it is considered earnings in a participant�s account, the interest will eventually be taxable when it is received either through a withdrawal or distribution from the plan.

g) There are two types of loans:

i. General Purpose Loan

For any purpose other than purchase of a participant�s principle residence. Term of this type of loan is limited to five years.

ii. Real Estate Purchase Loan

Can be used to finance the purchase of a participant�s principle residence. Term of this type of loan is limited to ten years.

h) Repayment of a loan occurs through automatic payroll deductions. Payments must be made in equal installments over the term of the loan; however, pre-payment of the remaining balance can be done at any time without penalty.

i) During an involuntary interruption of employment such as layoff, disability or strike, payments must continue for a period up to 12 months. If the participant has not returned to work in 12 months, the loan becomes due and payable.

j) The loan will be in default and will become due and payable in full in the event of the following:

� Payments are not made in a timely manner.

� Termination of employment.

� Retirement.

� Death.

� Breach of any loan security provisions.

If the loan is not repaid when due, the loan balance will be processed as a taxable withdrawal with the appropriate income taxes and penalties.

k) The trustee of the plan may charge fees for originating and maintaining loans. At the current time, those fees are:

� $10.00 for origination fee charged to the participant�s account balance at the time of the loan.

� $15.00 annual maintenance fee charged to the participant�s balance quarterly.

The participant is responsible for all loan fees which may change from time to time.

Subsection 13. Earnings Protection Plan

1. Purpose

The purpose of the Earnings Protection Plan (EPP) is to protect a level of earnings for hours worked by employees with particular emphasis on employees displaced in technological change, through provision of a benefit to be known as a Quarterly Income Benefit (QIB) which, when added to an employee's average earnings for hours worked in a quarter, will increase such average earnings for hours worked during a base period preceding such quarter.

2. Definitions

When used in the EPP or in any agreement relating thereto, the following terms are intended to have the meaning set forth below:

"Average earnings" Average straight-time hourly rate of earnings, determined by dividing total earnings (excluding shift differentials and Sunday and overtime premiums) for all hours worked by the number of hours worked.

"Base period" The pay periods paid in the calendar year preceding the benefit quarter, provided, however, that with respect to any employee who has twenty or more years of continuous service at the start of the first benefit quarter in any calendar year, the base period shall be the pay periods paid in the second calendar year next preceding the benefit quarter if his/her base period rate for such calendar year is higher than his/her base period rate for the calendar year immediately preceding the benefit quarter.

"Base period rate" The average earnings for the base period, plus the amount per straight-time hours worked of any QIB paid for straight-time hours worked in the base period.

"Benefit quarter" The pay periods paid in a calendar quarter with respect to which benefit determinations are to be made.

"Benefit quarter rate" The average earnings for the benefit quarter.

"Continuous Service" Continuous Service as determined under the Company's non-contributory pension provisions.

"Eligible employees" Employees who have two or more years of continuous service as of the end of the benefit quarter and who have worked 160 or more hours during the base period.

3. Quarterly Income Benefits

a. Each eligible employee shall receive a QIB subject to all the provisions of the EPP, for any benefit quarter for which his/her benefit quarter rate does not equal or exceed 85% of his/her base period rate; provided, however, that any employee who has 20 or more years of continuous service at the start of the first benefit quarter in any calendar year shall receive a QIB, subject to all the provisions of the EPP, for any benefit quarter for which his/her benefit quarter rate does not equal or exceed 90% of his/her base period rate.

b. Subject to the provisions of "c" and "d" below, the amount of the QIB for an employee shall be determined with reference to the hours worked by them in the benefit quarter by multiplying (i) the sum of the number of such hours paid for at straight time plus 1.5 times the number of such hours paid for at overtime rates by (ii) the amount, if any, by which his/her benefit quarter rate was less than 85% of his/her base period rate; provided, however, that with respect to any employee who has twenty or more years of continuous service at the start of the first benefit quarter in any calendar year, the amount of the QIB shall be determined with reference to the hours worked by them in the benefit quarter by multiplying (i) the sum of the number of such hours paid for at straight time plus 1.5 times the number of such hours paid for at overtime rates by (ii) the amount, if any, by which his/her benefit quarter rate was less than 90% of his/her base period rate.

c. In determining the amount of a QIB, the base period rate and the benefit quarter rate shall be appropriately adjusted to neutralize the effect of any general wage change occurring after the start of the base period.

d. Any QIB otherwise payable shall be adjusted to the extent necessary to avoid a payment under this plan which would duplicate a payment under a workmen's compensation or occupational disease law or under any other arrangement which provides an earnings supplement.

4. Disqualification

a. An employee shall not be paid any QIB for any benefit quarter if it is determined that his/her benefit quarter rate was significantly lower than it otherwise would have been because of any of the following (occurring in or before such benefit quarter):

(1) Assignment of his/her own request or due to his/her own fault to a job with lower earning opportunities or failure to accept assignment, or to assert assignment rights, to a job with higher earning opportunities except in the case of assignments related to the manning of a new facility or other situations where it is clear from the surrounding circumstances that such event should not affect eligibility for a QIB.

(2) Any occurrence which would disqualify the employee from a Weekly Benefit pursuant to Paragraph 3.5c.(1), (2) and (3) of the SUB Plan.

b. If any employee quits or is discharged, no QIB shall be payable for the benefit quarter in which such quit or discharge occurs.

5. General

a. Any QIB payable in accordance with the terms of this Plan shall be paid promptly after the end of the benefit quarter for which it is payable, shall be considered wages for the purposes of the applicable law, and shall be included in calculating earnings for the purposes of the Company's non-contributory Pension provisions and vacations, but not for the SUB Plan or any other purpose. For the purposes above provided, the QIB shall constitute wages for the calendar quarter in which it is paid.

b. The Union shall be furnished, on forms and at times to be agreed upon, such information as may be reasonably required to enable the Union to be properly informed concerning the operation of the EPP. In addition, with respect to any benefit quarter, the Chairperson of the Grievance Committee, if s/he so requests, shall be furnished with a list of employees represented by such Committee who received QIB's and the amount of such QIB's and a list of employees represented by such Committee who did not receive QIB's because of one of the disqualifications listed in 4-a-(1), (2) or (3).

c. Any employee whose benefit quarter rate for a benefit quarter is less than 85% of his/her base period and who does not receive a QIB for that benefit quarter because of one of the disqualifications listed in 4a(1), (2) or (3) shall be notified of the reason for his/her disqualification in writing with a copy to his/her Grievance Committee Chairperson.

Subsection 14. Special Rates of Pay

A. High Work Premium

The Company and the Union agree that at all surface operations the Company will pay a special allowance to an employee when working on basic steel construction or dismantling, welding or plant maintenance work, under the following conditions:

1. The work is performed more than 25 feet above ground level or solid working surface, and

2. The work involves climbing to connect, plumb, weld or bolt basic structural steel; climbing to weld or perform mechanical or electrical maintenance work.

Such allowance will be one hour allowed time paid only for shifts when such work is actually performed; provided, however, if the employee works less than four hours on this type of work the allowance shall be one-half hour.

It is agreed that the intent of this allowance is to compensate employees for work which is performed under conditions not found in the usual maintenance, remodeling or equipment installation normally performed by maintenance personnel. It is understood that the following examples of work to which this special allowance is not applicable are not intended to be all inclusive, but are to serve only as a guide in administration of the allowance:

1. Decking erected steel.

2. Routine inspections.

3. Pole Line electrical installation or maintenance.

4. Stack sampling.

Any disagreement as to the application of this special allowance may be processed as a grievance under the provisions of the Basic Labor Agreement.

B. Fire Brigade Premium

Members of the Fire Brigade shall be entitled to a special Hazard Pay rate of Job Class 25 while fighting fires. Such rate shall only be paid while actually engaged in fighting fires and the rate of pay for training for Fire Brigade shall be the employee's regular rate of pay for the shift on which the training is given. Such training rate shall be paid to fire brigade members who are responding to the alarms and attending fire fighting incidents as observers.

C. Pay During Major or Minor Repairs

An employee whose regular classification is Job Class 6 or higher and is assigned to work directly related to major or minor repairs shall receive no less than the rate of pay for Job Class 6, unless current practices provide greater benefit.

Subsection 15. Reimbursement For Union Business

All lost time for Union business shall be paid by the Company at the scheduled rate of pay and shall be repaid by the Union to the Company once per month, which reimbursement shall include repayment of all taxes paid and deductions and withholdings lawfully incurred by the Company or reimbursement for overtime premium paid due to union business hours being included in the employee's work hours. All such lost time will be used in the calculation of pension service credits, overtime and vacations. For purposes of this Section, the Union shall designate by the beginning of each payroll year no more than ten (10) Local Union members who shall be eligible to receive such reimbursement during said payroll year.

SECTION VII: HOURS OF WORK

Subsection 1. Basis For Overtime � Not Work Guaranty

This Section is intended to provide a basis for calculating overtime and to define the normal hours of work, and shall not be construed as a guarantee of hours of work per day or per week.

Subsection 2. Normal Hours of Work

The normal hours of work shall be eight (8) per day and forty (40) per week. Daily hours of work shall be consecutive and twenty (20) minutes shall be allowed for lunch on the job. The Company shall continue its present practices for scheduling the twenty (20) minute lunch period.

Subsection 3. Definition of Workday and Workweek

For the purpose of computing overtime under this Section and not as a limitation upon the scheduling of employees for work, the workweek shall be a period of seven (7) consecutive days commencing at 12:01 A.M. Sunday or the shift-changing hour nearest to that time and the workday shall be a period of twenty-four (24) hours commencing at the shift-changing time nearest to 12:01 A.M. on such day. An employee called to begin work not to exceed one (1) hour before commencement of the night shift of his/her department in a workday, or who remains at work not to exceed one (1) hour after the end of the afternoon shift of a day, shall be considered as working in the workday, and workweek of such night or afternoon shift.

Subsection 4. Overtime

Unless worked pursuant to an agreed upon Alternative Work Schedule, overtime at the rate of one-and-one-half times the Standard Hourly Wage Rate shall be paid for hours worked:

A. In excess of eight (8) hours in any workday;

B. In excess of forty (40) hours in any workweek;

C. When an employee on the afternoon shift of any workday (as defined in Subsection 3 hereof) completes that shift and works additional consecutive hours at the termination thereof s/he shall be paid overtime for such consecutive hours worked in excess of eight (8) although they may fall within the succeeding workday.

D. On any day in any workweek after an employee shall have worked five (5) previous days in such workweek; provided, that in the case of any employee who has worked on five (5) previous days but has not worked forty (40) straight-time hours on said five (5) days due to absence from work for personal reasons of the employee, this Paragraph D shall not apply until the hours worked on the sixth or seventh day of the workweek bring the straight-time hours worked up to forty (40) hours for the workweek. In determining whether absence from work was for personal reason of the employee, the Company agrees that any grievance committeeperson who performs work during a shift and who is required to lose time from that shift in order to attend a scheduled mine grievance meeting, shall be given credit for this time off from scheduled work for the purpose of computing sixth or seventh day overtime under this Subsection 4 D.

E. On any sixth or seventh work day of a 7-consecutive-day period during which the first five (5) days were worked by the employee whether or not all of such days fall within the same workweek as defined in Subsection 3 of this Section VII except when that day is worked pursuant to a schedule approved by the Grievance Committee; provided, however, that no overtime compensation under this provision will be due unless the employee shall notify his/her Supervisor of a claim for overtime within a period of thirty (30) days after such sixth or seventh day is worked; and provided further that on shift changes the 7-consecutive-day period of 168 consecutive hours may become 152 consecutive hours depending upon the change in the shift. For the purposes of this Paragraph E all working schedules now normally used in any department of any mine shall be deemed to have been approved by the Grievance Committee. Such approval may be withdrawn by the Grievance Committee by giving sixty (60) days' prior written notice thereof to the Management.

F. Double time and one-half shall be paid for hours worked on a holiday in accordance with Section IX of this Agreement.

Overtime payment shall not be duplicated for the same hours worked under the terms of this Agreement but the higher of the applicable premiums shall be used. To the extent that hours are compensated for at overtime rates under one provision they shall not be counted as hours worked in determining overtime under the same or any other provision; provided, however, that when a holiday occurs on any day for which overtime would not otherwise be paid, the hours worked on such holiday shall be counted as hours worked in determining overtime.

When employees qualified to perform the work could be recalled from layoff because it is reasonably foreseeable that there will be work for such employees for a period of two or more weeks, then Management will notify the Union if it decides to have such work performed on an overtime basis instead of recalling employees. Upon the request of the appropriate Grievance Committeeperson, Management will discuss with them the reason for its decision and any suggested alternative. Such discussion will constitute full compliance with the requirements of this provision, without prejudice to any other rights which may exist under any other provision of the Agreement.

Subsection 5. Working Time

Working time shall include the time required to perform duties in connection with the employment before or after the shifts when specifically agreed to and only after such work is specifically agreed to and shall exclude travel time to and from the actual working place whether or not said travel shall be by conveyance furnished by the Company.

In open pit operations where transportation is provided by the Company, it is agreed that employees will travel one way on their time and one way on Company time. Travel on the employee's time shall not exceed ten minutes. The period of travel on the employee's time may be prior to the shift or at the end of the shift, but there shall be no combination of these periods. In the event travel time exceeds ten (10) minutes of the employee's own time on the shift, all travel time on that shift will be counted as hours worked by the employee.

Subsection 6. Reporting and Call-Out Pay

Employees who are regularly scheduled or who are notified to report and who do report for work shall be allowed; (A) in the event no work for which they were scheduled or for which they were notified to report, or called out, is available, for two (2) hours' work at the Standard Hourly Wage Rate of the occupation to which they were scheduled or for which they were notified to report or called out; (B) employees who actually begin work shall be paid for at least four (4) hours; and (C) employees who work more than four (4) hours shall be paid for eight (8) hours, provided, that at Management's discretion, any such employees may be assigned to other substantially equivalent work for which they are qualified and prepared; provided, further, that if such other work is at a lower rate of pay than the average hourly earnings for the job for which scheduled or notified to report s/he shall be paid his/her scheduled job average hourly earnings for the hours worked or allowed; provided, further, that this Subsection (except for reporting pay provided in item (A) hereof) shall not apply in the cases where work is not available due to causes beyond the reasonable control of the Company, and that no part hereof is applicable where work is not available because of strikes, work stoppages or work interruptions of that character. Employees recalled to work after leaving the Company's premises or called out for work on off days, shall be paid for at least four (4) hours.

There shall be no duplication of hours paid for whether worked or allowed. Allowed time, not worked, shall not be paid for as overtime nor included in computing overtime. Any additions provided by Subsections 8 and 9 of Section VI and Subsection 9 of this Section VII shall apply.

Subsection 7. Scheduling

The Company will, so far as practicable, arrange the working schedule so that employees will have two consecutive rest days in each workweek, and the Company's determination as to what is practicable shall be final, provided that if the Grievance Committee at any mine feels that the Company is arbitrarily failing to arrange working schedules so as to allow two (2) consecutive days of rest, so far as practicable, such questions may be presented as a grievance and the same shall be subject to the grievance procedure of Section XI hereof. Determination of the starting time of the daily and weekly work schedule shall be made by the Company and such schedules may be changed by the Company from time to time to suit varying conditions of the business; provided, however, that indiscriminate changes shall not be made in schedules solely for the purpose of avoiding payment of overtime and provided further, that changes deemed necessary by the Company shall be made known to the Grievance Committee of the Union as far in advance of such changes as is practicable. Should changes be made in schedules contrary to the foregoing so that an employee is laid off and does not work on a day that s/he was scheduled to work, s/he shall be deemed to have reported for work on such day and shall be eligible for a reporting allowance of four (4) hours in accordance with the provisions of Subsection 6 of this Section VII. The Company will also endeavor to give employees notice of any changes in the weekly working schedules in time to enable them to make changes in their plans in order to meet such schedules. Work schedules shall be posted by Wednesday. Changes in such schedules shall be posted not later than Friday of the preceding week. If, after such posting, changes are made in the schedules so that an employee is laid off on any day within the five (5) scheduled days for any reason except breakdown, power failure, storms, inability to obtain railway cars, or other matters beyond the control of Management, and is required to work on what would otherwise have been the sixth or seventh workday of that workweek, the employee shall be paid for such sixth or seventh day worked at overtime rates in accordance with Subsection 4 hereof. The Company shall give as much advance notice as is practicable in the case of layoff of any employee.

When an employee is transferred from one job to another, (a) to fill a permanent vacancy, or (b) to return to his/her former job or (c) to fill a job under the range-wide displacement procedure, or (d) to fill a temporary vacancy, and as a result thereof s/he and other employees affected by such transfer are scheduled to work in excess of five (5) consecutive days to effect the transfer, it is agreed that the schedules of such employees shall be deemed to have been approved by the Grievance Committee and no grievance shall be filed or processed thereunder.

Subsection 8. On-The-Job Injury

In the event an employee is injured in the course of his/her employment and such injury necessitates his/her being absent from his/her work for a portion of one shift, such employee shall be paid for the balance of that shift and the hours not worked shall be used for computing overtime, provided, however, that such absence occurs within five (5) days of such injury. In the event an employee who has returned to work following an on-the-job injury requires therapy or treatment, such care will be scheduled by management on company time and the employee will be compensated at his/her regular rate of pay for any time lost in receiving therapy or treatment and such time will be counted as time worked for the purpose of determining overtime pay.

If management cannot schedule therapy or treatment on company time, any employee so scheduled will be paid one (1) hour of allowed time for each scheduled therapy or treatment. Such time will be counted as time worked for the purpose of determining overtime pay. Any employee who schedules or reschedules therapy or treatment, and as a result receives therapy or treatment on his/her own time, will not be eligible to receive one (1) hour of allowed time. An employee who is working in or enters the immediate vicinity, of and is a witness to a serious injury or fatal accident shall not be required to work the remainder of that shift and, unless required for investigation purposes, may leave the property without penalty or loss of pay after notification to his/her supervisor.

Subsection 9. Jury or Witness Duty

An employee who is called for jury service or subpoenaed as a witness shall be excused from work for the days on which s/he serves. (Service, as used herein, includes required reporting for jury or witness duty when summoned, whether or not s/he is used.) Such employee shall receive, for each day of service on which s/he otherwise would have worked, the difference between the payment s/he receives for such service in excess of $5 and the amount calculated by the Company in accordance with the following formula. Such pay shall be based on the number of days the employee would have worked had s/he not been performing such service (plus any holiday in such period which s/he would not have worked) and the pay for each day of service shall be eight (8) times his/her average straight-time hourly rate of earnings) (excluding shift differentials and Sunday and overtime premiums) during the last payroll period worked prior to such service. The employee will present proof that s/he did serve or report as a juror or was subpoenaed and reported as a witness, and the amount of pay, if any, received therefore.

Subsection 10. Funeral Leave

When death occurs to an employee's legal spouse, mother, father, son or daughter (including step-children when they have lived with the employee in an immediate family relationship), an employee, upon request, will be excused and paid for up to a maximum of five (5) scheduled shifts (or for such fewer shifts as the employee may be absent) which fall within a seven (7) consecutive calendar day period. When death occurs to an employee's mother-in-law, father-in-law, son-in-law, daughter-in-law, brother, sister, grandparents or grandchildren (including step-father, step-mother, step-brother or step-sister when they have lived with the employee in an immediate family relationship), an employee, upon request, will be excused and paid for up to a maximum of three (3) scheduled shifts (or for such fewer shifts as the employee may be absent) which fall within a seven (7) consecutive calendar day period; provided, however, that in either of the above cases, (1) such calendar day shall be the day of the funeral and it is established that the employee attended the funeral. Payment shall be eight (8) times his/her average straight-time hourly earnings (as computed for jury pay). An employee will not receive funeral pay when it duplicates pay received for time not worked for any other reason. Time thus paid will not be counted as hours worked for purposes of determining overtime or premium pay liability. However, if an employee is on vacation, he/she will receive additional days off equal to what his/her funeral leave would have been had such employee been working.

Subsection 11. Volunteer Firemen and EMT�s

If as a result of performing duties as a Volunteer Fireperson or an E.M.T. an employee is late in reporting for his or her scheduled shift, the employee will be offered the opportunity to make up the lost time at the end of that shift or at the end of a subsequent scheduled shift in the same week. Elections to make up lost time must be in writing on a form provided by the Company.

Employees who elect to make up time will be paid at their posted rate of pay and shall not be eligible for an overtime lunch. It is understood that the employee will be assigned to available work once he or she reports; and further, that work assigned on the following shift will be made after all other employees on the oncoming crew have been assigned.

It is further understood that, notwithstanding Section VII, Subsection 4A, no overtime will be paid for make up time exceeding an employee's normal eight hour day.

Subsection 12. Alternative Work Schedules

The Company may adopt alternative work schedules consisting of ten (10) or twelve (12) hour per day scheduling with the approval of the Local Union President, the Grievance Chair, the appropriate District Director, and sixty percent (60%) of the Employees who are impacted by the alternative schedule.

Approval of an alternative work schedule may be revoked at any time more than six (6) months after its implementation by a simple majority vote of the bargaining unit Employees who are impacted by that schedule. Following such revocation, the Company shall reinstate the previous schedule as promptly as possible however no later than the 4th week after revocation, provided that further changes to the schedule may be made pursuant to the applicable provisions of the Basic Labor Agreement.

Subsection 13. Work Assignments and Schedules

A. Schedules During Major Pellet Plant Repairs

The Company will notify employees and post work assignments in the case of major and minor repairs as far in advance as practical. Employees will not be required to work more than seven (7) consecutive afternoon shifts or seven (7) consecutive night shifts during major pellet plant repairs.

B. Use of Leaders

It is the policy of the Company to have leaders perform only the duties normally associated with the job of Leader, such as assigning work, checking time, working with a crew, and instructing and directing a crew in the proper and safe performance of its work.

In the Company's Michigan operations, the Company will discontinue the use of the Leader position except as provided herein.

It is understood that the current permanent Leader positions as agreed to by the Company and Union may be continued by the Company provided, however, that any vacancies in these positions will be filled in accordance with the applicable posting and seniority provisions of the Basic Labor Agreement. It is further understood that, on occasion, the Company may assign a temporary Leader on a job-to-job basis which assignment shall be made under the provisions of Section X, Subsection 15 of the Basic Labor Agreement relative to temporary vacancies. Such assignment shall be for a period not exceeding two (2) weeks unless expanded by mutual agreement of the Company and local Grievance Committee. Such temporary Leaders will perform the functions as set forth in this Paragraph B and in the Leader Convention of the Job Classification Manual.

C. Overtime Assignments

Operating and maintenance employees who are on crews regularly scheduled on a four-crew, 21 shift rotation schedule, may be assigned, but shall not be required to work on the four-day weekend which occurs once every four weeks.

If an employee refuses such assignment, the Company will attempt to obtain a replacement from other operations and, if unsuccessful, will notify the Grievance Committee of its intent to obtain manpower from other sources.

It is understood that present maintenance crew schedules at any operation may be changed so that they do not regularly coincide with the operating crew schedules.

D. During the 1993 labor negotiations an issue involving certain summer vacation replacement work assignments was discussed. It is understood that for a limited number of special day shift assignments the Company will make every effort to be sensitive to the desires of permanent employees prior to assigning summer vacation replacements to such work.

SECTION VIII: VACATIONS

Subsection 1. Vacation Eligibility

A. An eligible employee who has attained the years of continuous service indicated in the following table in any calendar year during the continuation of this Agreement shall receive a vacation corresponding to such years of continuous service as shown in the following table:

Years of Service Weeks of Vacation

1 but less than 3 1

3 but less than 10 3

10 but less than 17 4

17 but less than 25 5

25 or more 6

B. To be eligible for a vacation in any calendar year during the term of this Agreement, the employee must:

1. Have one year or more of continuous service; and

2. Not have been absent from work for six (6) consecutive months or more in the preceding calendar year; except that in case of an employee who completes one (1) year of continuous service in such calendar year, s/he shall not have been absent from work for six (6) consecutive months or more during the twelve (12) months following the date of his/her original employment; provided that an employee with more than one (1) year of continuous service who in any year shall be ineligible for a vacation by reason of the provisions of this Paragraph as a result of an absence on account of layoff or illness shall receive one (1) week's vacation with pay in such year if s/he shall not have been absent from work for six (6) consecutive months or more in the twelve (12) consecutive calendar months next preceding such vacation.

3. Any period of absence of an employee while on vacation pursuant to this Section or while in military service in the year of his/her reinstatement to employment, shall be deducted in determining the length of a period of absence from work for the purposes of this Subsection, but shall not be considered an interruption of the consecutive period of absence.

4. Time lost by an employee because of injuries sustained in his/her employment within the period for which compensation is payable shall not be included in the total pay periods of six (6) months' absence during the year in which such injuries occur nor in the year in which s/he returns to work. In addition, employees absent from work for all or part of the preceding calendar year due to occupational disability shall be deemed, for vacation eligibility requirements, to have worked during all or part of such year during which s/he was absent on account of such occupational disability in the year of his/her reinstatement to employment.

C. Continuous service shall be determined by the employee's first employment by the Company and in accordance with the provisions for determination of continuous service as set forth under Section X hereof.

D. An employee, even though otherwise eligible under this Subsection 1 forfeits the right to receive vacation benefits under this Section if s/he quits or is discharged prior to January 1 of the vacation year. An employee who retires under the Company Pension Plan prior to January 1 of a vacation year will be paid regular vacation in January if otherwise qualified. Such payment will not affect pension benefits. The surviving spouse of a deceased active employee or retiree will be paid any regular vacation benefits in January of the year following death or retirement if the employee was otherwise qualified.

Subsection 2. Scheduling of Vacations

A. General

1. Prior to scheduling of vacations, Management and the Union Committee at each mine will meet to discuss the application of the provisions of this Subsection 2 and the Supplemental Understandings of Vacation Matters (Subsection 9 of this Section VIII) and Vacation By Days (Subsection 10 of this Section VIII).

2. Promptly after October 1 of each calendar year each eligible employee shall be requested to specify the vacation period s/he desires in the next calendar year. Vacations will so far as practicable, be granted at times most desired by employees (longer service employees being given preference as to choice); but the final right to allot vacation periods and to change such allotments is exclusively reserved to the Company in order to insure the orderly operation of the mine; provided that vacations may be scheduled at any time between January 1 and December 31 of each calendar year. The vacation schedule for each department at a mine will be posted in that department upon completion of the schedule, but not later than January 1 of the vacation year.

3. An employee transferring to another mine or department will carry his/her vacation schedule for the year with them unless such vacation would cause a shortage of qualified employees in the department. No employee senior to the transferee will have grounds to grieve the vacation of the employee entering the department.

B. Regular Vacations

1. A one week's vacation shall consist of 7 consecutive days, a two week's vacation of 14 consecutive days, a three weeks' vacation of 21 consecutive days, a four weeks' vacation of 28 consecutive days, a five weeks' vacation of 35 consecutive days, and a six weeks' vacation 42 consecutive days; provided, however, that in the event the orderly operations of the mine requires, the two weeks' vacation may be scheduled in two periods of 7 consecutive days each and the three weeks' vacation may be scheduled in two periods of 7 and 14 consecutive days, or with the consent of the employee, in three periods of 7 consecutive days each and the four weeks' vacation may be scheduled in two periods of 14 consecutive days each or in two periods of 7 and 21 consecutive days, or, with the consent of the employee, in three periods of 7, 7, and 14 consecutive days, or in four periods of 7 consecutive days and the five weeks' vacation may be scheduled in two periods of 14 and 21 consecutive days or 7 and 28 consecutive days or, with the consent of the employee, in five periods of 7 consecutive days, or in three periods of 7, 14, and 14 consecutive days, and the six weeks' vacation may be scheduled in two periods of 14 and 28 consecutive days or 21 and 21 consecutive days or, with the consent of the employee, in six periods of 7 consecutive days, or in three periods of 14, 14, and 14 consecutive days.

2. The Company may, with the consent of the employee, pay them vacation allowance, in lieu of time off for vacation, for any weeks of regular vacation in excess of two (2) weeks in any one (1) calendar year.

Subsection 3. Calculation of Vacation Pay

A. Each employee granted a vacation under this Section VIII will be paid at his/her average rate of earnings per hour for the prior calendar year. Vacation pay will be paid to an employee in advance of the scheduled vacation where adequate notice is given.

Average rate of earnings per hour (for the purposes of this Section) shall be computed by:

1. Totaling (a) pay received for all hours worked (total earnings including holiday premium overtime and Sunday premiums and shift differential), (b) vacation pay, including pay in lieu of vacation and (c) pay for unworked holiday, and

2. Dividing such earnings by the total of (a) hours worked, (b) vacation hours paid for, including hours for which pay in lieu of vacation was paid, and (c) unworked holiday hours which were paid for.

Such average rate of earnings will be adjusted to reflect intervening general wage changes, and retroactive pay adjustments, if any, for the job or jobs performed or paid for.

B. Hours of vacation pay for each vacation week shall be the average hours per week worked by the employee in the prior calendar year. Any weeks not having 32 hours of actual work shall be excluded for the calculation. Average hours per week worked shall be computed by:

1. Totaling the following hours in payroll weeks with 32 or more hours of actual work:

a. Hours worked

b. Hours paid for unworked holiday or vacation hours falling in such week

c. Hours paid for funeral leave

d. Hours paid for jury service

e. Hours paid for witness service

f. Hours excused from scheduled work and not paid for because of Union business, and

2. Dividing such hours by the number of such weeks in which 32 or more hours were worked.

The minimum number of hours paid for each week of vacation shall be 40 and the maximum number of hours paid for each week of vacation shall be 48.

Any employee who did not work in the prior year shall have his/her vacation pay computed on the basis of his/her last calculated vacation rate and hours, adjusted in accordance with the last sentence of Paragraph A above.

The definitions contained herein are designed for and shall be used exclusively for the purpose of calculating vacation pay.

Subsection 4. Pay in Lieu of Vacation

A. The Union and the Company agree that their mutual objective is to afford maximum opportunity to the employees to obtain their vacations and to attain maximum production. All employees eligible for vacation shall be granted their vacation from work except as provided in Subsection 2 B. 2. of this Section. Pay in lieu of vacation due an employee shall be computed as provided in Subsection 3 above.

B. Any payment of vacation allowance shall not require the Company to reschedule the vacation of any other employee.

Subsection 5. Part-Time Employees

A. A part-time employee is an employee who regularly, for his/her own convenience, is not available for full-time employment.

B. The 40-hour-per-week minimum referred to in Subsections 3 and 4 above shall not apply to part-time employees.

Subsection 6. Expedited Procedure

In the event that either the Union or the Company requests an expedited resolution of any dispute arising under Subsection 1 or 2 above, it shall be submitted to the Cliffs Board of Arbitration in accordance with the following Expedited Procedure:

1. Within ten (10) days (excluding Saturdays, Sundays and Holidays) after Step 4, either the Union or Company may advise the other in writing that it is invoking this expedited procedure.

2. An expedited arbitration must be scheduled within ten (10) days (excluding Saturdays, Sundays and Holidays) of such notice and heard at a hearing commencing within thirty (30) days thereafter. The arbitrator, or his/her appointee, shall hear the dispute and, if no arbitrator is available to hear the dispute within thirty (30) days, another arbitrator shall be selected by mutual agreement of the District Director of the Union or his/her designee and the Vice President-Human Resources of the Company or his/her designee.

3. The arbitrator must render a decision within forty-eight (48) hours (excluding Saturdays, Sundays and Holidays) of the conclusion of the hearing. Such decisions shall not be cited as a precedent by either party in any future disputes.

Subsection 7. Vacation Bonus

A vacation bonus of $250 per week will be paid to employees for each week of vacation taken in a 10-week period to be specified. The Local Union and Company shall attempt to mutually agree upon the 10-week period prior to beginning vacation scheduling for the year to which the bonus is applicable. Failing to agree upon the specific 10-week period will result in that period being the 10 consecutive week period beginning with the first full week following the week containing New Year's Day.

Subsection 8. Vacation Shutdown

In case Management desires to schedule vacations for employees eligible therefore during a production shutdown period instead of in accordance with previously established vacation schedules for that year, Management shall give affected employees sixty (60) days notice of such intent; in absence of such notice an affected employee shall have the option to take his/her vacation during the shutdown period or to be laid-off during the shutdown and to take his/her vacation at the previously scheduled time. Up to two (2) weeks of vacation may be scheduled during a vacation shutdown so long as it is during the months of June, July or August. Notwithstanding the above, all employees will be allowed to reserve one week of vacation eligibility outside of the shutdown period. Further, vacation quotas will not be recalculated as the result of a vacation shutdown.

Subsection 9. Supplemental Understandings on Vacation Matters

I. General Understandings

A. The Company will continue its present practice of permitting employees to take so-called "back-to-back" vacations where practicable. The Company also agrees to pay vacation pay prior to the taking of this type vacation where adequate notice is given.

B. This will continue our understanding that any employee otherwise entitled to vacation pursuant to the Section entitled "Vacations" of any labor agreement between us in the calendar year in which s/he retires under the terms of any Pension Agreement between us which makes them eligible for a special initial pension amount, but who has not taken such vacation prior to the date of such retirement, shall not be required to take a vacation in that calendar year and shall not be entitled to vacation pay for that calendar year.

C. The calendar week containing New Year's Day may be taken as a week of vacation for either the year preceding New Year's Day or the year in which New Year's Day falls, except when New Year's Day falls on Sunday, provided such vacation week has been scheduled as vacation in accordance with this Section. If the Company in its sole discretion schedules a shutdown of any operation during the calendar week containing Christmas Day, any employee who is not scheduled to work due to the shutdown in such week and who has completed his/her vacation entitlement for that year may elect to reschedule a week of regular vacation for which the employee has qualified and will be entitled in the following calendar year into the shutdown week; provided, however, that vacation pay for such vacation week, calculated as though the week were scheduled and taken in the next following year will by paid on the regular payday for the pay period in which the shutdown vacation falls; and provided further that no vacation pay for a vacation rescheduled hereunder will be paid to an employee who quits, or is discharged prior to January 1 of the year from which the shutdown vacation was rescheduled. In the application of this Paragraph 1-C, when the basis for calculation of an employee's vacation pay for the following calendar year is not available, his/her vacation payment hereunder shall be made on the basis for calculation of his/her vacation pay in the current calendar year with appropriate adjustment to be made when the basis for the following calendar year becomes available.

D. With regard to employees whose vacations are scheduled prior to May 1 it is understood that such employee will be permitted to begin his/her vacation on any day of the week, provided that in doing so s/he shall not be absent from work in the vacation week for more or less than the number of shifts which s/he is regularly scheduled to work in a workweek.

II. Understandings on Vacation Scheduling

In this Agreement the parties have two main objectives:

1. To give maximum flexibility to long-service employees in the scheduling of all types of vacations in the order of their length of service, and in a manner that will insure orderly operation of the mine.

2. To achieve even distribution of the vacation obligation in order to have the minimum effect on the operations due to skill dilution.

A. Regular Vacations

1. The scheduling of regular vacations will continue to be handled on an annual basis in accordance with the terms of the Basic Labor Agreement and prevailing practices. Where operations permit, the Company will consider the scheduling of vacation shutdowns in order to provide the opportunity for prime vacation time to the maximum number of employees.

2. At those operations where vacation shutdown is not possible, the quota principle will be followed based on total man-weeks of vacations.

B. Vacation Scheduling General

1. Notwithstanding any of the procedures outlined above the Company will attempt to accommodate the vacation desires of individuals. The Company will post for an appropriate period of time and on a continuous basis, all openings (including openings which result from an employee exercising his/her option to take pay in lieu of vacation) which occur in the original schedule for regular vacations, unless such posting would continue vacation schedules in excess of the original vacation quotas in a department. Interested employees may request a change in their vacation schedule. Changes are to be awarded on the same basis as original vacation schedules are determined. It is agreed that nothing in the above shall affect the Company's final right to allot vacation periods and to change such allotments in order to insure the orderly operation of the mines as provided in the various agreements covering these matters.

2. These understandings do not amend or modify the provisions of the Basic Labor Agreement, or other agreements related thereto except to the extent necessary to implement the provisions of these understandings and they shall not increase the Company's financial obligation under the Plan.

3. The parties agree to meet at any time that problems arise in the application of this Agreement and to make the necessary changes which may be required.

C. Time off for Holidays During Vacation

The Company will provide, at the employee's option, a maximum of one day off either preceding or following the employee's vacation for each Holiday which occurs during any week of the employee's vacation. The allowed days off, if taken, are without pay and must be scheduled at the time the employee schedules vacation and will be either the last scheduled shift before the vacation commences or the first scheduled shift after the vacation ends.

Subsection 10. Vacation By Days

The following guidelines will apply:

1. Employees will be polled as to their desire to split one week of their vacation entitlement prior to that year's vacation scheduling poll.

2. The total number of weeks designated to be split will be used to reduce the next year's entitlement prior to determining regular vacation allotments.

3. Regular vacation allotments will be determined as per the normal practice of each location.

4. Split weeks will be scheduled one day at a time with no more than two consecutive days or no more than two days falling in one week.

5. Existing vacation scheduling guidelines will apply.

6. The allotment for single day vacation scheduling is one.

Subsection 11. Miscellaneous Vacation Matters

A. Job Vacancies During Vacations

Prior to the taking of a vacation an employee may indicate his/her desire to apply for specific jobs in the event an opening in any such jobs occurs while s/he is on vacation. If any such job is posed during the vacation period, his/her application will be considered along with any other applications.

B. Receipt of Vacation Pay

An employee may elect to receive vacation pay for the beginning of his/her vacation prior to commencement of vacation. However, the vacation earnings would be included in taxable earnings for the year in which payment is received.

C. Rate of Vacation Allowance and Hours

At the start of the vacation year, the Company will advise each employee of the hours and rate of pay which will be used to calculate vacation pay for that year.

SECTION IX: HOLIDAYS AND PERSONAL DAYS

Subsection 1. Designated Holidays

Whenever used in this Agreement, the term "Holiday" means one of the following days: January 1, Washington's Birthday, which shall be a floating holiday, Good Friday, Memorial Day, July 4th, Labor Day, opening day of deer hunting firearms season, Thanksgiving Day, the day after Thanksgiving Day, the day before Christmas Day, and Christmas Day. If any of such holidays shall fall on a Sunday, the following Monday (and not such Sunday) shall be observed as such holiday.

Subsection 2. Pay For Un-worked Holiday

An eligible employee who does not work on a holiday shall be paid eight (8) times his/her average straight-time hourly rate of earnings (excluding overtime, shift and Sunday premiums) during the payroll period next preceding the payroll period in which the holiday is observed; provided, however, that if an eligible employee is scheduled to work on any such holiday, but fails to report and perform his/her scheduled or assigned work, s/he shall become ineligible to be paid for the unworked holiday, unless s/he has failed to perform such work because of sickness or because of serious sickness or death in the immediate family (mother, father, [including in-laws], children, brother, sister, husband, wife and grandparents) or because of similar good cause. As used in this Section, an eligible employee is one who

A. has worked thirty (30) shifts since his/her last hire;

B. performs work or is on vacation in the semi-monthly period in which the holiday is observed; or if s/he is laid off for such semi-monthly period, performs work or is on vacation in both the semi-monthly period preceding and the semi-monthly period following the semi-monthly period in which the holiday is observed, and

C. works as scheduled or assigned both on his/her last scheduled workday prior to and his/her first scheduled workday following the day on which the holiday is observed; unless s/he has failed to so work because of sickness or because of serious sickness or death in the immediate family or because of a similar good cause.

Holiday allowance shall be adjusted by an amount per hour to reflect any general increase in effect at the time of such holiday, but not in effect in the period used for calculating holiday allowances.

Subsection 3. Holiday During Vacation

An eligible employee who would otherwise be entitled to pay for an unworked holiday and who shall be scheduled pursuant to the provisions of Section VIII to take a vacation during a period when a holiday occurs, shall be paid for the unworked holiday at the time s/he is paid his/her vacation pay.

Subsection 4. Part-Time Employees

An eligible part-time employee shall receive pay for holidays in accordance with the foregoing provisions of this Section, but the pay that s/he shall receive for any such holiday shall be an amount equal to his/her applicable hourly rate (as defined in Subsection 2) times the lesser of 8 or the average number of hours worked by them per day in the preceding two pay periods.

Subsection 5. Premium Pay For Worked Holiday

No employee shall receive pay for hours worked on any holiday at a rate in excess of double time and one-half.

Subsection 6. Holiday Considered As Day Worked

In determining whether an employee has worked on more than five days in any week for the purpose of Section VII, Subsection 4 D, E and Subsection 7 of this Section IX, a holiday occurring in such week shall be considered as a day worked by them whether or not s/he shall have worked on such holiday and regardless of whether it was scheduled as a day of work or a day of rest.

Subsection 7. Start of Holiday

A holiday shall be deemed to be the 24-hour period beginning at the shift changing time nearest to 12:01 A.M. on such holiday.

Subsection 8. Agreement on Floating Holiday

The parties agree to provide, a floating holiday to each employee who is eligible to receive his/her full vacation benefit under Section VIII, Subsection 1 of the Basic Labor Agreement. The floating holiday shall replace Washington's Birthday under Section IX of the Basic Labor Agreement.

The administration of this provision will be by the local parties with the understanding that there will be situations when the floating holiday will not be granted such as:

A. When the time off would exceed minimum restrictions during holiday periods.

B. When the time off would exceed minimum restrictions under special scheduling agreements.

The scheduling of a floating holiday shall not result in an employee being entitled to overtime that would not normally occur in his/her work schedule.

An employee who has not received his/her floating holiday by December 31 of the vacation year will receive pay for his/her holiday in lieu of time off. Payment shall be eight (8) times the employee's average straight time hourly rate of earnings (excluding overtime, shift and Sunday premiums) during the payroll period next preceding the payroll period in which December 31 occurs.

Subsection 9. Personal Day

The Personal Day is defined as a regularly scheduled day of work for which an employee is absent because of unavoidable reasons such as personal illness or emergency; or for a personal reason which was excused by the Department Superintendent seven (7) days in advance. Only a full shift of absence will be counted as a Personal Day and employees will be paid eight (8) hours at their average straight time hourly rate of earnings (excluding overtime, shift and Sunday premiums) during the payroll period next preceding the payroll period in which the Personal Day is taken for such Personal Day.

Employees who do not take their Personal Day during the calendar year will be paid for the day on the fourth pay period during the following payroll year.

Subsection 10. Holiday Work Schedules

It is the intent of Management at each property to schedule the minimum crew required for necessary work to be performed on holidays.

SECTION X: SENIORITY

Subsection 1. Seniority Factors

At each mine on the Marquette Range in Michigan in all cases of promotion (except promotion in positions excluded from the appropriate bargaining units as defined in Section II of this Agreement) and for the purpose of layoffs in connection with the decreasing of the working forces and of the recalling to work of men so laid off, the following factors shall be considered; and if factors B and C are relatively equal, the length of continuous service shall govern:

A. Length of continuous service with the Company

B. Physical fitness, and

C. Ability to perform the work.

Subsection 2. Marquette Range Operations

It is understood that each of said mines and shops shall be separate seniority units for the purposes of Subsection 1; provided, however, in the application of Subsection 1, to mines on the Marquette Range during layoffs in connection with the decreasing of the working forces and of the recalling to work of employees so laid off, the provisions of Section III of the Seniority and Posting Agreement, dated August 1, 2004 shall govern.

Any new mine which comes within the terms of this Agreement shall be included within the above seniority unit for the purposes of this Subsection 2 and shall be a separate unit for the purposes of Subsection 1.

Subsection 3. Termination of Groups or Classifications

When requested in writing by either party, determination of the groups or classifications at the particular mine to which the above factors shall be applied and the applicable continuous service in each such group or classification shall be made and may likewise be changed or modified by agreement in writing by the Management and the Grievance Committee at the particular mine involved.

Subsection 4. Computation of Length of Continuous Service

Computation of length of continuous service with the Company shall be based on the length of continuous service lists heretofore posted by the Company under the provisions of previously existing contracts between the Company and the Union as corrected in accordance with the procedure under such contracts insofar as all employees appearing on such lists are concerned; in case of employees not appearing on such lists, length of continuous service with the Company shall be computed from the most recent date of employment with the Company. The Company shall furnish the Union with a new seniority list at six-month intervals or more frequently, if needed. Copies of such lists will be posted at the mine.

Subsection 5. Availability of Records

The Company will make available to the Union any record information which it has that is necessary to settle specific disputes as to seniority rights and in the case of a dispute the matter shall be adjusted in accordance with the grievance procedure set forth in this contract beginning with the second step thereof.

Subsection 6. Break In Service

In computing length of continuous service there shall be no deduction of any time lost which does not constitute a break in the continuous service. Continuous service is broken by:

A. Voluntarily quitting the service.

B. Absence due to discharge, termination, suspension, or leave of absence any of which continues for more than six (6) months.

C. Absence due to disability or layoff in accordance with the following conditions:

1. If an employee is absent because of layoff or physical disability in excess of two years, he shall continue to accumulate continuous service during such absence for two years and for an additional period equal to (a) three years, or (b) the excess, if any, of his/her length of continuous service at commencement of such absence over two years, whichever is less. Any accumulation in excess of two years during such absence shall be counted, however, only for purposes of this Section X, including local agreements thereunder, and shall not be counted for any other purpose under this or any other agreement between the Company and International Union. In order to avoid a break in service within the above period after an absence in excess of two years, an employee absent because of layoff or physical disability must report for work promptly upon termination of either cause, provided, in the case of layoff, the Company has mailed a recall notice to the last address furnished to the Company by the employee.

(i) For the purpose of applying Section X. Seniority, Subsection 6. C. 1., an employee will continue to accumulate continuous service during the period of a non-compensable physical disability without regard to the length of disability or the giving of annual notices required by this Subsection.

(ii) It is understood that the provisions of Section X. Seniority, Subsection 6. C.. 1., shall not apply to employees hired prior to August 1, 1971, where such an employee would otherwise experience a break in service due to absence because of layoff under the provisions of this Subsection.

2. Employees absent due to compensable injury shall accumulate credit for continuous service if returned to work within thirty (30) days after the expiration of the period for which statutory compensation is payable.

3. If an employee is rehired after a break in continuous service as determined by Subsection 6. C. 1. of Section X and the employee is either eligible for an immediate or deferred vested pension or such employee's pension service is restored in accordance with Section 5.1(c) of the Pension Agreement, the employee's pension continuous service shall be deemed the employee's continuous service when applying all of the provisions of the Basic Labor Agreement, Seniority and Posting Agreement, Supplemental Unemployment Benefit Agreement, Program of Insurance Benefits and Program of Hospital Medical Benefits. Notwithstanding the above, the employee's seniority shall be the greatest of that determined pursuant to Section X or as determined in accordance with this provision or Appendix Y.

D. Failing within fifteen (15) days after mailing of written notice by the Company addressed by registered mail to his/her last known address on record with the Company, to report for available work or to obtain a leave of absence therefrom.

E. Failing within fifteen (15) days after mailing of written notice by the Company by registered mail addressed to his/her last known address on record with the Company, to indicate his/her desire by registered mail to be continued on the records of the Company as available for immediate recall to work.

Subsection 7. Probationary Employees

New employees and those hired after a break in continuity of service will be regarded as probationary employees for the first 720 hours actually worked and receive no continuous service credit during such period. The probationary period may be extended in individual cases by mutual agreement between mine management and the Grievance Committee. During the period of probationary employment, probationary employees may be laid off or discharged as exclusively determined by Management, provided that this provision will not be used for the purpose of discrimination because of race, color, religious creed, national origin or sex or because of membership in the Union. Probationary employees continued in the service of the Company subsequent to such probationary period shall receive full continuous credit from the beginning of the probationary period. Where a probationary employee is relieved from work because of lack of work and his/her employment status terminated in connection therewith, and he is subsequently rehired at the same mine within one year from the date of such termination, the hours of actual work accumulated by such probationary employee during his/her first employment shall be added to the hours of actual work accumulated during his/her second employment in determining when the employee has completed 720 hours actually worked; provided, however, that should such an employee complete 720 hours actually worked in accordance with this sentence, his/her continuous service date will be the date of hire of his/her second hiring. If, however, such an employee is rehired within two weeks of his/her last termination from employment at the same mine, his/her continuous service date will be the date of hire for his/her prior employment.

Students hired for temporary employment shall be considered probationary employees for the purposes of Subsection 7 for 120 calendar days following the date of hire. Hours shall not accumulate from year to year for students hired for temporary employment. The Company will notify the Union's International Representative of the status of such temporary student employee.

Subsection 8. Leave For Union Office

An employee having a length of continuous service with the Company of one (1) year or more who shall be appointed or elected to an office in the Union local or International, may upon the written request of the Union, be granted a leave of absence for a period of two (2) years, which such leave of absence may be extended or renewed for a further period of three (3) years. Such employee�s length of service record shall be computed as though the employee was continuously employed by the Company during such leave of absence.

Subsection 9. Leave for Public Office

Leave of absence will be granted to the end of elected office for employees elected or appointed to term limited offices at the state and federal level. During such period, the employee shall accumulate continuous service up to a maximum of two (2) years and shall retain their accumulated continuous service for an additional period equal to their term of elected office. If such employee does not return to work within thirty (30) days after their term of office ends, their continuous service shall be broken.

An employee shall be granted a leave of absence for a period not to exceed one (1) year without loss of continuous service to enter a training program conducted by the state or federal government for the purpose of qualifying for a civil service position.

Subsection 10. Special Leave of Absence

An employee working in a permanent job or a laid-off employee at the time of his/her recall to a permanent job may make application for a special leave of absence by submitting a written request, on a form provided by the Company, to the Mine Human Resources Department. In the case of a non-craft employee, a special leave of absence shall be granted provided there is a qualified replacement available at a mine or on the range-wide recall list. In the case of a craft employee, a special leave of absence shall be granted provided there is a replacement available at a mine or on the range-wide recall list who has held the same classification. An employee granted a special leave of absence shall forfeit his/her permanent job posting. Vacancies resulting from special leaves of absence shall be posted as permanent vacancies (Leave of absence forms are set forth in Appendix M).

The special leave of absence will not exceed a period of two (2) years. In the case of an employee working in a permanent job, the two (2) year period shall commence upon the date of the last shift worked by the employee. In the case of a laid-off employee scheduled to be recalled to a permanent job, the two (2) year period shall commence upon the date he was scheduled to be recalled. An employee may obtain a special leave of absence only once during the term of a Labor Agreement.

Upon commencement of the special leave of absence, the employee's continuous service for the purposes of Section X of the Labor Agreement and Section III of the Seniority and Posting Agreement shall continue to accumulate in the same manner as that of a laid-off employee pursuant to Section X, Subsection 6.C.1. of the Labor Agreement.

Notwithstanding any provisions of the Labor Agreement and/or Pension Agreement to the contrary, the employee's continuous service for pension purposes shall break on the effective date of the special leave of absence. Upon recall to work, the employee will be credited with his/her length of continuous service accrued prior to the break.

Notwithstanding Section 9.15 (Coverage in the Event of Ceasing Work Because of Leave of Absence) of the January 1, 2005 Program of Insurance Benefits booklet, all group insurance coverage, eligibility for and S.U.B. Benefits, shall cease on the effective date of the special leave of absence. An employee's group insurance coverage and entitlement (if any) to S.U.B. Benefits will be re-instituted when he returns to work from the special leave of absence.

At any time during the special leave of absence an employee may, by written notification, advise the Mine Office that he desires to terminate his/her special leave of absence and be returned to the range-wide layoff list and subject to recall in accordance with Section III, Subsection 2 of the Seniority and Posting Agreement.

An employee who fails to notify the Mine Labor Relations Department in writing within the thirty (30) day period prior to the expiration of the two (2) year special leave of absence of his/her desire to return to work shall be deemed to have voluntarily terminated and shall have no rights hereunder to recall.

Notwithstanding the above, when no non-craft employees are on layoff, no more than ten (10) employees may be on leave at any one time from either the Empire or Tilden. This special leave of absence provision is not available to individuals hired as summer vacation replacements.

Subsection 11. Short-Term Leave for Union Representatives

Where it will not substantially interfere with production, elected or appointed representatives of the Union shall be granted leaves of absence of not more than fourteen (14) days except as extended by mutual agreement for the purpose of attending Union conventions, district meetings or other similar Union functions. Whenever possible, notification of need for such leaves of absence will be presented to the employee's supervisor at least forth-eight (48) hours prior to the end of the last shift to be worked by the employee.

Subsection 12. Employee Transferred to Non-Bargaining Position

An employee who is transferred prior to January 1, 1975 from a position within the bargaining unit herein set forth to a position excluded from such unit and later returned to a position within such unit, shall have his/her length of service determined in accordance with Subsection 14 of Section XI of the August 1, 1971 Basic Labor Agreement.

Subsequent to January 1, 1975, a bargaining unit employee who is transferred to a position outside the bargaining unit will continue to accumulate length of service for a maximum period of one (1) year from the date of the transfer. If such employee does not return to a job within the bargaining unit within the one (1) year period, his/her accumulated length of service shall be frozen for the purpose of Section X of the Basic Labor Agreement and the Seniority & Posting Agreement.

If such employee should return to a bargaining unit position within one (1) year of the transfer, he shall be credited with the length of service at the time of his/her transfer plus the length of service in such excluded position.

Subsection 13. Seniority of Union Officers and Committeepersons

The members of the Grievance Committee at the mine and the officers of the Local of the Union designated as the collective bargaining agency at such mine (if employees), not exceeding a combined total of ten, for their respective terms of office shall have top seniority rights in their respective seniority units for the purpose of layoffs in connection with the decreasing of the working force in such units and for the recalling to work of employees so laid off; provided, however, that no such committeeperson or officer need be retained in the employ of the Company unless work which he can perform is available in his/her seniority unit, and provided further that such top seniority rights for recall purposes shall apply only at the mine from which he was laid off. The District Director of the Union shall designate in writing to the Area Manager-Labor Relations the names of such committeemen and officers (not exceeding ten as above provided) who shall have top seniority rights in accordance with the foregoing provisions.

Subsection 14. Reduction of Work-Week

If as a result of the decrease in work, other than decreases which may occur from day to day, the average scheduled hours of work of the employees in a seniority unit shall be reduced for a period of two (2) consecutive weeks to less than thirty-two (32) hours per week and in the judgment of the Company that level of work will continue for an extended period of time, the Company will either (a) reduce the working forces in such unit to an extent which shall be sufficient to enable the employees working there to average thirty-two (32) hours per week, or (b) if the Company reduces the hours of work to less than thirty-two per week with a view to distributing the work available between all employees so far as practicable, the Company will lay off any employee who objects to working on a schedule of less than thirty-two (32) hours per week if and when requested to do so by any such employee.

Subsection 15. Temporary Vacancies

In cases of temporary vacancies the Company shall, to the greatest degree consistent with efficiency of the operation and safety of employees, assign the employee with highest seniority, provided he is qualified.

TABLE OF CONTENTS

Subsection 5. Exoneration

Subsection 6. Non-Transmission of Dues

Subsection 7. Indemnification

Subsection 10. Holiday Work Schedules

Subsection 2. Marquette Range Operations