Master Collective Bargaining Agreement

Between


UNITED STEELWORKERS OF AMERICA, AFL-CIO


And


BarTech and RES Acquisition Corporation


Settlement Agreement
Table Of Contents


I. Bargaining Structure, Harmonization of Agreements, and Economics Page 3
A. Bargaining Structure/Single Agreement/Expiration Dates 3
B. Harmonization and Extension of Terms and Conditions of
Employment 5
C. RESI CBA Economic Modifications 8
D. NuBar Profit Sharing 10
E. Pension Plan Modifications 14
F. Insurance 18


II. Early Retirement Buyout Package ("ERB") and Voluntary Severance Plan
("VSP") 19
A. Purpose 19
B. Amount of ERB Package 20
C. ERB Eligibility 21
D. Distribution of ERB's: Priority and Procedures 21
E. Additional Duties of JIC 23
F. Voluntary Severance Plan 23
G. Limited Exception to Employment Security Plan 24
H. Special Provision for Certain Non-ERB-Eligible Employees
Affected by a Possible Plant Shutdown at Willimantic 25


III. Appendices


A. A Master Agreement set forth in Appendix A 1
Article I - Purpose, Scope, And Recognition 1
Article II - Union Security and Check-off 2
Article III - Management Rights 3
Article IV - Responsibilities of the Parties 3
Article V - Workforce Flexibility 4
Article VI - Partnership 6
Article VII - Capital Spending Plan, Upstreaming and Management
Fees 18
Article VIII - Employment Security Plan 20
Article IX - Neutrality 23
Article X - Successorship 29
Article XI - Contracting Out 30
Article XII - New Employee Orientation 42
Article XIII - Hiring Preference 44
Article XIV - Board of Directors 44
Article XV - Institute for Career Development 45
Article XVI - Manning of New Operations 49
Article XVII - Right to Bid 53
Article XVIII - Union Role In Negotiation of Benefits 55
Article XIX - Printing of Contracts 56


Article XX - SOAR/PAC 56
Article XXI - Family and Medial Leave Act 57
Article XXII - Leave of Absence Policy for Union Employees 62
Article XXIII - Grievance and Arbitration Procedure 63
Article XXIV - Suspension and Discharge 67
Article XXV - Safety and Health 68
Article XXVI - Allowance for Funeral Leave 73
Article XXVII - Hours of Work 74
Article XXVIII - Holidays 76
Article XXIX - Vacation 77
Article XXX - Jury Duty 78
Article XXXI - Employees in Military Service 79
Article XXXII - Savings Clause 81
Article XXXIII - Seniority 81
Article XXXIV - Severance 86
Article XXXV - Substance Abuse 89
Article XXXVI - Wages 93
Article XXXVII - Termination Date 96


B. Letter of Understanding covering the Corporate Structure
of NuBar as set forth in Appendix B 97


C. Letter of Understanding Modifying the Employment Security
Article of the Master Agreement as set forth in Appendix C 99


D. Letter of Understanding covering the merger of the Gary Dunes
and 7TH Avenue Plants of RESI as set forth in Appendix D 100


E. Letter of Understanding covering the Interest Arbitration Award
(1997) as set forth in Appendix E 101


F. Letter of Understanding covering the merger of the RESI DCP
and DBP as set forth in Appendix F 102


G. letter of Understanding modifying the Neutrality Article of the
Master Agreement as set forth in Appendix G 103


H. Letter of Understanding covering the NuBar Share Purchase as set
forth in Appendix H 104


I. Letter of Understanding covering the Ratification Process in
Negotiations in year 2003 as set forth in Appendix I 105


J. Letter of Understanding covering the Reimbursement to Local
Union for Negotiations as set forth in Appendix J 106


K. Letter of Understanding covering the RESI Share Sale as set
forth in Appendix K 107


L. Letter of Understanding modifying the Successorship regarding
the Cold Finished Plans as set forth in Appendix L 108


M. Letter of Understanding covering Retiree Health Care costs
as set forth in Appendix M 110


N. Letter of Understanding covering C&BL Railroad as set forth
in Appendix N 111


O. Letter of Understanding covering BarTech Employee Equity
Interest as set forth in Appendix O 112


P. Letter of Understanding covering Incentive Plan Redevelopment
as set forth in Appendix P 113


Q. Letter of Understanding covering Job Classification
Consolidation as set forth in Appendix Q 114


R. Letter of Understanding covering Deletions from RESI
Predecessor Labor Agreement as set forth in Appendix R 120


1998 SETTLEMENT AGREEMENT
Between
UNITED STEELWORKERS OF AMERICA, AFL-CIO
And
BarTech and RES Acquisition Corporation


WHEREAS, the controlling stockholders of Bar Technologies Inc. (hereinafter "BarTech") who are affiliated with Blackstone Management Partners L.P. ("Blackstone") have formed a corporation ("RES Acquisition Corporation") which has made a friendly proposal to Republic Engineered Steels, Inc. ("RESI") to acquire all of the shares of RESI(such acquisition, the "RESI Acquisition") and RESI and RES Acquisition Corporation have entered into an Agreement and Plan of Merger (the "Merger Agreement") dated as of July 23, 1998 pursuant to such proposal. As soon as practicable following consummation of the RESI Acquisition, it is intended that BarTech and RES Acquisition Corporation engage in a business combination transaction (the "Transaction"), with the resulting combined entity currently expected to be known as NuBar (the closing of such Transaction the "Closing"); and


WHEREAS, in the event that the Transaction is completed, the combined entity NuBar would own the following plants represented by the United Steelworkers of America (the "USWA" or "Union"): from BarTech, the plants in Johnstown, Pennsylvania, and Lackawanna, New York; from BarTech's subsidiary Bliss & Laughlin Steel Company ("B&L") and Canadian Drawn Steel Company ("Canadian Drawn"), the plants in Harvey, Illinois, and Hamilton, Ontario (Canada) respectively; and from RESI, Massillon Cold Finish, Massillon Hot Roll, Special Metals (Massillon), all in Massillon, Ohio, and Canton Eighth Street in Canton, Ohio, the plant in Chicago, Illinois, the cold-finished plants in Beaver Falls, Pennsylvania, Willimantic, Connecticut, Seventh Avenue and Dunes Highway, both in Gary, Indiana, and a stainless plant in Baltimore, Maryland. In addition, NuBar would own B&L's cold-finished plants in Batavia, Illinois, Cartersville, Georgia (both non-union), and Medina, Ohio (Machinists Union); and


Final Settlement Agreement August 1, 1998


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WHEREAS, if the Transaction is consummated, NuBar will build a bar mill and processing facility(ies) in Stark County to be manned with USWA-represented employees. At the same time, the NuBar business plan calls for a significant reduction of RESI plant support and administrative personnel, the closing of the Canton 12" mill, the ingot route at the #4 melt shop and blooming mill, the Massillon 18" mill, associated processing operations, and a reduction in the number of the combined entity's cold finishing operations. Overall, a decline in the net hourly headcount of about 1,400 is expected during the four (4) years of transition/consolidation after the consummation of the Transaction; and


WHEREAS, in discussions with BarTech and RES Acquisition Corporation, the Union has emphasized its objectives of, among other things, encouraging the contemplated new construction in Stark County, providing a decent and humane set of retirement options for employees affected by headcount reductions, and assuring that any NuBar transaction preserve as many bargaining units jobs as possible; and


WHEREAS, RES Acquisition Corporation has indicated that it will not enter into the Merger Agreement unless this Settlement Agreement has first been entered into by the Union and will not consummate the acquisition of a majority of the outstanding RESI shares unless the Master Agreement (as defined below) has first been ratified by the Union's members affected thereby, the effectiveness of this Settlement Agreement and the Master Agreement conditional upon the acquisition of a majority of the outstanding RESI shares by RES Acquisition Corporation and RES Acquisition Corporation having elected a majority of the RESI directors (the "RESI Control Position") for those employees currently employed by RESI ("RESI Employees"); and the Closing (or earlier as described below) for these employees currently employed by BarTech/B&L/Canadian Drawn ("BarTech Employees"); RES Acquisition Corporation will use all reasonable efforts to promptly following its acquisition of a majority of the outstanding RESI shares to elect a majority of the RESI directors; and


WHEREAS, while RES Acquisition Corporation is under no obligation pursuant hereto to complete the RESI Acquisition, it is understood that the RESI Acquisition and subsequent Transaction would, if consummated, necessitate customary steps, including, among others, the negotiation and ratification of a


Final Settlement Agreement August 1, 1998


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complete labor agreement for RESI and/or for NuBar, approval by the RESI employee-owners and stockholders, clearance under applicable antitrust standards, and, after completion of the foregoing, refinancing of outside indebtedness to facilitate the Closing of the Transaction.


NOW THEREFORE IT IS AGREED that:


The parties to this Settlement Agreement shall be BarTech, RES Acquisition Corporation and the Union. This Settlement Agreement sets forth the new Master Labor Agreement ("Master Agreement") and the plant-specific agreements and will be the basis for the benefit agreements (together the "1998 BLA") to be agreed upon by BarTech, RES Acquisition Corporation, and the Union prior to obtaining the RESI Control Position. This Settlement Agreement and the 1998 BLA shall only become effective upon obtaining the RESI Control Position for the RESI Employees ( the "RESI Effective Date") and upon the earlier to occur of: (i) the Closing of the Transaction; and (ii) the date that is five (5) months after the closing of the RESI Acquisition for the BarTech Employees (the "BarTech Effective Date"). The parties enter into this Settlement Agreement as of August 2, 1998.


I. Bargaining Structure, Harmonization of Agreements, and Economics


A. Bargaining Structure/Single Agreement/Expiration Dates


1. Upon obtaining the RESI Control Position and, where applicable,
the BarTech Effective Date, RES Acquisition Corporation/NuBar and any and
all of its present and future portfolio companies, subsidiaries,
Affiliates (as defined below), and/or parent corporations (other than
Blackstone, Veritas, any other private equity fund or their respective
successor(s)-in- interest and their respective existing or future
affiliates) shall be jointly and severally obligated to the Union under a
single new 1998 BLA applicable to all USWA-represented facilities of NuBar
other than Canadian Drawn Steel which shall be covered by a separate
collective bargaining agreement which shall be coterminous with the
agreement covering the other


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plants. The 1998 BLA shall address certain subjects on a "Master
Agreement" basis and other issues on the basis of the former corporate
identity of the plants in question or a plant-specific basis (hereinafter
"Plant-Specific Agreement").


The current labor agreements (exclusive of their benefits agreements) between RESI and the Union, BarTech and the Union, and Bliss & Laughlin and the Union, (each a "Predecessor Labor Agreement" or "PLA" and collectively, "the Predecessor Labor Agreements") shall:


(i) remain in effect until the RESI Effective Date or BarTech Effective
Date, as applicable;


(ii) with respect to the BarTech and B&L PLA's continue in effect
thereafter for items to be harmonized up to and through their
complete harmonization


(iii) otherwise be replaced by the Master and Plant-Specific Agreements as
well as this Settlement Agreement.


The benefits agreements associated with the PLA's shall continue in effect until merged or harmonized together pursuant to new NuBar benefits agreements to be adopted by the parties in accordance with this Settlement Agreement and the Master and Plant-Specific Agreements.


The formerly separate bargaining units under the PLA's shall, upon the BarTech Effective Date be merged into a single bargaining unit. The termination dates previously established by the PLA's shall be amended and extended to give the 1998 BLA a termination date of October 31, 2003.


Wherever this Settlement Agreement sets forth an understanding not described as plant-specific, such understanding shall be included in the Master portions of the 1998 BLA. Any language in the Plant-Specific Agreements which conflicts with the master portion of the 1998 BLA shall displace the master provisions of the 1998 BLA.


2. In the negotiation of a successor agreement to the 1998 BLA,
bargaining shall begin with plant-level representatives negotiating
over the topics covered in their agreements on


Final Settlement Agreement August 1, 1998


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plant-specific issues. After an appropriate interval of such
bargaining, Master bargaining shall commence, and all issues still
unresolved in the plant-specific bargaining shall be referred to the
Master bargaining for resolution.


B. Harmonization and Extension of Terms and Conditions of Employment


1. B&L Harvey, Illinois Plant - The parties agree upon the
following:


(a) Harmonization Process - The parties shall negotiate to
harmonize all economic items applying to the Harvey,
Illinois plant of NuBar so as to match those items in
all material respects to those applicable to the former
RESI facilities (as amended in the 1998 BLA). With
respect to pensions, such harmonization shall take
effect on November 30, 1998. With respect to wages,
effective December 1, 1998 all hourly rates shall be
adjusted to the same hourly wage rates as the applicable
hourly wage rates for RESI Cold Rolled Bar
classifications. In recognition of the classification
rate adjustments, the Company will implement a
production based incentive plan (the "Harvey Incentive
Plan" or "HIP"). The production based incentive plan
will be designed to provide an earnings opportunity
equal to the average earnings opportunity of the RESI
Cold Rolled Bar production based incentive plans
(adjusted for straightline harmonization). Such plan
will provide an earnings opportunity (approximate
average of $2.29 per/hr) equal to the difference between
the adjusted B&L Harvey hourly classification rates and
the total (hourly rates and incentive earnings) hourly
earnings of similar classification of RESI Cold Rolled
Bar rates. At a minimum the HIP shall guarantee the
difference between the B&L Harvey classifications in
effect on


Final Settlement Agreement August 1, 1998


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November 30, 1998 and the new adjusted rates. The
guarantee and remaining earnings opportunity of the HIP
will be paid in the regular payroll periods. On November
1, 1999 and each succeeding November 1st of the BLA the
B&L Harvey classification rates will be adjusted to the
RESI Cold Rolled Bar classification rates. A mutually
acceptable reduction of job classes to five (rolling up
rates) shall be developed prior to December 1, 1998. All
other economic items shall be harmonized on a relatively
straight line basis with effective dates between
November 30, 1998, and February 28, 2003, with full
harmonization to be effective on the latter date. Once
harmonization on any item is achieved, that item shall
remain fully harmonized for the balance of the 1998 BLA.


(b) Extension Process - Representatives of the parties shall
identify local and other appropriate issues to be
resolved and to be included in this Settlement
Agreement.


2. BarTech (Johnstown and Lackawanna) - The parties agree upon
the following:


(a) Harmonization Process - effective February 28, 2001:


(i) There shall be adopted a production-based bonus
plan expected to yield at target the same payout
as the former RESI facilities' then-current
average incentive yield;


(ii) The job class of each BarTech job shall be
harmonized to the job class to which similar RESI
jobs are assigned; and


(iii) There shall be full harmonization to the RESI


Final Settlement Agreement August 1, 1998


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pension plan with full credit for BarTech service.


(iv) In accordance with the 1994 BarTech Collective
Bargaining Agreement, all hourly wage rate
increases for BarTech classifications shall be
implemented as scheduled. However, on March 1,
2001 the classification wage rates shall be
adjusted to the same hourly wage rates as the
applicable hourly wage rates for RESI Hot Rolled
Bar classifications. In recognition of the
classification rate adjustments, the Company will
implement a production based incentive plan (the
"BarTech Incentive Plan" or "BIP"). The production
based incentive plan will be designed to provide
an earnings opportunity equal to the average
earnings opportunity of the RESI Hot Rolled Bar
production based incentive plans (adjusted for
straightline harmonization). Such plan will
provide an earnings opportunity (approximate
average of $2.16 per/hr) equal to the difference
between the adjusted BarTech hourly classification
rates and the total (hourly rates and incentive
earnings) hourly earnings of similar
classifications of RESI Hot Rolled Bar rates. At a
minimum the BarTech Incentive Plan shall guarantee
the difference between the BarTech classifications
in effect on February 28, 2001 and the new
adjusted rates, plus $.25. The guarantee and
remaining earnings opportunity of the BIP will be
paid in the regular payroll periods. On November
1, 2002 the BarTech classification rates will be
adjusted to the just increased RESI Hot Rolled Bar
classification rates. The BIP will guarantee the
difference between the November 1, 2002
classification rates and the classification rates
in effect on February 28, 2001, plus $.75. The
guarantee and


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remaining earnings opportunity (at target $2.80
per/hr) of BIP will be paid in the regular payroll
periods. With respect to all other economic items
applying to the Johnstown and Lackawanna plants,
the parties shall negotiate to harmonize such
items so as to match those items in all material
respects to those applicable to the former RESI
facilities (as amended in the 1998 BLA). Such
harmonization shall be achieved on a relatively
straight line basis on effective dates between
February 28, 2001, and February 28, 2003, with
full harmonization to be effective on the latter
date. Once harmonization on any item is achieved,
that item shall remain fully harmonized for the
balance of the 1998 BLA.


(b) Extension Process - Representatives of the parties shall
identify local and other appropriate issues to be
resolved and to be included in this Settlement
Agreement. In addition, the parties have agreed that,
effective March 1, 2001, for vacation entitlement, to
credit BarTech employees with their former Bethlehem
Service, to a maximum of seventeen (17) years of former
Bethlehem service.


3. Canadian Drawn Steel - Hamilton, Ontario: The parties have
reached a Settlement Agreement for Canadian Drawn Steel. Such
Settlement Agreement includes the portions of this Settlement
Agreement which shall be applicable to Canadian Drawn Steel in
addition to the economics and terms and conditions of
employment.


C. RESI CBA Economic Modifications


1. The new 1998 BLA shall provide for the following economic
provisions applicable to former RESI Hot Rolled Bar
facilities:


Final Settlement Agreement August 1, 1998


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(a) On the RESI Effective Date: $.25 across the board in
SHWR for both non-incentive and incentive workers


(b) November 1, 1999: $.25 across the board in SHWR for both
non-incentive and incentive workers


(c) November 1, 2000: $.50 across the board in SHWR for both
non-incentive and incentive workers


(d) November 1, 2001: $.50 across the board in SHWR for
non-incentive and incentive workers


(e) November 1, 2002: $.75 across the board in SHWR for
non-incentive and incentive workers


2. The new 1998 BLA shall also provide for the following ...