EXHIBIT 10.37
CHANGE IN CONTROL AGREEMENT
     AGREEMENT (this “Agreement”) by and between USEC Inc., a Delaware
corporation (the “Company”) and                      (the “Executive”) dated and
effective as of                     , ___.
     WHEREAS, the Executive is currently an employee of the Company;
     WHEREAS, the Board of Directors of the Company has determined that it is
essential to the best interests of the Company and its shareholders to foster
the continued employment of the Executive, notwithstanding the possibility,
threat or occurrence of a Change in Control (as defined in Section 1 hereof) of
the Company;
     WHEREAS, the Board of Directors of the Company has determined that
appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of the Executive in the Executive’s assigned duties
without distraction in the face of potentially disturbing circumstances arising
from any possible Change in Control of the Company; and
     WHEREAS, the Board of Directors of the Company has concluded that the
interests of the Company described above can be best satisfied by agreeing to
make certain payments to the Executive if the Executive’s employment is
terminated during a protected period prior to or following a Change in Control;
     NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms shall have the
meanings set forth below:
     “Affiliate” shall mean (i) any entity that, directly or indirectly, is
controlled by the Company, (ii) any entity in which the Company has a
significant equity interest and (iii) an affiliate of the Company, as defined in
Rule 12b-2 promulgated under Section 12 of the Exchange Act, in each case as
determined by the Committee.
     “Board” shall mean the Board of Directors of the Company or, in the case of
any subsidiary of the Company, the board of directors, board of control, board
of managers or other governing body of such subsidiary.
     “Cause” shall mean any of the following:
     (i) the engaging by the Executive in willful misconduct that is injurious
to the Company or its Affiliates;
     (ii) the embezzlement or misappropriation of funds or material property of
the Company or its Affiliates by the Executive, or the conviction of the
Executive of a felony or the entrance of a plea of guilty or nolo contendere by
the Executive to a felony; or

 

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     (iii) the willful failure or refusal by the Executive to substantially
perform his or her duties or responsibilities that continues after demand for
substantial performance is delivered by the Company to the Executive that
specifically identifies the manner in which the Company believes the Executive
has not substantially performed his or her duties (other than (a) any such
failure resulting from the Executive’s incapacity due to Disability, or (b) any
such actual or anticipated failure after the issuance of a Notice of Termination
by the Executive for Good Reason).
For purposes of this definition, no act, or failure to act, on the Executive’s
part shall be considered “willful” unless done, or omitted to be done, by him or
her not in good faith and without reasonable belief that his or her action or
omission was in the best interest of the Company. Notwithstanding the foregoing,
the Executive’s employment shall not be deemed to have been terminated for Cause
unless (A) a reasonable notice shall have been given to him or her setting forth
in reasonable detail the reasons for the Company’s intentions to terminate for
Cause, and if such termination is pursuant to clause (i) or (iii) above and the
damage to the Company or its Affiliates is curable, only if the Executive has
been provided a period of ten business days from receipt of such notice to cease
the actions or inactions, and he or she has not done so; (B) an opportunity
shall have been provided for the Executive together with his or her counsel, to
be heard before the Board of Directors of the Company; and (C) if such
termination is pursuant to clause (i) or (iii) above, delivery shall have been
made to the Executive of a Notice of Termination from the Board of Directors of
the Company finding that in the good faith opinion of a majority of the
non-management members of the Board of Directors of the Company he or she was
guilty of conduct set forth in clause (i) or (iii) above, and specifying the
particulars thereof in reasonable detail. Any determination of Cause made by the
Company in accordance with the foregoing procedure shall be made by the Company,
in its sole discretion. Any such determination shall be final and binding on the
Executive.
     “Change in Control” shall mean the following and shall be deemed to have
occurred if any of the following events shall have occurred:
     (i) any “Person,” as such term is used in Sections 13(d) and 14(d) of the
Exchange Act or Persons acting as a group (other than (A) the Company, (B) any
trustee or other fiduciary holding securities under an employee benefit plan of
the Company, and (C) any corporation owned, directly or indirectly, by the
shareholders of the Company in substantially the same proportions as their
ownership of Shares), is or becomes the “beneficial owner” (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company by reason of having acquired such securities during the 12-month period
ending on the date of the most recent acquisition (not including any securities
acquired directly from the Company or its Affiliates) representing thirty
percent (30%) or more of the total voting power of the Company’s then
outstanding voting securities;
     (ii) the majority of members of the Company’s Board is replaced during any
12-month period by directors whose appointment or election is not endorsed by a
majority of the members of the Company’s Board before the date of the
appointment;

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     (iii) there is consummated a merger or consolidation of the Company or any
subsidiary of the Company with any other corporation or other entity, resulting
in a change described in clauses (i), (ii), (iv), (v), or (vi) of this
definition, other than (A) a merger or consolidation that would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving or parent entity) more than sixty
percent (60%) of the total voting power of the voting securities of the Company
or such surviving or parent entity outstanding immediately after such merger or
consolidation or (B) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no Person,
directly or indirectly, acquired forty percent (40%) or more of the total voting
power of the Company’s then outstanding securities (not including any securities
acquired directly from the Company or its Affiliates);
     (iv) a liquidation of the Company involving the sale to any Person or
Persons acting as a group of at least forty percent (40%) of the total gross
fair market value of all of the assets of the Company immediately before the
liquidation;
     (v) the sale or disposition by the Company or any direct or indirect
subsidiary of the Company to any Person or Persons acting as a group (other than
any subsidiary of the Company) of assets that have a total fair market value
equal to forty percent (40%) or more of the total gross fair market value of all
of the assets of the Company and its subsidiaries (taken as a whole) immediately
before such sale or disposition (or any transaction or related series of
transactions having a similar effect), other than a sale or disposition by the
Company or any direct or indirect subsidiary of the Company to an entity, at
least sixty percent (60%) of the total voting power of the voting securities of
which is beneficially owned by shareholders of the Company in substantially the
same proportions as their beneficial ownership of the Company immediately prior
to such sale;
     (vi) the sale or disposition by the Company or any direct or indirect
subsidiary of the Company to any Person or Persons acting as a group (other than
any subsidiary of the Company) of a subsidiary or subsidiaries of the Company
credited under GAAP with forty percent (40%) or more of the total revenues of
the Company and its subsidiaries (taken as a whole) in the current fiscal year
or in any of the two most recently completed fiscal years (or any transaction or
related series of transactions having a similar effect), other than a sale or
disposition by the Company or any direct or indirect subsidiary of the Company
to an entity, at least sixty percent (60%) of the total voting power of the
voting securities of which is beneficially owned by shareholders of the Company
in substantially the same proportions as their beneficial ownership of the
Company immediately prior to such sale; or

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     (vii) a change of the kind described in clauses (i), (ii), (iii), or
(iv) of this definition with respect to any Material Subsidiary (with such
determination made by replacing “Company” with “Material Subsidiary” in each
instance in such clauses); provided, however, that for purposes of applying this
provision to clause (i) of this definition, a “Change in Control” shall not be
deemed to occur solely as a result of a Person or Persons acting as a group
becoming the beneficial owner (as determined under clause (i) of this
definition) of less than fifty percent (50%) of the ownership interests of a
Material Subsidiary, but shall be deemed to occur if such Person or Persons
acting as a group thereafter become the beneficial owner (as determined under
clause (i) of this definition) of fifty percent (50%) or more of the ownership
interests of such Material Subsidiary.
     “Code” shall mean the Internal Revenue Code of 1986, as amended.
     “Committee” shall mean the Compensation Committee of the Company’s Board of
Directors.
     “Disability” shall mean that the Executive has become totally and
permanently disabled as defined or described in the Company’s long term
disability benefit plan applicable to executive officers as in effect at the
time the Executive’s disability is incurred.
     “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
     “Good Reason” shall mean, without the Executive’s express written consent,
any of the following, unless such act or failure to act is corrected prior to
the Date of Termination specified in the Notice of Termination given in respect
thereof:
     (i) the Executive is removed from the Executive’s position (with the
Company or any Material Subsidiary) as in effect immediately prior to the start
of the Protected Period for any reason other than (A) by reason of death,
Disability or Retirement or (B) for Cause; provided that such action results in
a material diminution of Executive’s authority, duties or responsibilities with
the Company and its subsidiaries, taken as a whole;
     (ii) the Executive is assigned any duties inconsistent in a material
respect with the Executive’s position (including status, offices, and reporting
relationships with the Company or any Material Subsidiary), authority, duties or
responsibilities as in effect immediately prior to the start of the Protected
Period (or thereafter if increased) if such assignment results in a material
diminution of such Executive’s authority, duties or responsibilities with the
Company and its subsidiaries, taken as a whole;
     (iii) the Company materially breaches the agreement under which the
Executive provides services;
     (iv) the Executive’s annual base salary or annual bonus opportunity
(determined on an aggregate basis for the Company and its subsidiaries) as in
effect immediately prior to the start of the Protected Period (or thereafter if
higher) is materially reduced (except for across-the-board reductions similarly
affecting all senior executives of the Company and of any Material Subsidiary
and all senior executives of any Person in control of the Company);
     (v) the failure of the Company to obtain an agreement that materially
satisfies Section 9 hereof;

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     (vi) any relocation of the Executive’s principal place of business from its
location as of the date immediately preceding the start of the Protected Period,
by more than fifty (50) miles; or
     (vii) any purported termination of the Executive’s employment that is not
effected pursuant to a Notice of Termination satisfying the requirements of
Section 3(b) hereof, which termination for purposes of this Agreement shall be
ineffective.
Notwithstanding the foregoing, a termination shall not be treated as a
termination for Good Reason unless the Executive shall have delivered a Notice
of Termination stating that the Executive intends to terminate employment for
Good Reason within ninety (90) days, and such Termination must occur within two
years, of the Executive’s having actual knowledge of the initial occurrence of
one or more of such events, provided, in each such event, the Company fails to
cure within thirty (30) days of receipt of such Notice of Termination. For
purposes of this Agreement, any good faith determination of “Good Reason” or
good faith determination of the Company’s failure to cure within the thirty
(30) day period made by the Executive shall be conclusive.
     “Material Subsidiary” shall mean any subsidiary of the Company (a) whose
total assets represent forty percent (40%) or more of the total gross fair
market value of all of the assets of the Company and its subsidiaries (taken as
a whole) at any time in the current fiscal year or in any of the two most
recently completed fiscal years or (b) credited under GAAP with forty percent
(40%) or more of the total revenues of the Company and its subsidiaries (taken
as a whole) in the current fiscal year or in any of the two most recently
completed fiscal years.
     “Protected Period” shall mean the period that begins upon the earlier of
(i) three months before the date of any (and each) Change in Control or (ii) the
date the Company or any Material Subsidiary enters into a binding agreement with
respect to a Change in Control (subject to customary closing conditions), and
ends three years after the date of such Change in Control.
     “Retirement” shall mean the Executive’s Separation from Service initiated
by the Executive after attainment by the Executive of age sixty-five (65).
     “Section 409A Penalties” shall have the meaning set forth in Section 14 of
this Agreement.
     “Specified Employee” shall mean any person described in
Section 409A(a)(2)(B)(i) of the Code and Treasury Regulation Section 1.409A-1(i)
as determined from time to time by the Committee in its discretion.
     “Shares” shall mean shares of common stock, $0.10 par value, of the
Company, or such other securities of the Company as may be designated by the
Committee from time to time.

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     “subsidiary” shall mean, with respect to any Person (the “parent”) at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent’s consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than fifty percent (50%) of the equity or more than fifty percent (50%) of the
ordinary voting power or, in the case of a partnership, more than fifty percent
(50%) of the general partnership interests are, as of such date, or were, prior
to a Change of Control, owned, controlled or held, or (b) that is, or was prior
to a Change of Control, otherwise Controlled, by the parent or one or more
subsidiaries of the parent or by the parent and one or more subsidiaries of the
parent. For purposes of this paragraph, “Controlled” shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of a Person, whether through the ability to exercise
voting power, by contract, or otherwise.
     “Termination of Employment” shall mean and be interpreted in a manner
consistent with the definition of “separation from service” within the meaning
of Section 409A(a)(2)(A)(i) of the Code and Treasury
Regulation Section 1.409A-1(h). The Company retains the right and discretion to
specify, and may specify, whether a Termination of Employment occurs for
individuals providing services to the Company immediately prior to an asset
purchase transaction in which the Company is the seller, who provide services to
a buyer after and in connection with such asset purchase transaction; provided,
such specification is made in accordance with the requirements of Treasury
Regulation Section 1.409A-1(h)(4).
2. Term of Agreement. The term of this Agreement will commence as of the date
hereof (the “Effective Date”) and shall continue in effect until the third
anniversary of the Effective Date, unless further extended or sooner terminated
as hereinafter provided. Commencing on the first anniversary of the Effective
Date, and on each anniversary of such date thereafter (each, an “Anniversary
Date”), the term shall automatically be extended for one additional year unless
the Board of Directors of the Company gives notice to the Executive, at least
two months prior to such Anniversary Date, that it does not wish to extend the
term. Notwithstanding the foregoing, upon the occurrence of a Change in Control
during the term of this Agreement, this Agreement shall continue in effect for a
period of three years from the date of such Change in Control, unless sooner
terminated as hereinafter provided.
3. Termination During a Protected Period.
     (a) Upon a Termination of Employment during any Protected Period by the
Company without Cause, or by the Executive for Good Reason, the Executive shall
be entitled to the benefits provided in Section 4 hereof.
     (b) Notice of Termination. Following a Change in Control (and prior thereto
if reasonably anticipated to be within a Protected Period), any purported
Termination of Employment by the Company or by the Executive shall be
communicated by written Notice of Termination to the other party hereto in
accordance with Section 10 hereof. For purposes of this Agreement, a “Notice of
Termination” shall mean a notice which shall indicate the specific termination
provision in this Agreement relied upon, shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of the
Executive’s employment under the provision so indicated, and shall specify the
Date of Termination. The failure by the Executive or the Company to set forth in
the Notice of Termination any fact or circumstance that contributes to a showing
of Good Reason or Cause shall not waive any right of the Executive or the
Company under this Agreement or preclude the Executive or the Company from
asserting such fact or circumstance in enforcing the Executive’s or the
Company’s rights under this Agreement.

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     (c) Date of Termination. Following a Change in Control (and prior thereto
if reasonably anticipated to be within a Protected Period), “Date of
Termination” shall mean the date within the term of the Agreement specified in
the Notice of Termination, which shall not be less than thirty (30) nor more
than sixty (60) days from the date such Notice of Termination is given (except
for a termination pursuant to paragraph (v) of the definition of Good Reason, in
which event the date upon which any succession referred to therein becomes
effective shall be deemed the Date of Termination, or a Termination of
Employment by the Company for Cause, in which event the date such notice is
received shall be the Date of Termination).
4. Compensation upon Termination without Cause or for Good Reason. Upon any
Termination of Employment of the Executive by the Company without Cause (other
than because of death, Disability or Retirement), or any Termination of
Employment by the Executive for Good Reason, in any case, during any Protected
Period, in lieu of any severance benefits Executive would otherwise be eligible
to receive under any employment agreement with the Company or any subsidiary or
under the Company’s or any subsidiary’s severance plan, if any, as in effect
immediately prior to the earlier of the Change in Control or the Executive’s
Termination of Employment, the Executive shall be entitled to the following
benefits and payments:
     (a) A cash lump sum payment (payable within ten days of the Date of
Termination) of full base salary through the Date of Termination at the rate in
effect at the time the Notice of Termination is given or, if higher, at the rate
in effect immediately prior to the reduction giving rise (pursuant to clause
(iv) of the definition of Good Reason) to such termination, plus all other
amounts to which the Executive is entitled under any compensation or benefit
plan of the Company or any subsidiary at the time such payments are due under
the terms of such plans;
     (b) A cash lump sum payment (payable within ten (10) days of the Date of
Termination) equal to two and one-half (2 1/2) times the sum of the Final Salary
and the Final Average Bonus. “Final Salary” means the Executive’s annual base
salary as in effect on the Date of Termination or, if higher, the Executive’s
annual base salary in effect immediately prior to the reduction giving rise
(pursuant to clause (iv) of the definition of Good Reason) to such termination.
“Final Average Bonus” means the average of the three most recent annual bonuses
paid to Executive prior to the Date of Termination, whether such annual bonuses
are paid in the form of cash or in grants of restricted common stock of the
Company or restricted stock units under the USEC Inc. Annual Incentive Program
(which, under the USEC Inc. Annual Incentive Program, generally vests one (1)
year after the date of grant); provided, however, that (i) any annual bonus paid
to Executive that was pro-rated or otherwise adjusted because Executive was not
employed by the Company or any subsidiary during the entire period to which such
bonus related shall be annualized for purposes of the calculation of the
Executive’s Final Average Bonus; (ii) if Executive has experienced a change in
position that has increased Executive’s annual bonus opportunity (whether or not
such change in position is accompanied by a change in title), any annual bonus
paid to Executive with respect to a period prior to such change in position
shall not be included in the calculation of the Executive’s Final Average Bonus;
(iii) if Executive shall not have been paid at least three annual bonuses prior
to the Date of Termination that are includable in the calculation of Executive’s
Final Average Bonus, then Executive’s Final Average Bonus shall be an amount
equal to the average of such lesser number of annual bonuses (or, if just one
annual bonus, an amount equal to such bonus); and (iv) if Executive shall not
have been paid at least one annual bonus prior to the Date of Termination that
is includable in the calculation of Executive’s Final Average Bonus, Executive’s
Final Average Bonus shall be an amount equal to Executive’s annual target bonus
as in effect on the Date of Termination or, if higher, the Executive’s annual
target bonus in effect immediately prior to the reduction giving rise (pursuant
to clause (iv) of the definition of Good Reason) to such termination. Final
Average Bonus shall not include any amount of cash or equity paid or granted as
part of any long term incentive plan or program that the Company in its sole
discretion may elect to maintain from time to time;

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     (c) Subject to the Executive’s continued compliance with Section 7 hereof
and the limitation in Section 12, life, accident and health insurance benefits
substantially similar to those that the Executive was receiving immediately
prior to the Change in Control (or thereafter, if higher) until the earlier to
occur of (i) the 30 month anniversary of the Date of Termination or (ii) such
time as the Executive is covered by comparable programs of a subsequent
employer.
     (d) In addition to all other amounts payable under this Section 4, the
Executive shall be entitled to receive all benefits payable under any other plan
or agreement relating to retirement benefits (including plans or agreements of
any successor following a Change in Control) in accordance with the terms of
such plan or agreement; provided that, to the extent permitted by applicable
law, the Executive shall be credited under such plans or agreements (including
plans and agreements of any successor) with two and one-half years of additional
service with the Company after the Date of Termination for all purposes,
including vesting, eligibility and benefit accrual; provided that if the benefit
attributable to such service cannot be provided or paid from a tax-qualified
plan of the Company, such benefit shall be paid to Executive in a cash lump sum
(payable within ten days of the Date of Termination); provided that in no event
shall such benefit be duplicated under two or more arrangements.
     (e) Executive’s entitlement to benefits or payments payable under this
Section 4 is subject to the Executive’s compliance with Section 7 of this
Agreement and subject to the execution and delivery by Executive of a valid and
unrevoked Waiver and Release Agreement as required by Section 20.
5. Full Settlement; Mitigation. The Company’s obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action that the Company may have against the
Executive or others. The Executive shall not be required to mitigate the amount
of any payment or benefit provided for in Section 4 hereof by seeking other
employment or otherwise, nor (except as specifically provided in Section 4
hereof) shall the amount of any payment or benefit provided for in Section 4
hereof be reduced by any compensation earned by the Executive as the result of
employment by another employer or by retirement benefits after the Date of
Termination, or otherwise.

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6. Certain Tax Consequences. Whether or not the Executive becomes entitled to
the payments and benefits described in Section 4 hereof, if any of the payments
or benefits received or to be received by the Executive in connection with a
change in ownership or control of the Company (as defined in section 280G of the
Code (a “Statutory Change in Control”)) or the Executive’s Termination of
Employment (whether pursuant to the terms of this Agreement or any other plan,
arrangement or agreement with the Company, any person whose actions result in a
Statutory Change in Control or any person affiliated with the Company or such
person) (collectively, the “Severance Benefits”) will be subject to any excise
tax (the “Excise Tax”) imposed under section 4999 of the Code, then, subject to
Section 6(c), the Company shall pay to the Executive an additional amount equal
to the Excise Tax (the “Excise Tax Payment”).
     For purposes of determining whether any of the Severance Benefits will be
subject to the Excise Tax and the amount of such Excise Tax:
     (a) all of the Severance Benefits shall be treated as “parachute payments”
within the meaning of Code section 280G(b)(2), and all “excess parachute
payments” within the meaning of Code section 280G(b)(1) shall be treated as
subject to the Excise Tax, unless, in the opinion of tax counsel selected by the
Company’s independent auditors and reasonably acceptable to the Executive, such
other payments or benefits (in whole or in part) do not constitute parachute
payments, including by reason of Code section 280G(b)(4)(A), or such excess
parachute payments (in whole or in part) represent reasonable compensation for
services actually rendered, within the meaning of Code section 280G(b)(4)(B), in
excess of the “Base Amount” as defined in Code section 280G(b)(3) allocable to
such reasonable compensation, or are otherwise not subject to the Excise Tax;
and
     (b) the value of any non-cash benefits or any deferred payment or benefit
shall be determined by the Company’s independent auditors in accordance with the
principles of Code section 280G(d)(3) and (4).
     In the event that the Excise Tax is subsequently determined to be less than
the amount taken into account hereunder at the time of Termination of Employment
of the Executive, the Executive shall repay to the Company, at the time that the
amount of such reduction in Excise Tax is finally determined (the “Reduced
Excise Tax”), the difference of the Excise Tax Payment and the Reduced Excise
Tax. In the event that the Excise Tax is determined to exceed the amount taken
into account hereunder at the time of the Termination of Employment of the
Executive (including by reason of any payment the existence or amount of which
could not be determined at the time of the Excise Tax Payment), the Company
shall make an additional Excise Tax payment in respect of such excess (plus any
interest or penalties payable by the Executive with respect to such excess) at
the time that the amount of such excess is finally determined. The Executive and
the Company shall each reasonably cooperate with the other in connection with
any administrative or judicial proceedings concerning the existence or amount of
liability for Excise Tax with respect to the Severance Benefits.
     (c) Notwithstanding any contrary provision of this Agreement, the Severance
Benefits shall be reduced to the extent necessary so that no portion of such
Severance Benefits shall be subject to the Excise Taxes, but only if the sum of
(A) the net amount of such Severance Benefits, without reduction (but after
imposition of the total amount of taxes under federal, state and local law) plus
(B) the amount of the Excise Tax Payment in respect of such excess plus any
interest or penalties payable by the Executive with respect to such excess (but
after imposition of the total amount of taxes under federal, state and local law
applicable to such additional payment) exceeds the net amount of such Severance
Benefits, as so reduced (and after the imposition of the total amount of taxes
under federal, state and local law on such amounts or benefits). Any reduction
pursuant to this paragraph shall be made by agreement of the parties first from
payments and benefits that are exempt from Code Section 409A, and only
thereafter from benefits that are subject to Code Section 409A.

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7. Confidential Information; Non-Solicitation; Non-Competition. The Executive
shall hold in a fiduciary capacity for the benefit of the Company all secret,
proprietary, or confidential materials, knowledge, data or any other information
relating to the Company or any of its Affiliates, and their respective
businesses (“Confidential Information”), which shall have been obtained by the
Executive during the Executive’s employment by the Company or any of its
Affiliates and that shall not have been or now or hereafter have become public
knowledge (other than by acts by the Executive or representatives of the
Executive in violation of this Agreement). During the term of this Agreement and
(a) for a period of five years thereafter with respect to Confidential
Information that does not include trade secrets, and (b) any time thereafter
with respect to Confidential Information that does include trade secrets, the
Executive shall not, without the prior written consent of the Company or as may
otherwise be required by law or legal process, communicate or divulge any
Confidential Information to anyone other than the Company and those designated
by it.
     In addition, the Executive shall not, at any time during the term of this
Agreement and for a period of two and one-half years thereafter (the
“Restriction Period”), (a) engage or become interested as an owner (other than
as an owner of less than five percent (5%) of the stock of a publicly owned
company), stockholder, partner, director, officer, employee (in an executive
capacity), consultant or otherwise in any business that is competitive with the
uranium enrichment business conducted by the Company or any of its Affiliates
during the term of this Agreement or as of the Date of Termination, as
applicable, (b) engage in any activity in competition with or against the
uranium enrichment business conducted by the Company or any of its Affiliates
during the term of this Agreement or as of the Date of Termination, as
applicable, or (c) recruit, solicit for employment, hire or engage any employee
or consultant of the Company or any of its Affiliates or any person who was an
employee or consultant of the Company or any of its Affiliates within two
(2) years prior to the Date of Termination. For purposes of this Section 7, a
business that is competitive with the uranium enrichment business conducted by
the Company or any of its Affiliates shall include, but not be limited to,
Louisiana Energy Services Inc. (LES), AREVA SA, AREVA, Inc., Urenco Ltd.,
Urenco, Inc., Cogema, Enrichment Technology Company Limited, TENEX, GLE (Global
Laser Enrichment), Cameco, and any subsidiary or affiliates thereof engaged in a
business that is competitive with the uranium enrichment business conducted by
the Company or any of its Affiliates, and any contractor or subcontractor to any
of these businesses (with respect to activities by such contractor or
subcontractor that are competitive with the uranium enrichment business
conducted by the Company or any of its Affiliates). The Executive acknowledges
that these provisions are necessary for the Company’s protection and are not
unreasonable, since he would be able to obtain employment with companies whose
businesses are not competitive with the uranium enrichment business of the
Company and its Affiliates and would be able to recruit and hire personnel other
than employees of the Company or any of its Affiliates.

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The Executive further acknowledges that these provisions apply even in the
absence of a Change in Control. Notwithstanding the foregoing, in the event of a
Termination of Employment by the Company without Cause that does not occur
following a Change in Control or otherwise during a Protected Period, the
restrictions in (a) and (b) above shall apply for the equivalent period of time
for which the Executive is offered full salary severance benefits from the
Company (e.g., if the Executive is offered severance benefits equal to one times
Executive’s annual base salary, the period of time shall be one year); it being
understood that under all other circumstances, including a voluntary termination
by the Executive that does not occur following a Change in Control or otherwise
during a Protected Period, the restrictions in (a) and (b) above shall apply for
the full Restriction Period. The duration and the scope of these restrictions on
the Executive’s activities are divisible, so that if any provision of this
paragraph is held or deemed to be invalid, that provision shall be automatically
modified to the extent necessary to make it valid.
8. Remedies. The Executive acknowledges that a violation or attempted violation
on the Executive’s part of Section 7 will cause irreparable damage to the
Company, and the Executive therefore agrees that the Company shall be entitled
as a matter of right to an injunction, out of any court of competent
jurisdiction, restraining any violation or further violation of such promises by
the Executive or the Executive’s employees, partners or agents. The Executive
agrees that such right to an injunction is cumulative and in addition to
whatever other remedies the Company may have under law or equity.
9. Successors; Binding Agreement.
     (a) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company and its subsidiaries to expressly assume
and agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such succession had taken
place. As used in this Agreement, “Company” shall mean the Company as defined
above and any successor to the business and/or assets of the Company and its
subsidiaries that assumes and agrees to perform this Agreement by operation of
law, or otherwise. Prior to a Change in Control, the term “Company” shall also
mean any Affiliate of the Company to which the Executive may be transferred and
the Company shall cause such successor employer to be considered the “Company”
and to be bound by the terms of this Agreement and this Agreement shall be
amended to so provide. Following a Change in Control the term “Company” shall
not mean any Affiliate of the Company to which Executive may be transferred
unless Executive shall have previously approved of such transfer in writing, in
which case the Company shall cause such successor employer to be considered the
“Company” and to be bound by the terms of this Agreement and this Agreement
shall be amended to so provide. Failure of the Company to obtain an assumption
and agreement as described in this Section 9(a) prior to the effective date of a
succession shall be a breach of this Agreement and shall entitle the Executive
to compensation from the Company in the same amount and on the same terms as the
Executive would be entitled to under this Agreement if the Executive were to
terminate the Executive’s employment for Good Reason during a Protected Period,
except that, for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of Termination.

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     (b) This Agreement shall inure to the benefit of and be enforceable by the
Executive’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive should
die while any amount would still be payable hereunder if the Executive had
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to the Executive’s devisee,
legatee or other designee or, if there is no such designee, to the Executive’s
estate.
10. Notices. Any notice, request, instruction or other document given under this
Agreement shall be in writing and shall be addressed and delivered, in the case
of the Company, to the Secretary of the Company at the principal office of the
Company and, in the case of the Executive, to the Executive’s address as shown
in the records of the Company or to such other address as may be designated in
writing by either party.
11. Withholding Taxes. The Company may withhold from any amounts payable under
this Agreement such federal, state and local taxes as may be required to be
withheld pursuant to any applicable law or regulation.
12. In-Kind Benefits and Reimbursements. In-kind benefits and reimbursements
provided under this Agreement during any tax year of the Executive shall not
affect in-kind benefits or reimbursements to be provided in any other tax year
of the Executive and are not subject to liquidation or exchange for another
benefit. Notwithstanding any other provision of this Agreement, reimbursements
must be made on or before the last day of the Executive’s taxable year following
the taxable year in which the expense was incurred.
13. Miscellaneous. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
and signed by the Executive and such officer as may be specifically designated
by the Board of Directors of the Company. No waiver by either party hereto at
any time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by either party which are not expressly set forth in this
Agreement.
14. Governing Law; Avoidance of Section 409A Penalty. This Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware,
without regard to the conflict of laws provisions thereof. Notwithstanding any
other provision of this Agreement, in the event of a payment to be made, or a
benefit to be provided, pursuant to this Agreement based upon Executive’s
Termination of Employment at a time when the Executive is determined to be a
Specified Employee by the Committee in its sole discretion and such payment or
provision of such benefit is not exempt or otherwise permitted under
Section 409A of the Code without the imposition of Section 409A Penalties, such
payment shall not be made, and such benefit shall not be provided, before the
date which is six (6) months and one day after the Executive’s Termination of
Employment. All payments or benefits delayed pursuant to this Section 14
(i) shall be aggregated into one lump sum payment that shall be due and paid on
the first day of the seventh month after Executive’s Termination of Employment
in accordance with the Company’s normal payroll practices, and (ii) shall not
affect any other payments or benefits due under this Agreement.

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     This Agreement is intended to be written, administered, interpreted and
construed in a manner such that no payment or benefits provided under the
Agreement become subject to (a) the gross income inclusion set forth within Code
Section 409A(a)(1)(A) or (b) the interest and additional tax set forth within
Code Section 409A(a)(1)(B) (together, referred to herein as the “Section 409A
Penalties”), including, where appropriate, the construction of defined terms to
have meanings that would not cause the imposition of Section 409A Penalties. In
no event shall the Company be required to provide a tax gross-up payment to
Executive with respect to Section 409A Penalties.
15. Validity. If any provision of this Agreement shall be declared to be invalid
or unenforceable, in whole or in part, such invalidity or unenforceability shall
not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.
16. Counterparts. This Agreement may be signed in several counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
17. Arbitration. Except as otherwise provided in Section 8 hereof, the parties
agree that any dispute, claim, or controversy based on common law, equity, or
any federal, state, or local statute, ordinance, or regulation (other than
workers’ compensation claims) arising out of or relating in any way to this
Agreement, its termination or any Termination of Employment, including whether
such dispute is arbitrable, shall be settled by arbitration. This agreement to
arbitrate includes but is not limited to all claims for any form of illegal
discrimination, improper or unfair treatment or dismissal, and all tort claims.
The Executive shall still have a right to file a discrimination charge with a
federal or state agency, but the final resolution of any discrimination claim
shall be submitted to arbitration instead of a court or jury. The arbitration
proceeding shall be conducted under the employment dispute resolution
arbitration rules of the American Arbitration Association in effect at the time
a demand for arbitration under the rules is made. The decision of the
arbitrator(s), including determination of the amount of any damages suffered,
shall be exclusive, final, and binding on all parties, their heirs, executors,
administrators, successors and assigns.
18. Status Prior to Change in Control. Nothing contained in this Agreement shall
impair or interfere in any way with the Executive’s right to terminate
employment or the right of the Company to terminate the Executive’s employment
with or without Cause prior to a Change in Control. Nothing contained in this
Agreement shall be construed as a contract of employment between the Company and
the Executive.
19. Legal Fees. The Company shall pay the Executive’s reasonable legal fees and
expenses that may be incurred by the Executive in contesting or disputing any
Termination of Employment that occurs during a Protected Period or in seeking to
obtain or enforce any right or benefit provided by this Agreement, if the
Executive is the prevailing party (through settlement, arbitration, judicial
decision or otherwise) on any material claim in connection with any such
dispute.

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20. Waiver and Release. In order to receive benefits or payments under this
Agreement, the Executive must execute and deliver to the Company a valid Waiver
and Release Agreement in a form tendered by the Company, which shall be
substantially in the form of the Waiver and Release Agreement attached hereto as
Exhibit A and which shall be tendered to the Executive no later than 15 days
following the Executive’s Termination of Employment, with any changes thereto
approved by the Company’s General Counsel (or in the case of the General
Counsel, the Chief Executive Officer) prior to execution. No benefits or
payments shall be paid under this Agreement until Executive has executed his or
her Waiver and Release Agreement within the time period specified by the Company
in the Waiver and Release Agreement (which shall not be more than 45 days after
such agreement is tendered to Executive unless otherwise required by law), and
the period within which Executive may revoke his or her Waiver and Release
Agreement has expired without revocation. Executive may revoke his or her signed
Waiver and Release Agreement within seven (7) days (or such other period
provided by law) after his or her signing the Waiver and Release Agreement. Any
such revocation must be made in writing and must be received by the Company
within such seven (7) day (or such other) period. If Executive timely revokes
his or her Waiver and Release Agreement, he shall not be eligible to receive any
benefits or payments under this Agreement. Notwithstanding the foregoing, if the
expiration of the revocation period described above could occur in a calendar
year later than the calendar year in which the Waiver and Release Agreement is
tendered to the Executive for execution, then in no event will benefits or
payments under this Agreement that are conditioned upon the effectiveness of the
Waiver and Release Agreement be paid prior to the beginning of such later
calendar year.
21. Entire Agreement; Amendment. This Agreement contains the entire
understanding of the parties with respect to the subject matter herein and
supersedes any prior agreements between the Company and the Executive. There are
no restrictions, agreements, promises, warranties, covenants or undertakings
between the parties with respect to the subject matter herein other than those
expressly set forth herein. This Agreement may be modified or amended only
through a writing signed by both parties.
     IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.

            USEC INC.
      By:           W. Lance Wright        Senior Vice President, Human
Resources and Administration                                    

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EXHIBIT A
WAIVER AND RELEASE
     This is a Waiver and Release (“Release”) between
                                         (“Executive”) and USEC Inc. (the
“Company”). The Company and the Executive agree that they have entered into this
Release voluntarily, and that it is intended to be a legally binding commitment
between them.
     1. In consideration for the promises made herein by the Executive, the
Company agrees as follows:
     (a) Change in Control Payment. The Company will pay to the Executive
payments in the amount set forth in the Change in Control Agreement dated as of
___, _____by and between the Company and Executive (the “Change in Control
Agreement”). The Company will also pay Executive accrued but unused vacation pay
in the amount of $                     representing _____days of accrued but
unused vacation.
     (b) Other Benefits. The Executive will be eligible to receive other
benefits as described in the Change in Control Agreement.
     (c) Unemployment Compensation. The Company will not contest the decision of
the appropriate regulatory commission regarding unemployment compensation that
may be due to the Executive.
     2. In consideration for and contingent upon the Executive’s right to
receive the change in control payment and other benefits described in the Change
in Control Agreement and this Release, Executive hereby agrees as follows:
     (a) General Waiver and Release. Except as provided in Paragraph 2.(f)
below, Executive and any person acting through or under the Executive hereby
release, waive and forever discharge the Company, its past and present
subsidiaries and affiliates, and their respective successors and assigns, and
their respective present or past officers, trustees, directors, shareholders,
executives and agents of each of them, from any and all claims, demands,
actions, liabilities and other claims for relief and remuneration whatsoever
(including without limitation attorneys’ fees and expenses), whether known or
unknown, absolute, contingent or otherwise (each, a “Claim”), arising or which
could have arisen up to and including the date of his execution of this Release,
including without limitation those arising out of or relating to Executive’s
employment or cessation and termination of employment, or any other written or
oral agreement, any change in Executive’s employment status, any benefits or
compensation, any tortious injury, breach of contract, wrongful discharge
(including any Claim for constructive discharge), infliction of emotional
distress, slander, libel or defamation of character, and any Claims arising
under the United States Constitution, the Maryland Constitution, Title VII of
the Civil Rights Act of 1964 (as amended by the Civil Rights Act of 1991), the
Americans With Disabilities Act, the Rehabilitation Act of 1973, the Fair Labor
Standards Act, the Family and Medical Leave Act, the National Labor Relations
Act, the Labor- Management Relations Act, the Equal Pay Act, the Older Workers
Benefits Protection Act, the Workers Retraining and Notification Act, the Age
Discrimination in Employment Act, the Employee Retirement Income Security Act of
1974, Section 211 of the Energy Reorganization Act of 1974, the Maryland Human
Rights Act, or any other federal, state or local statute, law, ordinance,
regulation, rule or executive order, any tort or contract claims, and any of the
claims, matters and issues which could have been asserted by Executive against
the Company or its subsidiaries and affiliates in any legal, administrative or
other proceeding. Executive agrees that if any action is brought in his or her
name before any court or administrative body, Executive will not accept any
payment of monies in connection therewith.

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     (b) Miscellaneous. Executive agrees that this Release specifies payment
from the Company to himself or herself, the total of which meets or exceeds any
and all funds due him or her by the Company, and that he or she will not seek to
obtain any additional funds from the Company with the exception of
non-reimbursed business expenses. (This covenant does not preclude the Executive
from seeking workers compensation, unemployment compensation, or benefit
payments from Company’s insurance carriers that could be due him or her.)
     (c) Non-Competition, Non-Solicitation and Confidential Information.
Executive warrants that Executive has, and will continue to comply fully with
the requirements of the Change in Control Agreement.
     (d) THE COMPANY AND THE EXECUTIVE AGREE THAT THE CHANGE IN CONTROL PAYMENT
AND BENEFITS DESCRIBED IN THIS RELEASE AND THE CHANGE IN CONTROL AGREEMENT ARE
CONTINGENT UPON THE EXECUTIVE SIGNING THIS RELEASE. THE EXECUTIVE FURTHER
UNDERSTANDS AND AGREES THAT IN SIGNING THIS RELEASE, EXECUTIVE IS RELEASING
POTENTIAL LEGAL CLAIMS AGAINST THE COMPANY. THE EXECUTIVE UNDERSTANDS AND AGREES
THAT IF HE OR SHE DECIDES NOT TO SIGN THIS RELEASE, OR IF HE OR SHE REVOKES THIS
RELEASE, THAT HE OR SHE WILL IMMEDIATELY REFUND TO THE COMPANY ANY AND ALL
PAYMENTS AND OTHER BENEFITS HE OR SHE MAY HAVE ALREADY RECEIVED PURSUANT TO THE
CHANGE IN CONTROL AGREEMENT.
     (e) The waiver contained in Section 2(a) above does not apply to any Claims
with respect to:
     (i) Any claims under employee benefit plans subject to the Employee
Retirement Income Security Act of 1974 (“ERISA”) in accordance with the terms of
the applicable employee benefit plan,
     (ii) Any Claim under or based on a breach of this Release,
     (iii) Rights or Claims that may arise under the Age Discrimination in
Employment Act after the date that Executive signs this Release,

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     (iv) Any right to indemnification or directors and officers liability
insurance coverage to which the Executive is otherwise entitled in accordance
with the Company’s certificate of incorporation or by-laws or an individual
indemnification agreement.
     (f) EXECUTIVE ACKNOWLEDGES THAT HE OR SHE HAS READ AND IS VOLUNTARILY
SIGNING THIS RELEASE. EXECUTIVE ALSO ACKNOWLEDGES THAT HE OR SHE IS HEREBY
ADVISED TO CONSULT WITH AN ATTORNEY, HE OR SHE HAS BEEN GIVEN AT LEAST [45 DAYS
— if group layoff] [21 DAYS — if individual termination] TO CONSIDER THIS
RELEASE BEFORE THE DEADLINE FOR SIGNING IT, AND HE OR SHE UNDERSTANDS THAT HE OR
SHE MAY REVOKE THE RELEASE WITHIN SEVEN (7) DAYS AFTER SIGNING IT. IF NOT
REVOKED WITHIN SUCH PERIOD, THIS RELEASE WILL BECOME EFFECTIVE ON THE EIGHTH (8)
DAY AFTER IT IS SIGNED BY EXECUTIVE.
BY SIGNING BELOW, BOTH THE COMPANY AND EXECUTIVE AGREE THAT THEY UNDERSTAND AND
ACCEPT EACH PART OF THIS RELEASE.

                                (Executive)       DATE    
 
                USEC INC.            
 
               
By:
               
 
               
 
          DATE    

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