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                                                                   EXHIBIT 10.33

                                   AGREEMENT

                             KOSMOS CEMENT COMPANY
--------------------------------------------------------------------------------
                       KOSMOSDALE - BATTLETOWN, KENTUCKY

                                   AGREEMENT

                                    BETWEEN


                             KOSMOS CEMENT COMPANY
                          OPERATED BY SOUTHDOWN, INC.

                                      AND

                   INTERNATIONAL BROTHERHOOD OF BOILERMAKERS,
                 CEMENT, LIME, GYPSUM & ALLIED WORKERS DIVISION
                                  LODGE D-595

                                   1999-2004

                                                    [KOSMOS CEMENT COMPANY LOGO]


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                               TABLE OF CONTENTS
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<S>           <C>                                                                <C>
ARTICLE I     - RECOGNITION ......................................................1

ARTICLE II    - UNION AND COMPANY COOPERATION ....................................1

ARTICLE III   - THE BASE CREW ....................................................2

ARTICLE IV    - UNION SECURITY ...................................................2

ARTICLE V     - MANAGEMENT RIGHTS ................................................5

ARTICLE VI    - WAGES ............................................................5

ARTICLE VII   - VACATIONS ........................................................6

ARTICLE VIII  - JURY DUTY - WITNESS PAY ..........................................7

ARTICLE IX    - COPIES ...........................................................8

ARTICLE X     - GRIEVANCE PROCEDURE ..............................................8

ARTICLE XI    - NON-BARGAINING UNIT EMPLOYEES ....................................9

ARTICLE XII   - STRIKES AND LOCKOUTS ............................................10

ARTICLE XIII  - HOLIDAYS ........................................................10

ARTICLE XIV   - SENIORITY .......................................................11

ARTICLE XV    - LAYOFF/RECALL ...................................................12

ARTICLE XVI   - JOB BIDDING .....................................................13

ARTICLE XVII  - INCAPACITATED EMPLOYEE ..........................................14

ARTICLE XVIII - WORKWEEK AND OVERTIME ...........................................15

ARTICLE XIX   - BEREAVEMENT LEAVE ...............................................16

ARTICLE XX    - ANNUAL RESERVE TRAINING LEAVE ...................................16

ARTICLE XXI   - SAFETY AND HEALTH ...............................................17
</TABLE>
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<TABLE>
<S>           <C>                                                             <C>
ARTICLE XXII  - BULLETIN BOARD ...............................................17

ARTICLE XXIII - FURNISHING OF TOOLS ..........................................17

ARTICLE XXIV  - TRAINING COMMITTEE ...........................................17

ARTICLE XXV   - OVERTIME LUNCH ALLOWANCE .....................................18

ARTICLE XXVI  - BENEFIT PLANS ................................................18

ARTICLE XXVII - TERMS OF AGREEMENT ...........................................20

SCHEDULE A - PAY PROCEDURES ..................................................21
         A1 - GAINSHARING ....................................................21
         A2 - LEADPERSONS ....................................................21
         A3 - JOB GROUPINGS ..................................................21
         A4 - PROGRESSION SCHEDULES ..........................................23

LETTERS OF AGREEMENT .........................................................25
</TABLE>
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     This Agreement, dated May 1, 1999 is made by and between the KOSMOS CEMENT
COMPANY, Louisville, Kentucky, and the INTERNATIONAL BROTHERHOOD OF
BOILERMAKERS, CEMENT, LIME, GYPSUM, AND ALLIED WORKERS DIVISION LOCAL LODGE NO.
D595, referred to respectively as the "Company" and the "Union."


ARTICLE I - RECOGNITION

1.1 The Company recognizes the Union as the sole bargaining agent for its
employees as is defined in paragraph 1.2 who work at the Company's operations at
Louisville and Battletown, Kentucky, for the purpose of collective bargaining
with respect to rates of pay, hours, and other conditions of employment.

1.2 The term "employee" as used in this Agreement shall include all permanent
production and maintenance employees including lead men, but excluding all
clerical employees, guards and supervisors as defined in the Act and all other
employees.

1.3 Union officers and members shall refrain from any union solicitation on
company time.

1.4 All provisions of this Agreement shall be applied to all employees without
regard to race, color, sex, religious creed, age, national origin, or veteran
status. The Company and the Union will comply with all Federal and State laws
concerning the rights of employees, including the Americans with Disability Act
and the Family and Medical Leave Act.


ARTICLE II - UNION AND COMPANY COOPERATION

2.1 The Union agrees that it will cooperate with the Company in all matters of
industrial relations including carrying out Equal Employment Opportunity
obligations and will support the Company's efforts to assure a fair day's work
on the part of its members and that it will actively strive to eliminate
absenteeism and other practices which restrict production. It further agrees
that its members will abide by the rules of the Company in its effort to prevent
accidents, to eliminate waste in production, conserve materials and supplies,
improve the quality of workmanship, and strengthen goodwill between the Company
and its employees.

2.2 The Union agrees that it will use its best efforts to assist the Company in
enhancing the competitiveness of the Company, and augmenting or increasing
revenue generation. For example, the Union will support, through community
involvement and pro-active measures, the efforts of the Company to obtain
permits and/or other necessary certifications to remain competitive in the
market place.




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2.3 The parties hereto intend by this Agreement to provide a stabilized and
mutually beneficial relationship between them and to insure the production of
quality products on schedule and at competitive costs during the life of this
Agreement. The Company and the Union will also establish an active Employee
Participation Program to facilitate ideas and develop and implement programs to
improve the overall operations and enhance employee involvement.


ARTICLE III - THE BASE CREW

3.1 The parties agree that due to business conditions and the need for effective
plant operations, it is necessary to utilize outside contract labor to perform
work in the operation. Base Crew employees will perform most of the work to be
done at the plant with the remainder to be performed by various numbers and
types of outside contractors. The parties recognize that the Company is in the
primary business of manufacturing cement and other products requiring similar
process (utilizing hazardous waste as fuel). The parties further recognize that
the business is limited in scope and that the Company should avoid, to the
extent possible, getting into other businesses such as special projects, special
maintenance other than routine preventive maintenance, laborer work, janitorial
work, trucking and the like, where other business concerns may have more
expertise, competence, economies of scale or other advantages. Therefore, the
Union agrees that the Company has the right to subcontract these and other types
of work. The base crew concept is intended to enhance the job security of our
permanent employees.

3.2 In an effort to provide the employees of Kosmos Cement Company with positive
labor relations and maximum job security, the parties agree that the Company
will operate the facility as efficiently and economically as possible, and it is
not the intention of the Company to permanently displace members of the
bargaining unit through the use of contract employees.


ARTICLE IV - UNION SECURITY

4.1 All employees covered by this Agreement, who as of May 1, 1991, are members
of the Union in good standing, and all employees who thereafter become members,
shall, as a condition of continued employment, remain members of the Union in
good standing for the duration of the Agreement. All new employees covered by
the Agreement shall, as a condition of employment, become members of the Union
on or immediately after successful completion of their probationary period. The
Company will notify the Union of all permanent new hires' addresses, telephone
numbers, and Social Security numbers.




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4.2 The Company agrees that during all reasonable times when the plant is
operating a duly accredited representative of the Union shall be entitled access
to the premises during the regular working hours for the purpose of assisting in
the adjustment of pending grievances, provided that the designated
representative of the Company is properly notified in advance and the Union
representative establishes proper identification. If it is necessary to go into
the work area of the plant (for example, to view a particular operation relative
to a pending grievance), then the appropriate Company official shall accompany
the Union representative so that both parties see the same thing so as to aid in
resolving the grievance.

4.3 The Union Grievance Committee representing the employees in matters other
than negotiations shall consist of not more than three (3) employees.

4.4 Any employee elected or appointed to a full time position with the
International Brotherhood of Boilermakers, Cement, Lime, Gypsum and Allied
Workers Division may be granted a leave of absence up to one (1) year provided
thirty (30) days written notice is given to the Company prior to the beginning
of such leave. During such leave, seniority shall accumulate. Insurance benefits
shall be suspended upon the commencement of such leave and will be in effect the
first day of returning to work with the Company. Upon returning to work such
employee shall be reinstated to his or her former job within the bargaining unit
by means of the then-existing bidding procedure. The Company agrees to consent
to the absence of no more than one (1) employee at any time under this
paragraph.

4.5 Up to two (2) employees may be excused from work for up to two (2) weeks in
a calendar year for the purpose of attending an International Union meeting or
convention. The leave shall be granted provided the Company receives fifteen
(15) days advance written notice.

4.6 Check-off: During the term of this Agreement, the Company will continue to
check off monthly dues, and initiation fees, each as designated by the Treasurer
of the Local Union, as membership dues in the Union on the basis of and for the
term of individually signed check-off authorization cards, a copy of which is
reproduced below, or hereafter submitted to the Company. The Company shall
promptly remit any and all amounts so deducted to the Treasurer of the Local
Union with a list of the employees from whom the deduction was checked off. On
or before the last Friday of each calendar month the Union shall submit to the
Company a summary list of cards transmitted in each month. Dues for a given
month shall be deducted weekly; deductions on the basis of authorization cards
submitted to the Company shall commence with respect to dues for the month in
which the Company receives such authorization cards. Unless the Company is
otherwise notified, the only Union membership dues to be deducted for payment to
the Union from the pay of the employee who has furnished an authorization shall
be the monthly Union dues. The Company will deduct initiation fees when notified
as designated by the Treasurer of the Local Union. The Union shall indemnify the
Company and hold it harmless against any and all suits, claims, demands and
liabilities that shall arise out of or by reason of any action that shall be
taken or not taken by the Company for the purpose of complying with the
foregoing provisions of this Article, or in reliance on any list or certificate
which shall have been furnished to the Company by the Union under any such
provisions.





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                             CHECK-OFF AUTHORIZATION
                        FOR INTERNATIONAL BROTHERHOOD OF
                          BOILERMAKERS, CEMENT DIVISION



I hereby authorize ______________________ (Name of Employer) to deduct from any
wages earned or to be earned by me, as your employee, and assign to Local Lodge
No. _______, of the International Brotherhood of Boilermakers, Iron Ship
Builders, Blacksmiths, Forgers and Helpers, the sum of money determined by the
Union in succeeding calendar weeks, beginning with the week next following
thereof, until such weekly deductions shall total the sum of my Initiation or
Reinstatement Fees, and thereafter the sum of money set by the Union per month
in payment of my Membership Dues, in accordance with its Constitution and
Bylaws, and became due to it as my Membership Dues in said Union.

This assignment, authorization and description shall be irrevocable for the
period of one (1) year, or until the termination of the current Agreement
between the Employer and the Union, whichever occurs sooner; and I agree and
direct that this assignment, authorization and direction shall be automatically
renewed and shall be irrevocable for successive periods of one (1) year each, or
for the period each succeeding applicable Agreement between the Employer and the
Union, whichever is shorter, unless written notice is given by me to the
Employer and the Union not more than twenty (20) days and not less than ten (10)
days prior to the expiration of each period of one (1) year, or of each
applicable collective agreement between the Employer and the Union, whichever
occurs sooner.


Executed as ___________ this _________ day of ________, 1991.





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ARTICLE V - MANAGEMENT RIGHTS

5.1 The Union recognizes that the management of the plant, river, and quarry
operations, the direction of the working forces, including the right to hire,
discipline for just cause, the right to make and change and enforce (after
posting) rules for the maintenance of discipline and safety; the exclusive
rights to determine partial or permanent discontinuance or shutdown of
operations (the Company's only obligation when exercising this right is to
bargain with the Union over the effects of that decision); the right to promote,
or transfer employees; the right to transfer and relieve employees from duty
because of lack of work or other legitimate reason, and the right to establish
and change the working schedules and duties of employees are vested in the
Company, except as otherwise provided in the Agreement. The listing of specific
rights in this Agreement is not intended to be nor shall be considered
restrictive of or a waiver of any of the rights of management not listed and not
specifically surrendered herein, whether or not such rights have been exercised
by the Company in the past.

ARTICLE VI - WAGES

6.1 It is agreed that for the duration of this Agreement, the wage groups and
the rates of pay shall be those set in Schedule "A".

6.2 (1) All scheduled work beginning between 5:00 A.M. and 12:59 P.M. inclusive,
shall be considered 1st shift work.

    (2) All scheduled work beginning between 1:00 P.M. and 8:59 P.M. inclusive,
shall be considered 2nd shift work.

    (3) All scheduled work beginning between 9:00 P.M. and 4:59 A.M. inclusive,
shall be considered 3rd shift work.

6.3 Each employee regularly scheduled to work on the 2nd shift shall be paid a
premium of sixty cents ($.60) for all hours worked by him or her on that shift.
Each employee regularly scheduled to work on the 3rd shift shall be paid
seventy-five ($.75) for all hours worked by him or her on that shift. These
premium rates do not apply to day workers even though they may work over into a
premium pay shift. If, however, the day worker is scheduled to take the place of
a regular scheduled shift worker, then the premium rate applies. Employees
called out will receive the appropriate shift premium for hours worked prior to
their normal shift.

6.4 All consecutive hours (exclusive of meal periods) worked by an employee who
normally begins work at a time specified in the preceding paragraphs, shall be
deemed to be worked by him or her on the shift on which he or she begins work.

6.5 All regular hours worked on Sunday, not compensated for by an overtime rate
shall be paid for at one and one-quarter (1 1/4) times the rate for work being
performed.




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ARTICLE VII - VACATIONS

7.1 Each employee meeting all the requirements of paragraph 7.2 of this Article
shall be eligible for vacation in accordance with the following schedule:

         Continuous Service                          Vacation Weeks
         ------------------                          --------------

         1 Year of Service                           2 Weeks
         5 Years of Service                          3 Weeks
         10 Years of Service                         4 Weeks
         25 or more Years of Service                 5 Weeks

7.2 An employee must have been actively employed at some time during the
calendar year to be eligible for vacation with pay during that calendar year. An
employee shall receive a full vacation provided that such employee has actually
worked at least one thousand two hundred (1,200) hours during the year preceding
his or her most recent anniversary date. Employees who work less than one
thousand two hundred (1,200) hours in the preceding year will receive their
vacation pay prorata with one/twelfth of their vacation entitlement paid for
every one hundred of hours of actual work performed. An employee shall be
considered as having worked for the purpose of vacation eligibility on the basis
of an eight (8) hour day and forty (40) hour week during absence from work
because of a work related illness or injury for a period not to exceed four
hundred (400) hours.

7.3 Vacations will not be cumulative, and the final right to allotment of
vacation period is exclusively reserved to the Company in order to ensure the
orderly operation of the plant. When requested vacation periods conflict,
preference shall be given to the employee with the most plant seniority. In the
event a paid holiday falls during an employee's vacation period, the employee
shall receive holiday pay in addition to vacation pay.

7.4 The Company determines the number of employees by classification allowed on
vacation on any given week. Management will schedule vacation in a fair and
equitable manner. Vacation scheduling will begin on November 15th of the
previous year and be concluded by December 15th. The final schedule will be
posted by the Company no later than January 1st.

7.5 Vacation must be scheduled by week or weeks (a week is seven (7) calendar
days). Employees may request vacation pay in lieu of the time off provided they
produce a good and sufficient reason to the Company and it is mutually agreed by
the Company and the Union.

7.6 Vacation pay will based on forty (40) hours for each week of entitlement at
the employee's highest rate held for at least thirty (30) weeks in the previous
calendar year.

7.7 Prime Months Vacation Scheduling.

    (1) Prime months for vacation scheduling are June, July, and August.




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    (2) Employees may request a vacation of up to two (2) consecutive weeks
        during prime months in their classification based on plant seniority.
        The Company will approve a vacation request provided there are openings
        in the schedule and it does not adversely affect the efficient
        operations of the plant or quarry.

    (3) Once all employees in a job classification have had an opportunity to
        request a prime month vacation provided there are openings and it does
        not adversely impact operations, the Company will consider second
        requests.

7.8 One (1) week of vacation can be taken one day at a time provided:

    (1) The employee makes a request at least seventy-two (72) hours in advance,
        and,

    (2) The request is granted by the Company.

    (3) Employee may use the above to cover a day of sickness provided the
        Company is notified as soon as possible but no later than 30 minutes
        before the start of the shift.

    It is the intent to arrange absences so that the Company will not incur
    penalties, and, as such, the Company reserves the right to disallow any
    request for a one day vacation.


ARTICLE VIII - JURY DUTY - WITNESS PAY

8.1 It is agreed that the Company shall make up the wage loss incurred by a
regular employee (as distinguished from a probationary employee) because of jury
service by payment of the difference between the amount received for such jury
service on the day such employee would have been regularly scheduled to work and
his or her regular rate of pay computed on the same basis as vacation pay. Any
employee reporting for jury duty will not be required to work his or her regular
shift that calendar day. The employee will be excused for the entire day without
loss of pay. Hours spent on jury duty service and paid for hereunder shall be
considered as time actually worked for the 40 hour overtime requirements.
Further as outlined above, the Company shall make up the wage loss incurred by
an employee when subpoenaed as a witness in an action when the employee or the
Union or the Company are neither the plaintiff nor the defendant.

8.2 To receive pay from the Company under this provision, the employee must
provide the Company with a statement signed by an official of the court
certifying as to the employee's service as a juror or court witness or
appearance in court for such purposes, the date or dates of attendance, and the
compensation paid him or her exclusive of any transportation and/or subsistence
allowance.




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ARTICLE IX - COPIES

9.1 The Labor Agreement and Summary Plan Descriptions for the Pension Plan,
401K, and Insurance Plan will be printed at Company expense. The Company will
provide each member with a copy of the booklet.


ARTICLE X - GRIEVANCE PROCEDURE

10.1 Should differences arise during the term of this Agreement between the
Company and the Union, or an individual employed by the Company, as to the
meaning and application of the provisions of this Agreement, an earnest effort
shall be made by the parties to settle such differences promptly and in the
following manner:

    (1) STEP I. The complaint, within three (3) days of its occurrence, or the
occurrence of the matter out of which the complaint arises, may be taken up by
the employee involved, with or without Union representation, with his or her
supervisor. The employee shall state the specific article(s) and paragraph(s) of
the Contract that is alleged to have been violated in order for the grievance to
be considered and processed.

    (2) STEP II. If no satisfactory settlement is reached in Step I, the matter
shall be reduced to writing and presented to the Plant Manager within five (5)
days from the date of the meeting with the supervisor. The employee shall state
the specific article(s) and paragraph(s) of the Contract that is alleged to have
been violated in order for the grievance to be considered and processed. At the
time of presentation, or within five (5) days, the Plant Manager or his designee
will meet with the grievance committee to hear and discuss the grievance. The
Company shall answer the grievance in writing within five (5) days after said
meeting.

    (3) STEP III. If no agreement is reached in Step II, the Committee may,
within five (5) days of the receipt of the above answer, refer the matter to
higher officials of the Company and the Union, who may attend a meeting to be
held at a time mutually agreed to by the parties.

    (4) STEP IV. Any grievance not settled in Step III above may be referred to
the Dispute Resolution Panel. This panel will consist of one (1) official of the
International Union, one (1) official of the Corporate Human Resources
Department, and one (1) individual mutually agreed upon by these two (2)
officials. Notice to refer a grievance to the Dispute Resolution Panel shall be
given in writing within fifteen (15) days after being notified of the decision
rendered in Step III or the matter will be considered closed. Only one (1)
grievance may be submitted to or be under review by the Dispute Resolution Panel
at any one (1) time unless by prior mutual written consent of the parties. The
Dispute Resolution Panel shall have no power to add to or subtract from or
change, modify or amend any of the provisions of this Agreement. The decision
rendered by the Dispute Resolution Panel will be final and binding upon the
Union, the Company, the grievant, and all the




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employees covered by this Agreement. The Dispute Resolution Panel shall
interpret and apply the terms of this Agreement; they shall not substitute their
discretion and judgement for that of the Company. Disputes shall be settled by
majority vote. The actual vote cast by each party shall not be revealed. It is
expressly agreed that the Dispute Resolution Panel shall not have the authority
to decide any matter involving the exercise of a right reserved to management
under this Agreement. The expenses incident to the services of the third party,
including the cost of the meeting room, etc. shall be shared equally by the
Company and the Union.

10.2 Any grievance growing out of a discharge or suspension must be submitted in
writing by the aggrieved employee directly to the Union and from the Union to
the Director of Human Resources or Plant Manager within forty-eight (48) hours
from the time the Union is notified in writing of the discharge or suspension or
it will not be recognized and action taken shall be final.

10.3 The time limits referred to in the foregoing paragraphs exclude Saturdays,
Sundays and holidays.

10.4 Any grievance not presented or appealed within the time limits provided,
unless mutually agreed in writing to extend the time, shall be considered
settled on the basis of the decision which was not appealed and shall be final
and binding on the parties involved.

10.5 Grievances presented in any of the regular steps set forth and not answered
within the specified time shall be considered as having been appealed to the
next step of the grievance procedure.

10.6 The Company will schedule grievance meetings at mutually convenient times
and the Union Grievance Committee as defined in Article 4.3 will not lose
regularly scheduled pay for time spent in grievance meetings.


ARTICLE XI - NON-BARGAINING UNIT EMPLOYEES

11.1 It is understood and agreed that during the normal course of operations it
may be necessary for non-bargaining unit employees to perform some bargaining
unit work from time to time. Such work will be incidental to the normal duties
of said non-bargaining unit employees, as long as such work does not permanently
displace or replace a bargaining unit employee. Such work shall include work
involving corrective action which must be performed expeditiously; instruction
or training of employees; demonstration; inspection or testing of equipment;
work of an emergency nature; and development work for new processes and/or
procedures.

11.2 Temporary employees will be used to perform work that is incidental to the
manufacturing of cement. This will include but not be limited to clean-up,
janitorial duties, lawn and ground maintenance and short-term projects, etc. In
addition, the parties recognize that temporary employees may be used for other
assignments such as to address temporary surges in business, to




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facilitate the scheduling of permanent employees for training and development
opportunities, to enhance the job security of permanent employees, etc.
Temporary employees will not be permitted to work for the plant or the quarry
more than 180 consecutive calendar days.

11.3 The Company will not expand beyond three (3) temporary employees without
first notifying the Union committee in writing. Any new temporary employees
added cannot be utilized for longer than 180 calendar days without mutual
agreement between the parties.


ARTICLE XII - STRIKES AND LOCKOUTS

12.1 The Union agrees that there shall be no picketing or strikes by the Union
or by its members, of any kind or degree whatsoever, or walkout, suspension of
work, slowdowns, limiting of production, or any other interference or stoppage,
total or partial, of the Company's operations for any reason whatsoever, such
reasons including, but not limited to, unfair labor practices by the Company or
any other Employer. It is further agreed that neither the Union or its members
shall engage in the above prohibited conduct in support of picketing, strikes or
any labor dispute actions engaged in by any other organization or person. In
addition to any other recourse or remedy available to the Company for violation
of the terms of this Article by the Union and/or any Union member, the Company
may discharge or otherwise discipline any employee who authorizes, causes,
engages in, sanctions, recognizes, or assists in any violation of this Article.
The Company will not engage in any lockouts during the term of this Agreement.

ARTICLE XIII - HOLIDAYS

13.1 The Company recognizes the following nine (9) paid holidays per year: New
Year's Day, Good Friday, Memorial Day, 4th of July, Labor Day, Thanksgiving, Day
after Thanksgiving, Christmas Eve, and Christmas Day. Beginning with the
calendar year 2002 an additional holiday will be observed on President's Day.

13.2 Holiday pay will be equal to eight (8) hours pay at the employee's straight
time hourly rate. Such holiday pay will not be paid if the employee is absent
from work on the holiday if scheduled to work on the holiday or if the employee
is absent on the scheduled day preceding or following the holiday unless such
absences are excused by Management. In no event shall a holiday be paid for
unless an employee has also actually worked at least one (1) day during the
fifteen (15) day period immediately preceding or immediately following the
holiday. If a ten (10) hour shift employee is scheduled off for a holiday
falling during his or her regular four (4) days of work, he or she will receive
ten (10) hours of holiday pay.

13.3 If an employee is required to work on a holiday, he or she will receive
eight (8) hours pay for the holiday (holiday pay) plus one and one-half (1-1/2)
times the employee's regular hourly rate for the first eight (8) hours actually
worked on the holiday. The employee will receive two and one-half (2-1/2) times
the employee's regular hourly rate for hours worked in excess of eight (8) on
the holiday.





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13.4 The eight (8) hours holiday pay shall be counted toward the calculation of
overtime pay paid for working in excess of forty (40) hours per week.

13.5 Since the employee is receiving one and one-half (1-1/2) times the
employee's regular hourly rate for hours actually worked on the holiday, such
hours actually worked on the holiday shall not be counted toward the calculation
of overtime pay received for working in excess of forty (40) hours per week.

13.6 When a holiday falls on Sunday, it will normally be observed on the
following Monday.

ARTICLE XIV - SENIORITY

14.1 Seniority shall consist of an employee's length of continuous service with
the Company since the employee's last day of hire at its facility located at
Louisville and/or Battletown, Kentucky.

14.2 Each new employee shall be considered as a probationary employee for the
first ninety (90) calendar days of full time employment after which the
employee's seniority shall date back to his or her date of hire. There shall be
no seniority among probationary employees. Such employees shall not have
recourse to the grievance procedure of this Agreement and may be laid off or
discharged as exclusively determined by the Company.

14.3 Seniority and the employment relationship shall be automatically terminated
when an employee:

     1. is discharged;

     2. is terminated upon permanent shutdown of the Company's facilities;

     3. is laid off for a period of twenty-four (24) months or the length of his
        or her seniority as of his or her last day of work, whichever period is
        shorter;

     4. voluntarily quits which shall be deemed to include:

        a) failure to notify the Company of the employee's intention to return
        to work after layoff within three (3) working days, and to actually
        report to work within seven (7) working days (unless this latter period
        is extended in writing by the Company) after he or she has been notified
        by certified mail (either by delivery or attempted delivery) at his or
        her last address appearing on the Company's records to report to work;





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        b) an absence for two (2) consecutive scheduled work days without
        notifying the Company or reporting to work unless excused by Management
        in advance;

        c) the employee fails to return to work on the first regularly scheduled
        work day following the termination of any leave of absence or any other
        leave approved by the Company unless excused by Management.

     5. retires.

14.4 When a vacancy occurs for which a laid off employee is qualified, he or she
will be given notice of recall at his or her last address as shown on Company
records. The employee must notify the Company of the employee's intention to
return to work after layoff within three (3) working days and must actually
report to work within seven (7) working days after he or she has been notified.
This may be extended for an additional seven (7) days if the employee has
another job which requires a two (2) week resignation notice.

14.5 An employee on continuous absence due to disability shall accrue seniority
and retain recall rights for a period not to exceed twenty-four (24) months. An
employee absent because of disability shall only be returned to work after he or
she is physically able to perform the job. However, should such an employee be
declared totally and permanently disabled prior to twenty-four (24) months, such
employee's name shall be removed from the payroll and a notice to this effect
will be sent to his or her last address as shown on Company records.

14.6 Seniority lists agreed to by and between the Company and the Union shall be
posted on the bulletin board as of May 1 and November 1 of each year.
Corrections shall be made in the seniority lists when it is proved an employee
is placed in the wrong position on said list, but all requests for corrections
must be made within thirty (30) days from date of posting or the list shall be
valid as posted. The Union will be given a copy of the seniority list.

14.7 All employees have the obligation to notify the Company of their current
address and telephone number and immediately advise the Company of any changes.


ARTICLE XV - LAYOFF/RECALL

15.1 The Company recognizes that all employees shall retain the right to
seniority preference in cases of layoffs and recall. The last employee hired
shall be the first laid off and the last laid off the first rehired. Such
preferences in the cases of layoffs and recall shall take into consideration the
employee's ability to perform the available work and the efficient operations of
the operation. It is recognized that, in periods where business conditions
necessitate that the level of production be reduced to a point where only a
minimum of employees is required, it shall be necessary, in some cases, to
deviate from strict plant seniority in order that some positions be available to
service and adjust the equipment when production requirements increase. In the
event of a layoff which is scheduled to last five (5) or more days, the Company
will layoff employees in Job Groups one (1)





                                       12
<PAGE>   16

through four (4) by plant seniority. Any such employee who displaces the least
senior person in a position must be qualified to perform in that position within
a reasonable period of time not to exceed five (5) days of being placed on the
job. If the Company does not layoff in accordance with seniority, the Company
will meet with the Union to explain the reasons prior to the layoff.

15.2 In the event that an employee is displaced by the installation of
mechanical equipment, change in production methods, the installation of new or
larger equipment, the combining of jobs, the elimination of jobs, or by a more
senior person, the employee may elect to exercise his or her plant seniority to
displace the least senior person in a position the employee is qualified to
perform within a reasonable period of time not to exceed thirty (30) days of
being placed on the job.

15.3 In the event the Company determines it is necessary to permanently change
the shift schedule or off days of an employee, the affected employee may
exercise seniority to displace a less senior employee within the same
classification.


ARTICLE XVI - JOB BIDDING

16.1 When the Company determines a permanent vacancy exists, other than a
minimum pay job and it cannot be filled from senior employees within the same
job classification, the Company will post a notice of such fact, such notice to
remain posted for a period of five (5) days, not including Saturdays, Sundays,
or holidays. Any employee on vacation during the posting period (not to exceed
two (2) weeks) will have forty-eight (48) hours from the time the employee was
scheduled to return from vacation to determine if any bids were posted during
the vacation and to submit a job bid for consideration. This notice shall state
rates of pay, hours, current shifts and off days, and job requirements.
Employees who wish the job shall be considered in the manner provided herein in
paragraph 16.2 and the successful applicant's name should the job be awarded,
will be posted within fourteen (14) days after the bid is removed from the
bulletin board, no more than thirty (30) days where testing is required. The
successful bidder will be placed on the job as needed. If a successful bidder is
not assigned to the job within ninety (90) days following the awarding of the
bid, and the Company still intends to fill the job, the employee shall receive
the applicable rate of the new job and any time accumulated after the awarding
of the job bid shall be credited towards the progression schedule. If there are
no qualified bidders, the Company may assign the least senior qualified employee
who does not hold a bid job to the vacancy.

16.2 The following factors shall apply in the awarding of all jobs:

     (1) Qualifications of the Applicant (which shall include: ability to
         perform the work, aptitude, skills, experience, training for the job,
         score on the mechanical aptitude examination published by The
         Psychological Corporation, and attendance);

     (2) Physical ability to perform the essential functions of the job;




                                       13
<PAGE>   17

     (3) Experience gained through holding jobs under the bid system, outside
         schooling, as well as skills, knowledge, training and ability acquired
         by an employee prior to employment with the Company, will be given
         consideration in awarding jobs. Experience gained through temporary
         reassignments will not be given consideration in awarding jobs, except
         to qualify the senior bidder

     (4) In the event that the three previous criterion are equal the position
         will be filled by the most senior applicant.

    If the employee selected shall fail to qualify after a fair trial period, in
the exclusive judgement of the Company he or she shall be returned to his or her
former position and the next bidder shall be given consideration. No employee
with a formal disciplinary action in the record within the last 12 months may be
considered for promotion. A verbal warning shall not be considered a formal
disciplinary action for this purpose. Employees may bid for a job below their
current classification only once in a 36 month period.

16.3 Temporary Reassignment. An employee who is temporarily assigned by his or
her supervisor to perform work of a higher paid job classification will be paid
the rate of such higher job classification for time actually worked. An employee
temporarily assigned by his or her supervisor to perform work in an equal or
lower paid classification will be paid the base hourly wage rate of his or her
permanent classification. When making temporary assignments from the laborer
classification, the Company will upgrade the senior available employee who is
not already upgraded from the classification.

16.4 In no event shall the Company be requested or required to post any job
temporarily vacated by reason of vacations, illness, or injury. The Company, at
its discretion, may create temporary jobs not to exceed one hundred twenty (120)
work days, which may be extended by mutual agreement between the Company and the
Union. Should the Company determine that any temporary job become permanent, the
Company shall post the job as provided in this Article.

16.5 In the event that two (2) or more existing positions are combined, the
affected employees in the classification will be assigned, if needed, in the new
combined job by seniority and ability to perform the work. Any vacancies created
by this action will be bid in accordance with Article 16.1.

ARTICLE XVII - INCAPACITATED EMPLOYEE

17.1 Any employee who becomes incapacitated and, on the basis of competent
medical opinion, cannot perform the duties of his or her regular job may be
placed in a vacant or other job by mutual agreement between the Local Management
and the Local Union Committee providing the employee can perform the job within
a reasonable training program. In placing an incapacitated employee under this
provision, the Parties will take into consideration the fair placement of any
employee who may be displaced by such assignment.





                                       14
<PAGE>   18

ARTICLE XVIII - WORKWEEK AND OVERTIME

18.1 During the life of this Agreement it is understood that the work day shall
be twenty-four (24) hours commencing with the beginning of the employee's
morning shift and the work week shall be seven (7) days beginning with the
beginning of the morning shift on Monday. One and one-half (1-1/2) times the
employee's regular hourly rate shall be paid for all hours worked in excess of
forty (40) hours per week.

18.2 One and one-half (1-1/2) times the employee's regular hourly rate shall be
paid for all hours worked in excess of eight (8) in a day and two (2) times the
employees regular hourly rate shall be paid for all hours worked in excess of
twelve (12) in a work day for employees scheduled to work a normal eight (8)
hour day. One and one-half (1-1/2) times the employee's regular hourly rate
shall be paid for all hours worked in excess of ten (10) in a day and two (2)
times the employee's regular hourly rate shall be paid for all hours worked in
excess of fourteen (14) in a work day for employees scheduled to work a normal
ten (10) hour day. Daily overtime shall not be counted toward the calculation of
overtime pay received for working in excess of forty (40) hours per week.

18.3 Callouts.

    (1) If an employee is called out after his or her regular shift and after
leaving the plant, or on off days, he or she shall be paid a minimum of four (4)
hours pay at one and one-half (1-1/2) times the employee's regular rate.
However, such hours shall not be counted toward the calculation of overtime pay
paid for working in excess of forty (40) hours per week.

    (2) If such employee is notified twelve (12) hours or more in advance of his
or her shift, the four (4) hour minimum will not apply.

    (3) If an employee is called out within four (4) hours of his or her
scheduled shift start, he or she shall receive a minimum of four (4) hours pay
at one and one-half (1-1/2) times the employee's regular rate in addition to
regular pay for scheduled hours worked.

18.4 Weekly manning schedule shall be posted no later than 10:00 A.M. on Fridays
barring unforeseen circumstances outside the Company's control.

18.5 Employees who have not been notified of a schedule change after the Friday
posting and who report to work shall be guaranteed a minimum of four (4) hours
pay if no work is available. If an employee is assigned to work, he or she shall
be scheduled a minimum of eight (8) hours of work during the work day. This
provision shall not apply if failure to provide work is due to circumstances
outside the Company's control such as but not limited to fire, flood, storm,
major equipment failure, or utility failure. Every reasonable effort shall be
made to notify employees in advance of their reporting to work.

18.6 Report Pay. If an employee shows up for work at his or her scheduled time
and is not put to work (sent home for lack of available work) he or she shall
receive four (4) hours pay. An employee




                                       15
<PAGE>   19

who works will be paid for hours worked but not less than four (4) hours pay if
sent home by the Company. This provision shall not apply if failure to provide
work is due to circumstances outside the Company's control such as, but not
limited to, fire, flood, storm, major equipment failure or utility failure.

18.7 The current Overtime Distribution Policy will be posted by the Company.
This policy may be amended by a mutual agreement between the parties. The
overtime list will be maintained by the Company. It is agreed that employees may
not refuse to work mandatory overtime unless a reasonable excuse is given as
determined by the company.


ARTICLE XIX - BEREAVEMENT LEAVE

19.1 When an employee who has completed the probationary period is absent from
work to arrange for and/or attend the funeral of his or her parent, stepfather,
stepmother, wife or husband, son or daughter, or stepchildren, brother, sister,
grandfather, grandmother, grandchildren, father-in-law, mother-in-law, spouse's
grandparents, spouse's brother, spouse's sister, the Company will pay up to the
next three (3) scheduled work days (up to the next four (4) scheduled days off
with pay if the employee is required to travel beyond a radius of five hundred
(500) miles), for eight (8) hours at the employee's regular hourly rate for each
scheduled workday the employee is absent.

19.2 Funeral leave will be granted within seven (7) days of the death or service
only for absences occurring on the employee's regularly scheduled workdays and
will not apply to employees on layoff or other non-working status. Hours paid
under this Article will be counted as hours worked for the purpose of computing
overtime. To be eligible for benefit under the Article, the employee must supply
reasonable documentary evidence of covered death, family relationship, and
attendance at the funeral or service.

19.3 Employees who normally work a ten (10) hour, four (4) day work week will be
compensated in accordance with paragraph 19.1 for up to ten (10) hours at the
employee's regular hourly rate for each scheduled workday absent provided the
employee would have worked ten (10) hours on those days of absence. The maximum
funeral leave allowance for ten (10) hour shift employees will be thirty (30)
hours of pay per bereavement.


ARTICLE XX - ANNUAL RESERVE TRAINING LEAVE

20.1 Employees who are members of organized reserve components of the Armed
Forces, including the National Guard, will be allowed leave of absence annually
for the purpose of attending required military training encampments or cruises.
The Company will pay any employee who goes on such leave of absence the
difference between the employee's straight time pay for up to (2) two weeks and
the employee's military pay including longevity pay but excluding all allowances
such as rent, subsistence, uniform and travel. Payment will be made when the
employee returns from




                                       16
<PAGE>   20

reserve training on presentation of satisfactory proof of the amount of pay
received.


ARTICLE XXI - SAFETY AND HEALTH

21.1 A joint Safety and Health Committee shall be established consisting of
members, appointed by the Company and the Union. The committee will consist of
not more than four (4) members from the Union and four (4) members from the
Company plus the Plant Manager or his representative. Meetings will be held
regularly to address safety and health concerns and make recommendations to the
Plant Manager.


ARTICLE XXII - BULLETIN BOARD

22.1 The Union agrees to post only notices concerning elections, meetings,
reports and other official Union business and notices of social and recreational
activities on the Company bulletin board. A copy of each notice will be supplied
to the Plant Manager at the time of its posting. The Union agrees further that
it will post no matter which is in the disinterest of the Company. However,
notwithstanding the above, it is understood that the Company's decision
concerning the use of the bulletin board shall be final.


ARTICLE XXIII - FURNISHING OF TOOLS

23.1 The Company shall furnish all special tools and equipment. Maintenance
employees shall furnish their own tools; in case of breakage, loss, or worn out
tools, the Company will replace or repair such tools. All breakage or loss shall
be reported immediately to the Company.


ARTICLE XXIV - TRAINING COMMITTEE

24.1 A joint Union Management Training Committee will be established consisting
of an equal number of representatives from the Union and the Management. Other
representatives may be invited to participate in the meetings from time to time
by mutual agreement as needed.

24.2 The purpose of the Committee will be to assist management by making
recommendations as to the selections, evaluations and progression of employees
in training and the overall successful administration of the plant training
program. The Committee shall meet quarterly or otherwise as necessary to
accomplish this objective.

24.3 A trainee will not be disqualified from the program without first being
advised of and placed in a probationary status unless the trainee's conduct
requires immediate removal. The Parties recognize it may be necessary to rotate
shift assignments to enable employees to obtain the necessary work experience.
Employees placed on probationary status shall not advance in pay.




                                       17
<PAGE>   21

ARTICLE XXV - OVERTIME LUNCH ALLOWANCE

25.1 Any employee who works more than ten (10) consecutive hours or twelve (12)
consecutive hours for employees on ten (10) hour shifts where such overtime
hours are unscheduled, shall be given a lunch allowance. Any employee called out
who works more than four (4) consecutive hours outside his or her normal shift
will receive a lunch allowance. No lunch allowance will be provided if such
overtime hours are scheduled with twelve (12) hours advance notice. The lunch
allowance will not exceed $7. Effective May 1, 2002 the lunch allowance will not
exceed $8.


ARTICLE XXVI - BENEFIT PLANS

26.1 During the term of this Agreement the Company will provide employees with
participation in the Southdown, Inc. Medical Plan, the Southdown, Inc. Group
Dental Benefit Plan, the Southdown, Inc. Life Insurance and Accidental Death and
Dismemberment Plan, the Southdown, Inc. Long Term Disability Plan, the
Southdown, Inc. Pension Plan, the Southdown, Inc. Retirement Savings Plan, and
the Southdown, Inc. Voluntary Life Insurance Plan, and continue said plans for
the life of this Agreement unless the parties agree mutually to modify the
provisions of these plans. Effective May 1, 1999, gainsharing earnings will be
included as part of base pay for pension calculation purposes.

26.2 During the life of and for the term of this Agreement dated May 1, 1999,
the Company will provide post retirement medical insurance coverage to all
eligible employees covered under this bargaining unit who retire after having
achieved age 62 with at least 15 years of company service. The provisions of
this coverage will be the same as the benefits and eligibility requirements
provided for in the Southdown Inc. Retiree Medical Insurance Plan which are
subject to modification.

26.3     SICKNESS AND ACCIDENT BENEFITS

If an employee with at least one (1) year of service is absent from work due to
disability, sickness and accident benefits are payable. The disability must
prevent the employee from performing the duties of the job because of a
non-occupational sickness or injury. This benefit is payable if confined to a
hospital or home.

After a waiting period of three (3) work days, disability benefits are payable
at a rate of twenty five dollars ($25) per day for the fourth and fifth work day
of absence, then at a rate of fifty-five dollars ($55) per day for a maximum of
five days per week. The waiting period will be waived if the employee is
hospitalized as an in-patient and the daily benefits will be paid immediately at
the fifty-five dollar ($55) rate. A disabled employee may receive weekly
sickness and accident benefits during the period of disability not to exceed
five (5) months. It is the employee's responsibility to make application for
this benefit and the attending physician must document the nature of the
disability and expected date of return to work.




                                       18
<PAGE>   22

No benefits shall be payable for the following:

        1.  disability which you are not under the direct care of a licensed
            physician.

        2.  sickness or injury which is purposefully self-inflicted while sane
            or insane.

        3.  disability due to an injury arising out of the course of employment.

        4.  disability due to disease which benefits are payable under Worker's
            Compensation, Occupational Disease or similar law.

This benefit terminates upon retirement or upon termination of employment.

Any employee currently not participating in the long term disability (LTD) plan
and who applies for LTD coverage no later than July 1, 1996 and is rejected or
shows evidence of prior rejection, will be eligible for up to fifty two (52)
weeks of sickness and accident benefits.




                                       19
<PAGE>   23

ARTICLE XXVII - TERMS OF AGREEMENT

27.1 After ratification by the members of the Local Union, this Agreement shall
become effective and remain in force and effect and be binding upon the parties
hereto from May 1, 1999, to and including April 30, 2004, and it shall continue
to be in full force and effect thereafter from year to year until either party
on or before February 28 of any year, beginning February 28, 2004, gives written
notice to the other party of its desire or intention either to alter and modify
or terminate the same. If such notice is given, the parties hereto shall begin
negotiations not later than April 1 in such year.

    IN WITNESS WHEREOF, the Union has caused this Agreement to be executed in
its name, after due authorization by a vote of a majority of its members, and
the Company has caused it to be executed in its name, by its duly authorized
representatives.

INTERNATIONAL BROTHERHOOD OF                   KOSMOS CEMENT COMPANY
BOILERMAKERS, CEMENT, LIME,
GYPSUM AND ALLIED WORKERS,
DIVISION LOCAL LODGE NO. D595



-----------------------                        ---------------------------------
By: J. C. Todd                                 By: Bernard M. Reuland


-----------------------                        ---------------------------------
By: Timothy E. McCoy                           By: Stuart E. Tomlinson


-----------------------                        ---------------------------------
By: David L. Swarens                           By: Steven K. Martin


-----------------------                        ---------------------------------
By: Gary W. Killen                             By: Paul J. Anderson


-----------------------
By: Patrick M. Granzow


-----------------------
By: William G. Bennett


-----------------------
By: Buddy Joe Singleton


-----------------------
By: James E. Pack


Signed this 1st day of May, 1999.              Signed this 1st day of May, 1999.




                                       20
<PAGE>   24

                           SCHEDULE A - PAY PROCEDURES

A1 - GAINSHARING: The employees will participate in a gainsharing program
developed by the Company.

A2 - LEADPERSONS: Leadpersons may only be appointed at the sole discretion of
management. They shall be paid $1.25 per hour in addition to their normal rate
of pay while they are designated as leadpersons to perform certain
quasi-supervisory tasks incidental to their normal hands-on work.

A3 - JOB GROUPINGS: The following positions shall be grouped together for pay
purposes:

JOB GROUP ONE - GENERAL PLANT WORKER

Sweeper
Bobcat Operator
Laborer

*Not withstanding other provisions of this Agreement, this will be a bid job.

JOB GROUP TWO - UTILITY WORKER

River Watchman
Storeroom Attendant
Maintenance Lift Truck Driver
Shipper/Packer*/Loader
Root Catcher

*The Company will continue the current practice of providing an incentive to
packhouse employees of $3/1,000 bags of product packed per day.

JOB GROUP THREE - MATERIAL HANDLERS

Quarry Lube Serviceman
Crusher Operator
Clay Feeder
Clay Dryer Operator
Drill Operator
Quarry Driver
Quarry Barge Loader
Quarry Front-end Loader
Material Handler
Quarry Dozer Operator
Quarry Road Maintenance




                                       21
<PAGE>   25


JOB GROUP FOUR - PROCESS/HEAVY EQUIPMENT

Process Attendant
Quarry Mobile Equipment Operator
Derrick Operator
Quarry Blaster

JOB GROUP FIVE - LABORATORY

Laboratory Technicians

JOB GROUP SIX - SKILLED REPAIRMAN

Mechanical Repairman*
Electrical Repairman*
Garage Mechanic

*Requires Department of Labor Journeyman's Certificate to achieve Journeyman's
rate.

JOB GROUP SEVEN - INSTRUMENTS & CONTROL

Instrument Technician**
Control Room Operator
Machinist/Tool & Die Maker ***

**Must be Journeyman Electrical Repairman.
***Must be Journeyman Mechanical Repairman and requires Machinist Journeyman's
Certificate to achieve Journeyman's rate.




                                       22
<PAGE>   26


A4 - PROGRESSION SCHEDULES: The following wage schedules reflect a fifty cent
($.50) increase effective 5/1/99 a forty-five cent ($.45) increase effective
5/1/00, a forty-five cent ($.45) increase effective 5/1/01, a fifty cent ($.50)
increase effective 5/1/02, and a fifty cent ($.50) increase effective 5/1/03.

<TABLE>
<CAPTION>
                             5/1/99     5/1/00     5/1/01     5/1/02     5/1/03
                            -------    -------    -------    -------    -------
<S>                         <C>        <C>        <C>        <C>        <C>
JOB GROUP ONE

Starting Rate               $ 11.20    $ 11.65    $ 12.10    $ 12.60    $ 13.10
End of 6 Months Worked      $ 11.85    $ 12.30    $ 12.75    $ 13.25    $ 13.75

JOB GROUP TWO

Starting Rate               $ 11.85    $ 12.30    $ 12.75    $ 13.25    $ 13.75
End of 6 Months Worked      $ 12.75    $ 13.20    $ 13.65    $ 14.15    $ 14.65
End of 12 Months Worked     $ 13.70    $ 14.15    $ 14.60    $ 15.10    $ 15.60
End of 18 Months Worked     $ 14.00    $ 14.45    $ 14.90    $ 15.40    $ 15.90

JOB GROUP THREE

Starting Rate               $ 13.55    $ 14.00    $ 14.45    $ 14.95    $ 15.45
End of 6 Months Worked      $ 14.40    $ 14.85    $ 15.30    $ 15.80    $ 16.30
End of 12 Months Worked     $ 14.90    $ 15.35    $ 15.80    $ 16.30    $ 16.80
End of 18 Months Worked     $ 15.40    $ 15.85    $ 16.30    $ 16.80    $ 17.30

JOB GROUP FOUR

Starting Rate               $ 14.10    $ 14.55    $ 15.00    $ 15.50    $ 16.00
End of 6 Months Worked      $ 14.45    $ 14.90    $ 15.35    $ 15.85    $ 16.35
End of 12 Months Worked     $ 14.85    $ 15.30    $ 15.75    $ 16.25    $ 16.75
End of 18 Months Worked     $ 15.25    $ 15.70    $ 16.15    $ 16.65    $ 17.15
End of 24 Months Worked     $ 15.65    $ 16.10    $ 16.55    $ 17.05    $ 17.55
End of 30 Months Worked     $ 16.05    $ 16.50    $ 16.95    $ 17.45    $ 17.95
End of 36 Months Worked     $ 16.55    $ 17.00    $ 17.45    $ 17.95    $ 18.45

JOB GROUP FIVE

Starting Rate               $ 14.35    $ 14.80    $ 15.25    $ 15.75    $ 16.25
End of 6 Months Worked      $ 14.75    $ 15.20    $ 15.65    $ 16.15    $ 16.65
End of 12 Months Worked     $ 15.25    $ 15.70    $ 16.15    $ 16.65    $ 17.15
End of 18 Months Worked     $ 15.75    $ 16.20    $ 16.65    $ 17.15    $ 17.65
End of 24 Months Worked     $ 16.20    $ 16.65    $ 17.10    $ 17.60    $ 18.10
End of 30 Months Worked     $ 16.50    $ 16.95    $ 17.40    $ 17.90    $ 18.40
End of 36 Months Worked     $ 16.85    $ 17.30    $ 17.75    $ 18.25    $ 18.75
End of 42 Months Worked     $ 17.20    $ 17.65    $ 18.10    $ 18.60    $ 19.10
</TABLE>




                                       23
<PAGE>   27

<TABLE>
<CAPTION>
                             5/1/99     5/1/00     5/1/01     5/1/02     5/1/03
                            -------    -------    -------    -------    -------
<S>                         <C>        <C>        <C>        <C>        <C>
JOB GROUP SIX

Starting Rate               $ 14.65    $ 15.10    $ 15.55    $ 16.05    $ 16.55
End of 6 Months Worked      $ 14.95    $ 15.40    $ 15.85    $ 16.35    $ 16.85
End of 12 Months Worked     $ 15.25    $ 15.70    $ 16.15    $ 16.65    $ 17.15
End of 18 Months Worked     $ 15.55    $ 16.00    $ 16.45    $ 16.95    $ 17.45
End of 24 Months Worked     $ 15.85    $ 16.30    $ 16.75    $ 17.25    $ 17.75
End of 30 Months Worked     $ 16.15    $ 16.60    $ 17.05    $ 17.55    $ 18.05
End of 36 Months Worked     $ 16.45    $ 16.90    $ 17.35    $ 17.85    $ 18.35
End of 42 Months Worked     $ 16.75    $ 17.20    $ 17.65    $ 18.15    $ 18.65
End of 48 Months Worked     $ 17.40    $ 17.85    $ 18.30    $ 18.80    $ 19.30

JOB GROUP SEVEN

Starting Rate               $ 17.40    $ 17.85    $ 18.30    $ 18.80    $ 19.30
End of 6 Months Worked      $ 17.60    $ 18.05    $ 18.50    $ 19.00    $ 19.50
End of 12 Months Worked     $ 17.75    $ 18.20    $ 18.65    $ 19.15    $ 19.65
End of 18 Months Worked     $ 17.90    $ 18.35    $ 18.80    $ 19.30    $ 19.80
End of 24 Months Worked     $ 18.10    $ 18.55    $ 19.00    $ 19.50    $ 20.00
End of 30 Months Worked     $ 18.25    $ 18.70    $ 19.15    $ 19.65    $ 20.15
End of 36 Months Worked     $ 18.45    $ 18.90    $ 19.35    $ 19.85    $ 20.35
End of 42 Months Worked     $ 18.60    $ 19.05    $ 19.50    $ 20.00    $ 20.50
End of 48 Months Worked     $ 18.80    $ 19.25    $ 19.70    $ 20.20    $ 20.70
</TABLE>


Requires satisfactory progress in each 6 month period worked in above designated
classifications.





                                       24
<PAGE>   28

                                                November 22, 1999





Mr. J. C. Todd
International Representative
International Brotherhood of Boilermakers
Cement, Lime, Gypsum and Allied Workers Division
80 Sweetbriar Trail
Fayetteville, GA  30215

Dear J. C.:

When bargaining unit employees are working side-by-side with outside contractors
and there is a need to work overtime to continue or complete the job, the
bargaining unit employees will be offered the overtime to work with the outside
contractors provided they are qualified to perform the work.

                                                Sincerely,



                                                Bernard M. Reuland
                                                Director, Employee Relations

BMR:lav

cc:      S. E. Tomlinson
         P. J. McIntyre
         T. E. McCoy





                                       25
<PAGE>   29

                                                November 22, 1999


                                                LETTER OF UNDERSTANDING
                                                CURRENT PRACTICES


Mr. J. C. Todd
International Representative
International Brotherhood of Boilermakers
Cement, Lime, Gypsum and Allied Workers Division
80 Sweetbriar Trail
Fayetteville, GA  30215

Dear J. C.:

This will confirm our discussions during 1999 contract negotiations. The Company
will continue our current policies regarding safety procedures, uniforms, and
employee travel expenses at our Louisville and Quarry operations during the life
of this Agreement for the following:

o   Supply to employees personal protective safety equipment required by the
    Company such as hard hats, safety shoes not to exceed two (2) pairs per year
    up to $220 per year, hearing protection, safety glasses, and respirators.
    Effective May 1, 2002 the safety shoe allowance will not exceed $230 per
    year.

o   License for reimbursement for blasting and welding certification as required
    by the Company.

o   Current uniform arrangements.

o   Reasonable reimbursement for meals and other expenses while traveling on
    Company business.

                                                Sincerely,


                                                B. M. Reuland
                                                Director, Employee Relations

BMR:lav

cc:      T. E. McCoy
         P. J. McIntyre
         S. E. Tomlinson




                                       26
<PAGE>   30

                                              November 22, 1999



                                              SENIORITY PROVISIONS FOR SAME DATE
                                              HIRE AND PROSPECTIVE EMPLOYEES



Mr. J. C. Todd
International Representative
International Brotherhood of Boilermakers
Cement, Lime, Gypsum and Allied Workers Division
80 Sweetbriar Trail
Fayetteville, GA  30215

Dear J.C.:

Confirming our Agreement reached during the Kosmos negotiations in Louisville,
Kentucky, the initial plant seniority roster as referenced in Article 14.6 of
the Labor Agreement will be ranked in seniority order by the lottery system for
current employees hired on the same date. This seniority roster will be used for
prospective application of provisions in the Labor Agreement.

Prospective same date hires will be placed on the seniority list according to
the date and time of their initial employment application.

                                              Sincerely,



                                              Bernard M. Reuland
                                              Director, Employee Relations

BMR:lav

cc:      T. E. McCoy
         P. J. McIntyre
         S. E. Tomlinson




                                       27
<PAGE>   31


                                                November 22, 1999

Mr. J. C. Todd
International Representative
International Brotherhood of Boilermakers
Cement, Lime, Gypsum and Allied Workers Division
80 Sweetbriar Trail
Fayetteville, GA  30215

Dear J. C.:

This will confirm our discussion during 1999 negotiations covering Louisville
Operations regarding the Dispute Resolution Panel.

The Parties agree to select by mutual agreement three (3) impartial
representatives who will be available to serve for the term of this Agreement
for a reasonable fee when called upon to serve on the Panel. When necessary for
the Panel to meet to resolve a grievance in accordance with Article 10.1(4), the
Parties will mutually select one of these impartial representatives to serve on
the Panel.

It is understood that following the discussions and hearing of the grievance,
the Panel will determine the outcome of the grievance. The outcome of the
grievance will be determined by majority vote of the Panel and communicated by a
brief written description of the disposition of the grievance by the impartial
representative. The individual vote of the Panel will not be disclosed, only the
fact that a majority was reached. If additional information is needed prior to
making a determination on the result of the grievance, it must be gathered and
the decision will be made within three (3) working days. The Company or Union
representatives may call upon various witnesses to be present at the hearing and
the cost incurred or lost-time pay involved for the witness will be the
responsibility of the Party calling the witness.

The Company or Union Representative may cancel the use of any third party
representative with thirty (30) days notice to the other Party and another
impartial representative will be selected in accordance with the above.

                                                Sincerely,


                                                Bernard M. Reuland
                                                Director, Employee Relations

BMR:lav

cc:      T. E. McCoy
         P. M. McIntyre
         S. E. Tomlinson





                                       28
<PAGE>   32

                                                November 22, 1999

                                                LETTER OF UNDERSTANDING

Mr. J. C. Todd
International Representative
International Brotherhood of Boilermakers
Cement, Lime, Gypsum and Allied Workers Division
80 Sweetbriar Trail
Fayetteville, GA  30215

Dear J.C.:

    At the request of either party, an employee discharge grievance may be
appealed to arbitration. In the event the parties are unable to agree upon an
Arbitrator within seven (7) days after arbitration is invoked, then they shall
jointly petition the Federal Mediation and Conciliation Service, which shall
submit a panel of seven (7) qualified arbitrators, and the parties shall select
a single arbitrator from such panel. The arbitrator shall be appointed by mutual
consent of the parties hereto. If the arbitrators included in this panel are
unacceptable to either party, a second panel shall be requested from the Federal
Mediation and Conciliation Service and a single arbitrator selected from this
panel.

    Any grievance referred to arbitration shall be heard as soon as possibly and
a decision rendered within thirty (30) days of the hearing or the date of the
postmark of the post hearing briefs, provided the parties mutually agree to
submit post hearing brief. The Arbitrator shall have no power to add or subtract
from or change or modify or amend any provisions of this Agreement.

    The decision rendered by the Arbitrator will be final and binding upon the
Union, the Company, the grievant, and all employees covered by this Agreement.
The arbitrator selected pursuant to this Article shall interpret and apply the
terms of this Agreement; he/she shall not substitute his/her discretion and
judgement for that of the Company.

    It is expressly agreed that no arbitrator shall have the authority to decide
any matter involving the exercise of a right reserved to management under this
Agreement.

    Each party hereto shall pay the expense incurred in the presentation of its
own case, and the expenses incident to the services of the Arbitrator, including
the cost of the transcript and hearing room, shall be paid by the party
requesting arbitration.

                                                Sincerely,


                                                Bernard M. Reuland
                                                Director, Employee Relations

BMR:lav

cc:      T. E. McCoy
         P. J. McIntyre
         S. E. Tomlinson




                                       29
<PAGE>   33


                                               November 22, 1999


                                               LETTER OF UNDERSTANDING - WORKING
                                               SPOUSE



Mr. J. C. Todd
International Representative
Cement, Lime, Gypsum, and Allied Workers Division
International Brotherhood of Boilermakers
80 Sweetbriar Trail
Fayetteville, GA  30215

Dear J. C.:

Pursuant to our discussions during the 1999 Kosmosdale Labor Contract
negotiations, if an employee's spouse is eligible for health care coverage under
another employer's group health plan, that spouse will not be eligible to
participate in the Southdown Medical Plan. If the premium which the spouse is
required to pay exceeds $30.00 per month for individual coverage under that
plan, the Company will offset the cost in excess of $30.00 per month by reducing
the employee" monthly contribution to the Southdown Plan. The offset will not be
greater than the total monthly premium the employee is required to pay for the
Southdown Plan. Affected employees will provide reasonable documentation to
substantiate the cost of spousal coverage.

                                               Sincerely,



                                               Bernard M. Reuland
                                               Director, Employee Relations

BMR:lav

cc:      T. E. McCoy
         P. J. McIntyre
         S. E. Tomlinson




                                       30
<PAGE>   34

                                                November 22, 1999


                                                LETTER OF UNDERSTANDING -
                                                LEADPERSONS


Mr. J. C. Todd
International Representative
Cement, Lime, Gypsum, and Allied Workers Division
International Brotherhood of Boilermakers
80 Sweetbriar Trail
Fayetteville, GA  30215

Dear J.C.:

LEADPERSONS

The term "leadperson" as used herein refers to a job on which the employee has
the responsibility of directing the work of a group of employees working side by
side of the group directed. The direction generally consists of activities such
as the following:

Plan work to be performed by the group.
Determine "on the job" working procedures.

1. Arrange for necessary tools, supplies, facilities and paperwork.

2. Relay instructions from the supervisor.

3. Report unsafe conditions to the supervisor.

Such activities do not include any disciplinary action nor mandatory overtime
scheduling.

                                                Sincerely,


                                                Bernard M. Reuland
                                                Director, Employee Relations

BMR:lav

cc:      T. E. McCoy
         P. J. McIntyre
         S. E. Tomlinson




                                       31
<PAGE>   35

                                                November 22, 1999


                                                LETTER OF UNDERSTANDING
                                                TEMPORARY UPGRADES




Mr. J. C. Todd
International Representative
International Brotherhood of Boilermakers
Cement, Lime, Gypsum and Allied Workers Division
80 Sweetbriar Trail
Fayetteville, GA 30215

Dear J.C.:

This will confirm our discussions during 1999 contract negotiations.

Employees with Department of Labor Journeyman's Certificates that do not hold
permanent positions in job classifications covered by the Journeyman's
Certificate, shall receive the journeyman rate when temporarily upgraded to
these job classifications.

Skilled Repairmen in progression shall receive the 42 month rate when working on
outages for only the hours worked while employees outside the classification are
temporarily upgraded to the 42 month rate and are working side by side with the
outage crew. An outage for the purpose of this letter is defined as a period of
time when the kiln is not producing clinker.

                                                Sincerely,



                                                Bernard M. Reuland
                                                Director, Employee Relations


BMR:lav

cc:      T. E. McCoy
         P. J. McIntyre
         S. E. Tomlinson




                                       32