EXHIBIT 10.89

SEVERANCE AGREEMENT AND GENERAL RELEASE

This Severance Agreement and General Release (the “Severance Agreement”) is
between USEC Inc., a Delaware corporation (“USEC” or the “Company”) and Lisa E.
Gordon-Hagerty (“Executive”) (USEC and Executive being sometimes referred to
herein individually as the “Party” and collectively as the “Parties”).

WHEREAS, pursuant to an employment agreement dated as of December 15, 2003 (the
“Employment Agreement”) Executive has been employed by USEC in the capacity of
Executive Vice President and Chief Operating Officer;

WHEREAS, the Company has determined to realign its operations and eliminate the
position of Executive Vice President and Chief Operating Officer, and, as a
result, Executive and the Company have agreed that Executive’s services are no
longer required by the Company; and

WHEREAS, in exchange for, among other things, Executive’s full release of claims
against the Company and the other covenants and agreements contained herein, the
Company hereby offers Executive the severance package described in this
Severance Agreement, which severance package is in addition to certain severance
and other benefits provided to Executive pursuant to the Employment Agreement in
the event of a termination of employment;

NOW THEREFORE, IT IS HEREBY AGREED by and between Executive and USEC as follows:

1. CHANGE IN EXECUTIVE’S DUTIES Notwithstanding anything to the contrary in
Section 2 of the Employment Agreement, the Parties agree that (a) Executive’s
employment shall be terminated effective as of September 30, 2005 and (b) from
September 7, 2005 until September 30, 2005, Executive’s duties shall be limited
to facilitating the transition of her duties and responsibilities and
accordingly, effective as of September 7, 2005, Executive shall no longer serve
as the Executive Vice President and Chief Operating Officer of the Company or as
an officer or director of any direct or indirect subsidiary of the Company or as
a member of any committee or other governing body of the Company or of any
direct or indirect subsidiary of the Company.

2. EXECUTIVE’S TERMINATION UNDER THE EMPLOYMENT AGREEMENT

(a) The Parties agree that, in accordance with Section 4(b) of the Employment
Agreement, as of the Date of Termination, Executive is terminated by the Company
without Cause (as such term is defined in the Employment Agreement). Executive
acknowledges and agrees that the delivery to Executive by the Company of this
Severance Agreement constitutes full and proper notice under Section 4(d) of the
Employment Agreement and hereby irrevocably waives any additional requirements
for Notice of Termination in connection with Executive’s termination without
Cause pursuant to Section 4(d) of the Employment Agreement. Notwithstanding
anything to the contrary in Section 4(e) of the Employment Agreement, the
Parties acknowledge and agree that the Executive’s “Date of Termination” for
purposes of the Employment Agreement and this Severance Agreement shall be
September 30, 2005. Executive acknowledges and agrees that the provisions of the
Employment Agreement that survive termination of employment, including but not
limited to Section 9 (relating to confidential information, non-solicitation and
non-competition), remain in full force and effect following the Date of
Termination and are not affected by this Severance Agreement.

(b) The Parties acknowledge and agree that, pursuant to the terms of
Sections 5(a)(i) and (ii) of the Employment Agreement, the Company shall pay to
Executive, within ten (10) days of the Date of Termination, a lump sum amount
equal to $1,158,336 plus any outstanding portion of Executive’s earned Annual
Base Salary through the Date of Termination and any accrued vacation pay to the
extent not previously paid, minus any federal, state and local taxes required to
be withheld pursuant to any applicable law or regulation or otherwise authorized
by Executive. Executive agrees this represents full payment of all amounts due
by the Company to Executive under Sections 5(a)(i) and (ii) of the Employment
Agreement. The Parties further acknowledge and agree that, pursuant to and in
accordance with the terms of Section 5(a)(iii) and Section 5(a)(iv) of the
Employment Agreement, the Company shall continue to provide to Executive, for
the period specified in Section 5(a)(iii) of the Employment Agreement, any life,
disability, accident and/or health insurance that she was receiving immediately
prior to the Date of Termination, and Executive’s stock options (vested or
nonvested) shall become exercisable and shall remain exercisable for one year
(but not exceeding the term of the stock options) and all restrictions
pertaining to restricted stock shall lapse on the Date of Termination.

(c) The Parties acknowledge and agree that, in accordance with Section 3(e) of
the Employment Agreement, the Company shall reimburse Executive for all
reasonable expenses incurred by Executive in the performance of her duties under
the Employment Agreement in accordance with policies applicable to employees of
the Company at the time of the expenses. The Parties agree that prior to the
Date of Termination, Executive shall submit any unsubmitted expenses for which
Executive is entitled to reimbursement in accordance with the Company’s policies
and the Company shall make payment to Executive for such expenses within ten
(10) days of the Date of Termination. Notwithstanding the foregoing, the Company
agrees that within thirty (30) days of submission of appropriate documentation,
and consistent with the Company’s policies for travel expense reimbursement, it
shall also reimburse Executive for reasonable expenses incurred by Executive in
attending Fortune magazine’s “Most Powerful Women Summit” in Pasadena,
California on November 7-9, 2005; it being understood and agreed that Executive
shall not be participating in such conference on behalf of the Company and shall
not hold herself out as a representative or agent of the Company.

3. ADDITONAL SEVERANCE BENEFITS.

(a) In addition to the benefits provided under the Employment Agreement and in
full consideration of Executive’s execution of this Severance Agreement, and
Executive’s agreement to be legally bound by its terms, the Company agrees:

(i) to provide Executive with up to six (6) months of outplacement counseling
and services through a provider retained by the Company or a provider selected
by Executive, provided that the cost, which shall be paid monthly, shall not
exceed $15,000 in the aggregate, and in no event will the Company be obligated
to provide cash in lieu of any outplacement services;

(ii) to pay the Executive’s share of costs to continue Executive’s life,
disability, accident and health insurance benefits provided under
Section 5(a)(iii) of the Employment Agreement for the period of time for which
such benefits are provided pursuant to Section 5(a)(iii) of the Employment
Agreement; and
(iii) to pay to Executive the RSU Payment described in Section 3(b) below on the
date that payment is due with respect to restricted stock units granted to
officers of the Company under the USEC Inc. 1999 Equity Incentive Plan, as
amended, with respect to the performance period commencing on July 1, 2004 and
ending on June 30, 2007 (the “2004-2007 Performance Period”) (which date of
payment shall be promptly following the date on which the Company’s Compensation
Committee shall have certified the extent to which the applicable performance
goals have been obtained following the end of the 2004-2007 Period).

(b) The “RSU Payment” shall be an amount equal to (a) the amount payable at such
time with respect to a target number of 62,288 restricted stock units multiplied
by the “Performance Adjustment” determined by the Compensation Committee in its
sole discretion at the end of the 2004-2007 Period based on the Compensation
Committee’s determination of the extent to which the applicable performance
goals have been obtained (which Performance Adjustment shall be between 0% and
150%), multiplied by (b) a fraction, the numerator of which is the number of
days from and including July 1, 2004 through the Date of Termination and the
denominator of which is 1096. Notwithstanding the foregoing, the Parties
acknowledge and agree that the RSU Payment shall be subject to the terms of the
USEC Inc. 1999 Equity Incentive Plan, as may be amended and/or restated from
time to time by the Company.

(c) Executive acknowledges and agrees that the Additional Severance Benefits
provided in Section 3(a) constitute consideration that, but for the mutual
covenants set forth in this Severance Agreement, the Company otherwise would not
be obligated to provide to Executive and that, except for the payments and
benefits described in Sections 2 and 3 of this Severance Agreement, the Company
is under no obligation whatsoever to provide any other benefits or to make any
other severance payment to Executive pursuant to the Employment Agreement or
otherwise.

4. GENERAL RELEASE. Executive, for and in consideration of the undertakings of
the Company set forth herein, and intending to be legally bound, does hereby
remise, release, and forever discharge USEC and its subsidiaries, affiliates,
and their officers, directors, shareholders, executives and agents, their
respective successors and assigns, heirs, executors, and administrators (herein
referred to collectively as “Releasees”) of and from any and all actions and
causes of actions, suits, debts, claims and demands whatsoever in law or in
equity, which Executive ever had, now has, or which Executive or Executive’s
heirs, executors or administrators may have, by reason of any matter, cause or
thing whatsoever, from the beginning of Executive’s employment with USEC up to
and including the date of this Severance Agreement, and particularly, but
without limitation, any claims arising from or relating in any way to the
Employment Agreement, Executive’s employment relationship or the termination of
Executive’s employment relationship with USEC, including, but not limited to,
any claims which have been asserted, could have been asserted or could be
asserted now or in the future, including any claims under any federal, state or
local laws, including, but not limited to, the United States Constitution, the
Maryland Constitution, Title VII of the Civil Rights Act of 1964, as amended,
the Age Discrimination in Employment Act of 1967, as amended, the Americans with
Disabilities Act of 1990, as amended, the Fair Labor Standards Act, as amended,
the Family and Medical Leave Act of 1993, as amended, the National Labor
Relations Act, as amended, the Labor-Management Relations Act, as amended, the
Workers Retraining and Notification Act of 1988, as amended, the Rehabilitation
Act of 1973, as amended, the Executive Retirement Income Security Act of 1974,
as amended, Section 211 of the Energy Reorganization Act of 1974, as amended,
the Maryland Human Rights Act, as amended or any other federal or state law or
regulation.

5. NO DISPARAGEMENTS. Executive agrees that, subject to the provisions of
Section 9 below, Executive shall not make any oral or written, public or private
statements that are disparaging of the Company, its parents, subsidiaries or
affiliates, or any of their respective present or former officers, directors,
agents, employees, successors or assigns. The Company agrees that, subject to
compliance with applicable law and regulations, it will instruct its executive
officers and members of its Board of Directors not to make any oral or written,
public or private statements that are disparaging of Executive or Executive’s
work for the Company, its parents, subsidiaries or affiliates.

6. RETURN OF COMPANY’S DOCUMENTS AND PROPERTY. Executive agrees to return, on or
before the Date of Termination, and at Executive’s expense, all originals and
copies of records, documents, proposals, notes, lists, files and any and all
other materials, including, without limitation, computerized and/or electronic
information, that refer, relate or otherwise pertain to the Company, or any and
all of the Company’s parents, subsidiaries or affiliates, or any of their
respective officers, directors, shareholders, agents, Executives, and successors
or assigns, and any and all business dealings of said persons and entities
(“Company Documents”). In addition, Executive shall return to the Company all
Company property or equipment that Executive has been issued during the course
of Executive’s employment or which Executive otherwise currently possesses.
Executive is not authorized to retain any Company Documents or Company property
or equipment.

7. PERMANENT SEPARATION. Executive hereby recognizes and agrees that Executive’s
employment relationship with Releasees has been permanently and irrevocably
severed as of the Date of Termination and that Releasees have no obligation,
contractual or otherwise, to hire, rehire or re-employ Executive in the future.

8. NON-ADMISSION OF LIABILITY. Nothing in this Severance Agreement shall be
construed as an admission of liability or violation of federal, state or local
statute or regulation, or of any duty owed by Executive or the Releasees;
rather, Executive and the Releasees are resolving all matters arising out of
their employer-Executive relationship and/or any other relationship between
Executive and the Releasees, as to each of which each of the Releasees and
Executive deny any liability.

9. NUCLEAR, WORKPLACE, PUBLIC SAFETY AND SARBANES-OXLEY CONCERNS. Executive
understands and acknowledges that nothing in this Severance Agreement prohibits,
penalizes, or otherwise discourages Executive from reporting, providing
testimony regarding, or otherwise communicating any nuclear safety concern,
workplace safety concern, public safety concern, or concern of any sort, to the
U.S. Nuclear Regulatory Commission, the U.S. Department of Labor, or any federal
or state government agency. Executive further understands and acknowledges that
nothing in the provisions of this Severance Agreement conditions or restricts
Executive’s communication with, or full cooperation in proceedings or
investigations by, any federal or state agency. Executive also understands and
acknowledges that nothing in this Severance Agreement shall be construed to
prohibit him from engaging in any activity protected by the Sarbanes-Oxley Act,
18 U.S.C. § 1514A or Section 211 of the Energy Reorganization Act of 1974, as
amended.

10. REVIEW AND REVOCATION PERIOD.

(a) Executive hereby certifies that Executive has read the terms of this
Severance Agreement, that Executive has been informed by the Company that
Executive should discuss this Severance Agreement with an attorney of
Executive’s own choice, that Executive in fact has consulted with her attorney
on this matter, and that Executive understands its terms and effects. Executive
further certifies that Executive has the intention of releasing all claims
recited herein in exchange for the consideration described herein, which
Executive acknowledges as adequate and satisfactory to Executive.

(b) Executive hereby certifies that Executive is signing and entering into this
Severance Agreement as a free and voluntary act without duress or undue pressure
or influence of any kind or nature whatsoever and has not relied on any
promises, representations or warranties regarding the subject matter hereof
other than as set forth in this Severance Agreement.

(c) Executive acknowledges that Executive has been given the right to consider
this Severance Agreement for a period of at least forty-five (45) days prior to
entering into the Severance Agreement. Executive further understands that
Executive may take as much of this 45-day period of time to consider this
Severance Agreement as Executive wishes before signing this Severance Agreement,
and Executive expressly acknowledges that Executive has taken sufficient time to
consider this Severance Agreement before signing it.

(d) Executive further acknowledges that Executive has the right to revoke this
Severance Agreement within seven (7) days of its execution by giving written
notice of such revocation by hand delivery or fax to the Company, Attention
Richard Rowland (fax no. 301-564-3203). This Severance Agreement will not become
effective or binding on the parties until the eighth (8th) day after it is
signed by Executive. Executive understands that if Executive revokes the
Severance Agreement under this paragraph, this Severance Agreement will become
null and void and Executive will not be entitled to any additional benefits
conferred by this Severance Agreement including the payments and benefits set
forth in Section 3.

(e) Executive acknowledges that Executive has been previously informed in
writing by the Company of the criteria for eligibility for the separation
benefits for which Executive is eligible, and which Executive will receive as a
result of entering into this Severance Agreement. Executive certifies that she
has been informed that in order to be eligible for such separation benefits,
individuals must have been separated by the Company in connection with the
September, 2005 reduction-in-force. Executive certifies that the Company has
provided her in writing, information concerning (i) the group of individuals
covered by this employment termination program by job title, and (ii) the job
titles and ages of individuals selected for the program and of individuals who
were not selected for the program.

11. SEVERABILITY. While the provisions contained in this Severance Agreement are
considered by the Parties to be reasonable in all circumstances, it is
recognized that some provisions may fail for technical reasons. Accordingly, it
is hereby agreed and declared that if one or more of such provisions shall,
either by itself or themselves or taken with others, be adjudged to be invalid
as exceeding what is reasonable in all circumstance for the protection of the
interests of the Company, but would be valid if any particular restrictions or
provisions were deleted or restricted or limited in a particular manner, then
the said provisions shall apply with any such deletions, restrictions,
limitations, reductions, curtailments, or modifications as may be necessary to
make them valid and effective and the remaining provisions shall be unaffected
thereby.

12. EMPLOYMENT AGREEMENT; ENTIRE AGREEMENT; MODIFICATION. Except as specifically
provided in this Severance Agreement, the terms and conditions of the Employment
Agreement shall remain unchanged. In the event of a conflict, the terms and
conditions of this Severance Agreement shall govern. This Severance Agreement
constitutes the entire understanding of the Parties regarding the subject matter
hereof and may not be modified without the express written consent of the
Parties. This Severance Agreement supersedes all prior written and/or oral and
all contemporaneous written and/or oral agreements, understandings and
negotiations regarding the subject matter hereof.

13. SEC REPORTING REQUIREMENTS. Executive agrees that Executive will comply with
all reporting requirements under Section 16 of the Securities Exchange Act of
1934, as amended, applicable to a former Section 16 reporting officer.

14. GOVERNING LAW; CONSENT TO JURISDICTION. This Severance Agreement and any
disputes arising there from shall be governed by the laws of the State of
Maryland and
Executive hereby agrees to submit to the jurisdiction of the courts of the State
of Maryland for any claims arising under this Severance Agreement.

PLEASE READ CAREFULLY. THIS SEVERANCE AGREEMENT CONTAINS A RELEASE OF ALL KNOWN
AND UNKNOWN CLAIMS.

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IN WITNESS WHEREOF, and intending to be legally bound hereby, the Parties have
executed and delivered the foregoing Severance Agreement and General Release
this 12th day of September, 2005.

     
USEC Inc.
  EXECUTIVE:
 
   
By: /s/ Lance Wright
  /s/ Lisa E. Gordon-Hagerty
 
   
Title: SVP, Human Resources &
Administration
  Lisa E. Gordon-Hagerty

 
   
Date: September 12, 2005
  Date: September 12, 2005
 
   

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