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                                                                   Exhibit 10.17


                                    AGREEMENT

        AGREEMENT dated May 1, 1998 between GENEVA STEEL (the "Company") and
UNITED STEELWORKERS OF AMERICA, on behalf of Local Union 2701 hereinafter
referred to as the "Union", providing for industrial relations at the Company's
Geneva, Utah steel operations (the "Geneva Plant") and certain other matters as
set forth herein.

                                    ARTICLE 1

                            APPLICATION OF AGREEMENT

SECTION 1 -- PURPOSE AND INTENT OF THE PARTIES.

        A. Matters of Employment: It is the intent and purpose of the parties
hereto to set forth herein the agreement between them in respect to rates of
pay, hours of work, and other conditions of employment in the Geneva Plant and
certain other matters as set forth herein.

        B. Basis of Claims: The provisions of this Agreement constitute the sole
procedure for the processing and settlement of any claim by an employee (as
defined below) or the Union of the violation by the Company of this Agreement.
As the representative of the employees, the Union may except as provided in
Article 16, Section 4.C. initiate and process grievances through the grievance
procedure, including arbitration, in accordance with this Agreement, or adjust
or settle the same.

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

        D. Nondiscrimination: It is and shall be the policy of the Company and
the Union that the provisions of this Agreement shall be applied to all
employees and applicants without regard to race, color, religious creed,
national origin, sex, age, disability, Veteran or special disable Veteran
status, or membership in the Union.

SECTION 2 -- UNIT COVERAGE.

        A. Membership: The bargaining unit at the Geneva Plant, and the term
"employee(s)" as used herein, shall include all production, maintenance, pipe
mill, quarry and certain salaried clerical and technical employees of the
Company for whom the Union is currently certified by the National Labor
Relations Board as the exclusive collective-bargaining representative, and shall
exclude all executives, office employees, managers, division managers, area
managers, foremen, shift managers, supervisors, draftsmen, timekeepers, watchmen
and guards, full-time first-aid and safety employees, and all similar or other
jobs not currently included in the bargaining unit. The



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term "Geneva Plant" shall not include the 40" blooming mill, and the structural
mill which have been shut down.

        B. Dispute of Coverage: Any difference which shall arise between the
Company and the Union as to whether or not an individual employee is or is not
included within the bargaining unit shall be handled as a grievance in
accordance with the procedures set forth in Article 16 hereof.

SECTION 3 -- CONTRACTING OUT

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

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

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

B.      Exceptions:

        1.     Work in the Plant

               a.     Production, service, all maintenance and repair work, all
                      installation, replacement and reconstruction of equipment
                      and productive facilities, other than that listed in
                      Subparagraph B1.b. below, all within a Plant, may be
                      contracted out if (i) the consistent practice has been to
                      have such work performed by employees of contractors and
                      (ii) it is more reasonable (within the meaning of
                      paragraph C below) for the Company to contract out such
                      work than to use its own employees.

               b.     Major new construction including major installation, major
                      replacement and major reconstruction of equipment and
                      productive facilities, at the Plant may be contracted out.
                      A project shall be deemed major so as to fall within the
                      scope of this exception if it is shown by the Company that
                      the project is of a grander or larger scale when compared
                      to other projects bargaining unit forces at the Plant are
                      normally expected to do. Such comparison should be made in
                      light of all relevant factors. However, in making such
                      comparison, there shall be no bundling of historically
                      distinct

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                      projects into single projects of major new construction
                      (including major installation, major replacement and major
                      reconstruction of equipment and production facilities) nor
                      any compression of historically distinct projects into a
                      continuous time period.

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

        2.     Work Outside the Plant

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

                      Notwithstanding the above, the Company may purchase
                      standard components or parts or supply items, produced for
                      sale generally ("shelf items"). No items shall be deemed a
                      standard component or part or supply item if (i) its
                      fabrication requires the use of prints, sketches or
                      manufacturing instructions supplied by the Company or at
                      its behest or it is otherwise made according to Company
                      specifications or (ii) it involves the purchase of motors,
                      transmissions, convertors or other items under a core
                      exchange, replacement or trade-in transaction (whether or
                      not title to the unit passes to the vendor/purchaser as
                      part of the transaction).

               b.     Production work may be performed outside the Plant only
                      where the Company demonstrates that it is unable because
                      of lack of capital to invest in necessary equipment or
                      facilities, and that it has a continuing 

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                      commitment to the steelmaking business. In determining
                      whether there is capital to invest in particular equipment
                      or facilities, the Company is entitled to make reasonable
                      judgments about the allocation of scarce capital resources
                      among its Plants represented by the Union and their
                      supporting facilities.

        3.     Mutual Agreement

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

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

        1.     Whether the bargaining unit will be adversely impacted.

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

        3.     Desirability of recalling employees on layoff.

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

        5.     Availability of adequate qualified supervision.

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

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

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

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


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

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

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

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

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

D.      Contracting Out Committee:

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

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

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

E. Notice and Information: Before the Company finally decides to contract out an
item of work as to which it claims the right to contract out, the Union
committee members will be notified. Except as provided in Paragraph J below
(Shelf Item Procedure) such notice will be given in sufficient time to permit
the Union to invoke the Expedited Procedure described in Paragraph H below,
unless emergency situations prevent it. Such notice shall be in writing and
shall be sufficient to advise the Union members of the committee of the
location, type, scope, duration and timetable of the work to be performed so
that the Union members of the committee

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can adequately form an opinion as to the reasons for such contracting out. Such
notice shall generally contain the information set forth below:

        1.     Location of work.

        2.     Type of work:

               a.     Service
               b.     Maintenance
               c.     Major Rebuilds
               d.     New Construction

        3.     Detailed description of the work.

        4.     Crafts or occupations involved.

        5.     Estimated duration of work.

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

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

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


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

F. Remedy for Repeated Notice Violations: Notwithstanding any other provision of
this Agreement, where, at a particular Plant, it is found that the Company (i)
committed violations of Paragraph E that demonstrate willful conduct in
violation of the notice provision or constitutes a pattern of conduct of
repeated violations or (ii) violated a cease and desist order previously issued
by an Arbitrator in connection with a violation of paragraph E the Arbitrator
may, as circumstances warrant, fashion a suitable remedy or penalty.

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

        If the matter is not resolved, or if no discussion is held, the dispute
may be processed further (i) by filing a grievance relating to such matter under
the complaint and grievance procedure described in the Labor Agreement; or (ii)
by submitting the matter to the Expedited Procedure set out in Paragraph H
below.

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

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



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        2.     Within three (3) days (excluding Saturdays, Sundays and holidays)
               after either the Union or Company members of the committee
               determine that the committee cannot resolve the dispute, either
               party (Chairman of the Grievance Committee in the case of the
               Local Union and the Manager of Labor Relations in the case of the
               Company) may advise the other in writing that it is invoking this
               Expedited Procedure.

        3.     An expedited arbitration must be scheduled within three (3) days
               (excluding Saturdays, Sundays and holidays) of such notice and
               heard at a hearing commencing within five (5) days (excluding
               Saturdays, Sundays and holidays) thereafter. The arbitrator
               selected from the Arbitration Panel shall hear the dispute and,
               if the arbitrator selected is not available to hear the dispute
               within five (5) days, another arbitrator shall be selected from
               the Arbitration Panel.

        4.     The arbitrator must render a decision within forty-eight (48)
               hours (excluding Saturdays, Sundays and holidays) of the
               conclusion of the hearing. Such decision may be cited as a
               precedent by either party in any future contracting out disputes.

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

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



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J.      Shelf Item Procedure:

        1.     No later than July 1, 1998, and, except as provided herein,
               annually thereafter, the Company shall provide the Union members
               of the committee with a list and description of anticipated
               ongoing purchases of each item which the Company claims to be a
               shelf item within the meaning of Paragraph B (2) a above. If the
               Union members of the committee so request, the list shall not
               include any item included on a previous list where the status of
               the items, as of that time, has been expressly resolved. Within
               sixty (60) days of the submission of the list, either the Union
               members of the committee or the Company members may convene a
               prompt meeting of the committee to discuss and review the list
               of items and, if requested, the facts underlying the Company's
               claim that such items are shelf items.

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

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

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

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

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K. Annual Review: Commencing on or before September 1, 1998 and on or before
September 1 of each year thereafter the Company committee members shall meet
with the Union committee members for the purpose of (i) reviewing all work
whether inside or outside the Plant which the Company anticipates may be
performed by outside contractors or vendors at some time during the following
Twelve (12) months, (ii) determining such work which should be performed by
Bargaining Unit employees and (iii) identifying situations where the elimination
of restrictive practices would promote the performance of any such work by
Bargaining Unit employees. The Union committee members shall be entitled in
conducting this study to review any current or proposed contracts concerning
items of work performed for the Company by outside contractors and vendors and
shall keep such information confidential. By no later than November 1, 1998 and
November 1 of each year thereafter the Local Union and Company committee members
shall jointly prepare a written report recording the results of this review.
Specifically, the report should list (a) all items of work which the parties
agree will be performed by Bargaining Unit employees during the following twelve
(12) calendar months, (b) all items of work which the parties agree should be
performed by outside contractors and vendors, and (c) those items on which the
parties disagree. If the parties disagree, the report will state the reason for
such disagreements.

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

M. The amount of overtime that has been worked by the employees or that may be
worked by the employees shall not be used as a justification for contracting
out.

SECTION 4 -- SUPERVISION.

        Supervisors at the plant shall not perform work on a job normally
performed by an employee; provided, however, this provision shall not be
construed to prohibit supervisors from performing the following types of work:

               1.     Experimental work.


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               2.     Demonstration work performed for the purpose of
                      instructing and training employees.

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

               4.     Work which under the circumstances then existing, would be
                      unreasonable to assign to an employee.

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

        If a supervisor performs work in violation of this Section 4 and the
employee who otherwise would have performed this work can reasonably be
identified, or in the event that the employee who otherwise would have performed
the work cannot be identified, the employee who initiated the grievance, the
Company shall pay such employee the applicable Regular Hourly Wage for the time
involved or for four (4) hours, whichever is greater.

                                    ARTICLE 2

                        RECOGNITION AND UNION MEMBERSHIP

SECTION 1 -- EXCLUSIVE BARGAINING AGENT.

        Subject to the provisions of the National Labor Relations Act, the
Company recognizes the Union as the exclusive representative of all of the
Bargaining Unit employees for the purposes of collective bargaining with respect
to rates of pay, hours of employment, or other conditions of employment.

SECTION 2 -- UNION MEMBERSHIP AND CHECKOFF.

        A. The Company will checkoff monthly dues, assessments and initiation
fees each as designated by the International Secretary-Treasurer of the Union,
as initiation or membership dues in the Union, on the basis of individually
signed voluntary checkoff authorization cards on forms agreed to by the Company
and the Union.

        B. At the time of employment, new employees will be provided the
opportunity to voluntarily execute an authorization for the check off of Union
dues, as they may or may not elect, on the form agreed upon. A copy of such
authorization card for the checkoff of Union dues shall be forwarded to the
Financial Secretary of the Local Union along with the membership application of
such employee.

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        C. New checkoff authorization cards other than those provided for by
Paragraph B above will be submitted to the Company on summary lists through the
Financial Secretary of the Local Union as executed by new employees.

        D. Deductions on the basis of authorizations cards submitted to the
Company shall commence with respect to dues for the month in which the Company
receives such authorization card or in which such card becomes effective,
whichever is later. Dues for a given month shall be deducted from the first pay
closed and calculated in the succeeding month.

        E. In cases of earnings insufficient to cover deduction of dues, the
dues shall be deducted from the next pay in which there are sufficient earnings,
or a double deduction may be made from the first pay of the following month,
provided, however, that the accumulation of dues shall be limited to two (2)
months. The International Secretary-Treasurer of the Union shall be provided
with a list of those employees for whom a double deduction has been made.

        F. The Union will be notified of the reason for non-transmission of dues
in case of layoff, discharge, resignation, leave of absence, sick leave,
retirement, death, or insufficient earnings.

        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 by notation on the lists referred to in
Paragraph C of this Section, and assessments as designated by the International
Secretary-Treasurer.

        G. The Company will implement the dues checkoff provisions of this
Collective Bargaining Agreement in accordance with the Constitution of the
International Union pursuant to reasonable instructions to be supplied by the
Union.

        H. The Union shall indemnify and save the Company harmless against any
and all claims, demands, suits or other forms of liability that shall arise out
of or by reason of action taken or not taken by the Company for the purpose of
complying with any of the provisions of this Section, or in reliance on any
list, notice or assignment furnished under any of such provisions.

                                    ARTICLE 3

                                  RATES OF PAY

SECTION 1 -- STANDARD HOURLY WAGE SCALE.

        A. Wage Rates: The standard hourly wage scale rate for each job shall be
as set forth in Appendix A of this Agreement and is recognized as the
established regular rate of pay for all



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hours of work. As used in this Agreement, the term "Regular Hourly Wage" shall
mean the regular hourly wage rates set forth in Appendix A, without adjustment
for overtime, premiums or shift differentials.

        B. Apprentice Training: At such time as all trade and craft job
descriptions are agreed to and installed, a joint committee not to exceed four
(4) members, two (2) each from the Company and the Union, shall be formed to
develop an apprentice training program. The committee will be responsible for
such things as composing the course curriculum, defining training periods, and
coordinating with educational institutions. Apprentice vacancies will be posted
at the Step 3 level and awarded consistent with Article 8, Seniority.

        C. Job Classifications: All jobs shall be described and classified by
Management. The job description and classification for each job in effect shall
continue in effect unless (1) Management changes the job content (requirements
of the job as to the training, skill, responsibility, effort and working
conditions) to the extent of one (1) full job class or more; (2) the job is
terminated or not occupied during a period of one (1) year; or (3) the
description and classification are changed by the mutual agreement of the
officially designated representative of the Company and the Union. The Local
Union Rate Committee will be involved in the development and implementation of
all new job classifications and job descriptions. The Plant Union Committee and
Management shall discuss and determine the accuracy of all job descriptions. The
Union shall be responsible for the filing of grievances in a timely fashion (30
days).

        All jobs shall be described and classified by Management, taking into
account, without being bound by, the information set forth in the manual for job
classifications of production and maintenance jobs dated August 1, 1971.

SECTION 2 -- SHIFT DIFFERENTIALS

        A. Wage Differential: For hours worked on the afternoon shift, there
shall be paid a premium rate of $.18 per hour. For hours worked on the night
shift, there shall be a paid premium rate of $.27 per hour.

        B.     Applicable Hours:

               1.     For the purpose of applying the aforementioned shift
                      differentials, an employee will be paid the shift
                      differential for all hours that are worked on the
                      afternoon shift at the afternoon shift rate of pay and/or
                      the night shift at the night shift differential rate (as
                      the case may be).

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

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

               1.     Day Shift includes all hours worked between the hours of
                      8:00 a.m. and 4:00 p.m.

               2.     Afternoon Shift includes all hours worked between the
                      hours of 4:00 p.m. and 12:00 midnight.

               3.     Night Shift includes all hours worked between the hours of
                      12:00 midnight and 8:00 a.m.

SECTION 3 -- SUNDAY PREMIUM

        An employee shall be paid a premium of 1-1/4 times his Regular Hourly
Wage as defined in Paragraph 1A above for all hours worked on Sunday which are
not paid for on an overtime basis. For the purpose of this provision, Sunday
shall be deemed to be the twenty-four (24) hours beginning with the
shift-changing hour nearest to 12:01 a.m. Sunday.

                                    ARTICLE 4

                           HOURS OF WORK AND OVERTIME

SECTION 1 -- NORMAL HOURS OF WORK.

        A. The normal workday shall be eight (8) hours of work in a twenty-four
(24) hour period. The hours of work shall be consecutive. The normal work
pattern shall be five (5) consecutive workdays beginning on the first of any
seven (7) consecutive-day period. The seven (7) consecutive-day period is a
period of 168 consecutive hours and may begin on any day of the calendar week
and extend into the next calendar week. On shift changes, the 168 consecutive
hours may become 152 consecutive hours depending upon the change in the shift. A
work pattern of less or more than five (5) workdays in the seven (7)
consecutive-day period shall not be considered as deviating from the normal work
pattern provided the workdays are consecutive. The Company and the Union may
agree to a regular work schedule which is not in accordance with this Paragraph
1A, however, any such schedule shall be deemed as normal hours of work.

        B. Schedules: All employees shall be scheduled on the basis of the
normal work pattern except where; (a) such schedules regularly would require the
payment of overtime; (b) deviations from the normal work pattern are necessary
because of breakdowns or other matters beyond the control of Management; or (c)
schedules deviating from the normal work pattern are established by agreement
between plant management and the grievance committee. Schedules showing
employees' workdays shall be posted or otherwise made known to employees in
accordance with the prevailing practices but no later than Thursday of the week
preceding the calendar week in which the schedule becomes effective unless
otherwise provided by local

                                       14

<PAGE>   15



agreement. Management will establish a procedure, where such does not already
exist, affording any employee whose last scheduled turn ends prior to the
posting of his schedule for the following week, an opportunity to obtain
information relating to his next scheduled turn. This procedure will also be
applicable with respect to employees returning from vacation. Schedules may be
changed by Management at any time provided, however, that any changes made after
Thursday of the week preceding the calendar week in which the changes are to be
effective shall be explained at the earliest practicable time to the grievance
committeemen of the employee affected; and provided further that, with respect
to any such schedules, no changes shall be made after Thursday except for
breakdowns or other matters beyond the control of Management. Should changes be
made in schedules contrary to this paragraph so that an employee is laid off and
does not work on a day that he was scheduled to work, he shall be deemed to have
reported for work on such day and shall be eligible for reporting allowance in
accordance with the provisions of Section 5 of this Article 4. Should changes be
made in schedules contrary to the provisions in Paragraph B (Schedules) so that
an employee is laid off on any day within the five (5) scheduled days and is
required to work on what would otherwise have been the sixth or seventh workday
in the schedule on which he was scheduled to commence work, the employee shall
be paid for such sixth or seventh day worked at overtime rates in accordance
with Article 4, Section 3D.

        C. Definition of Terms: The payroll week shall consist of seven (7)
consecutive days beginning at 12:01 a.m. Sunday or at the turn-changing hour
nearest to that time. The workday for the purposes of this Section is the
twenty-four (24) hour period beginning with the time the employee begins work,
except that a tardy employee's workday shall begin at the time it would have
begun had he not been tardy. The regular rate of pay shall mean the hourly rate
which the employee would have received for the work had it been performed during
non overtime hours.

        D. Guarantee of Hours: The above provisions of this Section shall not be
construed as guaranteeing to any employee any number of hours of work per day or
per week. Employees shall not be guaranteed any number of hours of work except
to the extent provided in Section 5 of this Article 4.

SECTION 2 -- STARTING TIME.

        The starting time of regular turns at the Geneva Plant shall be
determined from time-to-time by Management, and Management shall make a positive
effort to give notice of any change in any such starting time.

SECTION 3 -- CONDITIONS UNDER WHICH OVERTIME RATES SHALL APPLY.

        Overtime at the rate of 1-1/2 times the regular rate of pay shall be
paid for in the following order:


                                       15

<PAGE>   16



        A. Hours worked in excess of eight (8) hours in a workday except as
provided in "E" below.

        B. Hours worked in excess of forty (40) hours in a payroll week.

        C. Hours worked on the sixth or seventh workday in a payroll week during
which work was performed on five (5) other workdays.

        D. Hours worked on the sixth or seventh workday of a seven (7)
consecutive-day period during which the first five (5) days were worked, whether
or not all of such days fall within the same payroll week, except when worked
pursuant to schedules mutually agreed to as provided for in Subsection A;
provided, however, that no overtime will be due under such circumstances unless
the employee notifies his foreman of a claim for overtime within a period of one
(1) week after such sixth or seventh day is worked and provided further that on
shift changes the seven (7) consecutive-day period of 168 consecutive hours may
become 152 consecutive hours depending upon the change in the shift. Payment of
overtime rates shall not be duplicated for the same hours worked, but the higher
of the applicable rates shall be used. Hours compensated for at overtime rates
shall not be counted further for any purpose in determining overtime liability.

        E. Employees may be provided with an opportunity to work a
nontraditional schedule of four (4) twelve-hour days on and four (4) twelve-hour
days off or four (4) ten-hour days on and four (4) ten-hour days off (or such
other nontraditional schedule as the Company and Union may mutually agree to).
In such cases, employees who are to be covered by such a schedule may request a
vote to determine whether the schedule proposed by Management is to be
implemented. Should two-thirds of employees vote to approve the schedule, it
will be implemented, subject to thirty (30) days written notice of cancellation
by the Union. Nothing in this Section 3E shall be construed as restricting
Management's right at any time to replace these schedules with a schedule based
on the normal work pattern.

The following rules shall apply to the payment of overtime, holiday and premium
pay to employees:

               1.     Overtime compensation at the rate of one and one-half
                      times the regular rate of the job worked shall be paid for
                      hours worked in excess of the agreed to hours scheduled on
                      any wok day, but in any event overtime shall be paid for
                      hours worked over forty (40) in a payroll week.

               2.     Shift differential will be paid consistent with the
                      provisions of Article 3, Section 2 of this Agreement.

               3.     Funeral and jury/witness pay shall be paid according to
                      the hours of work scheduled on the eligible days.



                                       16

<PAGE>   17



               4.     An unworked Holiday that falls on one (1) of the
                      employee's regularly scheduled days shall generate the
                      equivalent number of hours of pay as was scheduled on the
                      Holiday. An unworked Holiday that falls on an unscheduled
                      day shall generate eight (8) hours of pay at the Regular
                      Hourly Wage Rate. All hours actually worked on a Holiday
                      shall be compensated in accordance with Article 5, Section
                      2B of the Agreement.

               5.     Employees working a non-traditional schedule will not be
                      required to work more that sixteen (16) hours in a
                      twenty-four (24) hour period. To aid in this commitment,
                      covered employees should make every effort to cover
                      vacancies created by sickness or absenteeism.

               6.     Covered employees will be permitted to schedule their
                      vacations from days off to days off rather than on a
                      calendar week basis.

        Except as expressly provided for above, all other rules and procedures
relating to the payment of overtime, holiday and premium pay, as contained in
this Agreement shall apply regardless of whether an employee is working an eight
(8) hour shift or more than eight (8) hours.

        F.     Overtime

               1.     The parties recognize that schedules that regularly
                      require overtime over extended periods are undesirable and
                      should not be used solely for the purpose of preventing
                      the recall of laid-off or demoted employees.

                2.    When employees qualified to perform the work could be
                      recalled because it is reasonably foreseeable that there
                      will be work for such employees for a period of two (2)
                      or more weeks, and Management determines that such work
                      should nevertheless be done on an overtime basis instead
                      of recalling such employees, it will first notify the
                      Union and, upon the request of the appropriate grievance
                      committeeman, will discuss its reasons and review with
                      him any suggested alternative in an effort to reach a
                      mutually satisfactory solution. Such discussions and
                      review will constitute full compliance with the
                      requirements of this Section.

               3.     Nothing in Subsection 1 and 2 above shall prejudice any
                      other rights which may exist under any other provision of
                      the agreement, nor affect local agreements existing as of
                      the date of this Agreement

               4.     Where local agreements with respect to the distribution of
                      overtime do not presently exist, the local plant
                      management and the local union grievance committee should
                      conclude promptly an agreement providing for the most

                                       17

<PAGE>   18



                      equitable overtime distribution consistent with the
                      efficiency of the operation.

SECTION 4 -- HOLIDAY LIABILITY.

        Hours compensated at overtime rates shall not be counted further for any
purpose in determining overtime liability under the same or any other provision
of this Agreement; provided, however, that a holiday whether worked or not,
shall be counted for purposes of computing overtime liability under this
Article.

SECTION 5 -- REPORTING PAY.

        If an employee shall be required by Management to report for
regularly-scheduled or call-out work on any day and he shall report at the time
and place he was required to report, he shall be paid a minimum of four (4)
hours pay at the Regular Hourly Wage which would have been applicable had he
worked such four (4) hours in the assignment for which he was required to
report. If there is no work available on the job for which the employee was
scheduled or called out, the employee shall be paid at such Regular Hourly Wage
for which the employee was scheduled or called out, provided such employee shall
accept other job assignments for which he is qualified or forfeit the reporting
pay provided herein.

SECTION 6 -- ABSENTEEISM.

        Whenever an employee has just cause for reporting late or absenting
himself from work, he shall, whenever practicable, give notice as far in advance
as possible to his supervisor or through another person or system to be
designated by the Company to receive such notice.




                                       18

<PAGE>   19


                                    ARTICLE 5

                                    HOLIDAYS

SECTION 1 -- DAYS.

        Whenever used in this Agreement the term "holiday" means one of the
following days:

<TABLE>
<CAPTION>
        1998                                       1999
        ----                                       ----
<S>                                                <C>

        New Year's Day                             New Year's Day
        Memorial Day                               Good Friday
        July 4th                                   Memorial Day
        July 24th                                  July 4th
        Labor Day                                  July 24th
        Thanksgiving                               Labor Day
        Christmas Eve                              Thanksgiving
        Christmas Day                              Christmas Eve
                                                   Christmas Day
</TABLE>


<TABLE>
<CAPTION>
        2000                                       2001
        ----                                       ----
<S>                                                <C>

        New Year's Day                             New Year's Day
        Memorial Day
        July 4th
        July 24th
        Labor Day
        Thanksgiving
        Christmas Eve
        Christmas Day
        (1) To Be Determined
</TABLE>

        If any of such holidays shall fall on a Sunday, the following Monday
(and not such Sunday) shall be observed as such holiday. For purposes of this
Article, a holiday shall be deemed to be the twenty-four (24) hours beginning
with the shift-changing hour nearest to 12:01 a.m. on the day of the holiday.

SECTION 2 -- HOLIDAY PAY.

        A. An eligible employee who does not work on a holiday shall be paid
eight (8) times the employee's Regular Hourly Wage, which shall mean the hourly
rate which the employee

                                       19

<PAGE>   20



would have received for the work had it been performed during regular,
non-overtime hours; provided, however, that if an eligible employee is scheduled
to work on any such holiday, but fails to report and perform his scheduled or
assigned work, he shall become ineligible to be paid for the unworked holiday,
unless he has failed to report or perform such work because of verified sickness
or because of a death in the immediate family (father, mother, father-in-law,
mother-in-law, son-in-law, daughter-in-law, children, brothers, sisters, spouse
or grandparents) or similar good cause approved in advance by the Company.

        B. An employee who has worked thirty (30) shifts since his last hire and
who actually works on a holiday shall be paid for all time worked at an overtime
rate of 2-1/4 times the Regular Hourly Wage of the job worked.

        C. As used in this Article, an eligible employee is one who:

               1.     Has worked thirty (30) shifts since his last hire;

               2.     Performs work or is on vacation in the pay period in
                      which the holiday is observed; and

               3.     Works both on his last scheduled work day prior to and on
                      his first scheduled work day following the day on which
                      the holiday is observed, unless excused.

SECTION 3 -- VACATION AND HOLIDAY PAY.

        An eligible employee who would otherwise be entitled to pay for an
unworked holiday and who shall be scheduled pursuant to the provisions of
Article 6 to take a vacation during a period when the holiday occurs, shall be
paid for the unworked holiday in addition to his vacation pay.

                                    ARTICLE 6

                                    VACATIONS

SECTION 1 -- VACATION BENEFITS.

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



                                       20

<PAGE>   21

<TABLE>
<CAPTION>
        Years of Service                    Weeks of Vacation
        ----------------                    -----------------
<S>                                         <C>

        1 year but less than 3                     1
        3 years but less than 10                   2
        10 years but less than 17                  3
        17 years but less than 25                  4
        25 years or more                           5
</TABLE>

SECTION 2 -- EMPLOYEE ELIGIBILITY.

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

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

        B. Not have been absent from work for six (6) consecutive months or more
in the preceding calendar year; except that in the case of an employee who
completes one (1) year of continuous service in the vacation calendar year, he
shall not have been absent from work for six (6) consecutive months or more
during the twelve (12) months following the date of his original employment;
provided, that an employee with more than one (1) year of continuous service
who, in any year, shall be ineligible for a vacation by reason of the provisions
of this paragraph as a result of an absence on account of layoff or illness
shall receive one (1) week's vacation with pay in such year if he shall not have
been absent from work for six (6) consecutive months or more in the twelve (12)
consecutive calendar months next preceding such vacation. Any period of absence
of an employee while absent due to a compensable industrial disability or
military service in the year in which he incurred such disability, shall be
deducted in determining the length of period of absence from work for the
purpose of Article 6, Section 2. The period of a scheduled vacation taken by an
employee while he is on layoff shall be deducted in determining the length of
the period of absence from work during such layoff for the purposes of this
Paragraph B.

        Any employee, even though otherwise eligible under this Article,
forfeits the right to receive vacation benefits under this Article if he quits,
retires, or is discharged prior to January 1 of the vacation year.

        For purposes of calculating vacation benefits, continuous service shall
include credit for previous employment by United States Steel Corporation
("USS") at the Geneva Plant and shall date from the later of (1) the date of
first employment or (2) date of re-employment following a break in continuous
service.

        Should an active employee die on or before June 30 in any calendar year,
his estate will be compensated for any unexpended vacation earned in that year
in addition to half of the succeeding year's vacation entitlement. Should the
death occur after June 30, his estate will

                                       21

<PAGE>   22


again be entitled to any unexpended vacation as well as full vacation
entitlement for the succeeding year.

SECTION 3 -- SCHEDULING OF VACATIONS.

        Vacations will, so far as practicable, be granted at times most desired
by employees (longer service employees being given preference as to choice); but
the final right to allot vacation periods and to change such allotments is
exclusively reserved to the Company in order to insure the orderly operation of
the plant. As soon as possible after January 1st of each year, the Company shall
post a vacation schedule. In case the Company desires to schedule regular
vacations for employees eligible during a shutdown period instead of in
accordance with the previously established vacation schedule, the Company will
give affected employees not less than forty-five (45) days notice of such
intent; in the absence of such notice, an affected employee shall have the
option to take his regular vacation during the shutdown period, or to be laid
off during the shutdown and to take his regular vacation at the previously
scheduled time. Management agrees to keep the vacation groupings the same as
they were for the 1998 vacation year. In the event the conditions change which
may affect the vacation groupings (i.e. combining lines of progression, jobs,
etc.), the Union agrees to discuss changing the groupings to insure the
efficient operation of the plant.

SECTION 4 -- VACATION PAY COMPUTATION.

        Each employee granted a vacation will be paid at his average rate of
earnings per hour for the prior calendar year. Average rate of earnings per hour
shall be computed by:

        A. Totaling (1) pay received for all hours worked (total earnings
excluding premium of overtime, holiday, Sunday, and shift differential), (2)
vacation pay including pay in lieu of vacation, and (3) pay for unworked
holidays, and

        B. Dividing such earnings by the total of (1) hours worked, (2) vacation
hours paid for, including hours for which pay in lieu of vacation was paid, and
(3) unworked holiday hours which were paid for.

        Hours of vacation pay for each vacation week shall be the average hours
per week worked by the employee in the prior calendar year. Any weeks not having
thirty-two (32) hours of actual work shall be excluded from the calculation.
Average hours per week worked shall be computed by dividing such hours by the
number of such weeks in which thirty-two (32) or more hours were worked.

        The minimum number of hours paid for each week of vacation shall be
forty (40) and the maximum number of hours paid for each week of vacation shall
be forty-eight (48).


                                       22

<PAGE>   23



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

        Where an employee transfers from one (1) seniority unit to another
subsequent to January 1st in any given year, he shall take his vacation in
accordance with the schedule established in his old seniority unit except as
orderly operations of his new seniority unit preclude it. He shall not be
entitled to have any vacation schedule previously established in his new
seniority unit changed because of his entry into that unit; should there be a
conflict between the transferred employee and an employee in the unit, the
employee in the unit shall retain his preference in competition with the
transferred employee regardless of continuous service.

                                    ARTICLE 7

                                PRIOR USS SERVICE

        Except as otherwise provided in this Agreement, in calculating
continuous service under any provision of this Agreement, prior United States
Steel Corporation ("USS") continuous service shall be counted.



                                       23

<PAGE>   24


                                    ARTICLE 8

                                    SENIORITY

SECTION 1 -- UNITS.

        Seniority shall be applied in the following departments:

COKE PLANT DEPARTMENT

        Coke and Coal Chemicals Products
        Coke and Coal Chemicals Maintenance

BLAST FURNACE DEPARTMENT

        Iron and Sinter Production
        Blast Furnace Maintenance

Q-BOP DEPARTMENT

        Steel Producing
        Steel Producing Maintenance
        Foundry

ROLLING MILL DEPARTMENT

        45" & 132" Rolling Mills, Pipe Mill and Finishing
        Rolling Mill Maintenance

CENTRAL MAINTENANCE AND TRANSPORTATION

        Central Maintenance
        Transportation and Yards

UTILITIES DEPARTMENT

        Utilities
        Utilities Maintenance

CASTER DEPARTMENT

        Caster Production
        Caster Maintenance


                                       24

<PAGE>   25



KEIGLEY QUARRY

        Keigley Quarry Products
        Keigley Quarry Maintenance

CLERICAL AND TECHNICAL

        Accounting
        Business Planning
        Quality Assurance
        Geneva Maintenance

Each seniority unit shall have its own seniority listing. All lines of
progression, including identification of entry level positions, shall be
established by mutual agreement. Should the Company and the Union fail to agree
at the department level, the disputed line of progression will be referred to
the parties responsible for grievance resolution at the second step. Should they
be unable to agree, the Union may process the dispute to arbitration.

SECTION 2 -- SENIORITY COMPUTATION.

        For the purposes of this Article 8, seniority shall be based upon Geneva
Plant continuous service, which shall include prior continuous service with USS,
and with the Company, at the Geneva Plant. In the event of a tie, the employee
with the lowest badge number will be given the highest seniority standing.

SECTION 3 -- FACTORS AFFECTING SENIORITY.

        In the promotion of employees to non-supervisory positions, and for the
purpose of demotions or layoff in connection with decreasing the work force, and
for the purpose of recalling to work of employees so laid off, the following
factors shall be considered, and if factors B and C are relatively equal, length
of continuous service shall govern:

        A. Length of continuous service;

        B. Ability to perform the work;

        C. Physical fitness.

Determination of these factors shall be subject to grievance.



                                       25

<PAGE>   26



SECTION 4 -- PROMOTION TO SUPERVISORY POSITIONS AND UNION LEAVE OF ABSENCE.

        A. SUPERVISORY POSITION: An employee who removes himself from the
bargaining unit by accepting a permanent job outside the bargaining unit shall
lose all seniority status in the bargaining unit.

        B. TEMPORARY ASSIGNMENT:

               a.     An employee who accepts a temporary job assignment or
                      temporary management position outside the bargaining
                      unit shall not lose any seniority status in the
                      bargaining unit provided such assignment does not exceed
                      a total of one (1) year and such additional days as may
                      be mutually agreed to by the Company and the Union.
                      After completing one (1) year on a job assignment
                      outside the bargaining unit, or such additional time
                      period as mutually agreed upon, a Bargaining Unit
                      employee must work at least four (4) consecutive weeks
                      (excluding vacation and sick leave) on a position
                      consistent with his seniority rights within the
                      bargaining unit before that individual may again be
                      assigned outside of the bargaining unit without loss of
                      seniority.

               b.     Employees assigned to temporary positions will be
                      identified as such on the weekly schedules in their home
                      department.

               c.     Should an employee accept a temporary job assignment or
                      temporary management position outside the bargaining unit,
                      he will become ineligible to compete inside the bidding
                      procedures for either permanent or temporary vacancies
                      which may become available within the bargaining unit
                      during the period such employee has accepted such
                      assignment or position.

                      Any temporary job assignment outside the bargaining unit
                      other than a temporary management position shall be
                      limited to a six (6) month time limit unless mutually
                      agreed to.

               d.     Such temporary foreman assignments shall be limited to:
                      (i) a foreman position resulting from increases in
                      operating requirements over and above normal levels (not
                      to exceed one (1) year unless mutually agreed to); (ii)
                      the short-term absence of a foreman for reasons such as
                      sickness, jury duty or vacation; and (iii) twenty-first
                      turn coverage on continuous operations.

               e.     Employees will be assigned as temporary foremen on a
                      weekly basis (except in the case of twenty first turn
                      coverage on continuous operations) and will not work in
                      the bargaining unit during the week in which they are



                                       26

<PAGE>   27



                      assigned as temporary foremen. Employees will not be
                      assigned as temporary foremen merely as a means of
                      retaining them in employment or of recalling them for
                      layoff at a time when the application of their bargaining
                      unit seniority would not otherwise result in their
                      retention in employment.

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

        C. UNION LEAVE: Leave of absence for a maximum of four (4) years will be
granted to members of the Union selected to work full time for the Union in an
official capacity, and the seniority of such employee shall be unbroken by such
leave of absence. Upon written request by the District Director, United
Steelworkers of America, and approval of the equivalent of the Company's Vice
President for Human Resources, or their respective designated representative,
leave of absence without loss of seniority will be granted.

SECTION 5 -- BREAK IN SERVICE.

        An employee's continuous service shall be broken and prior employment
not counted when:

        A. The employee voluntarily quits;

        B. The employee is discharged with just cause;

        C. The employee is terminated because he fails to promptly return when
recalled from layoff or to respond within three (3) working days of the date a
recall notice is delivered by (certified) mail to the employee's last address of
record. In the event the recall involved an anticipated continuous employment
period of two (2) weeks or less, the employee upon execution of a written waiver
with the Company may refuse recall and remain on layoff. The recall waiver shall
remain in effect until such time as either the employee revokes the waiver or he
is recalled by the Company for an anticipated continuous employment period
greater than two (2) weeks.

        D. The employee is absence due to layoff or disability for more than
forty-eight (48) months; provided, however, absence due to a compensable
disability incurred during the course of employment shall not break continuous
service if such employee returned to work within 



                                       27

<PAGE>   28


thirty (30) days after final payment of statutory compensation for such
disability or after the end of the period used in calculating a lump-sum
payment, as the case may be.

SECTION 6 -- SENIORITY OF UNION OFFICERS.

        Each member of the Grievance Committee and each employee who at the time
shall be the President or Vice President of the Union shall, for their
respective terms of office, have top seniority rights within his seniority unit
for the purposes of layoffs in connection with decreasing the work force within
such unit; provided, however, that such person shall not be retained in the
employ of the Company unless work which such person can perform is available in
such unit. Retention at work in accordance with this Section shall not enable
such employee to claim relative seniority status in excess of that which he
otherwise would have had prior to such retention. The local President and
Chairman of the Grievance Committee shall have top seniority rights within the
Plant to work which they can perform.

SECTION 7 -- INCUMBENCY.

        An employee who bids and has been assigned and regularly worked on a
permanent vacancy, and who has not voluntarily relinquished his rights to such
job, has incumbency rights on that job over other employees who have not held
and regularly worked that job on a permanent basis. When an employee is
displaced from his incumbent position due to a reduction in force and bids and
accepts another job within the plant, he does not waive his rights to the
incumbent position he held prior to being forced reduced. At the time the
incumbent position from which he has been forced reduced becomes available, he
must elect to return to that position when scheduled or give up all rights of
incumbency on that job. If the employee elects to return to his previous
incumbency, he waives all rights to the second position. The only time an
employee will be allowed to hold two incumbencies is when he is force reduced
from his original incumbency. At no time will an employee be allowed to hold
incumbency rights on more than two positions. For training purposes, Management
may reassign employees to their former incumbent positions for up to ninety (90)
days during which time the employee will be paid the higher rate of the job he
held when recalled or his former incumbent position.

SECTION 8 -- REDUCTION IN FORCE.

        Demotions, layoffs and other reductions in force shall be made in
descending job sequence within his line of progression recognizing current and
former incumbency rights within each seniority unit, starting with the highest
affected job, and with the employee on such job having the least length of Plant
service. The Company shall not be obliged to provide training (other than
deminimus reorientation) to employees in a reduction of force in order to
continue retention rights. Sequence on recall of employees so laid off shall be
in the reverse order.



                                       28

<PAGE>   29



SECTION 9 -- PERMANENT VACANCY AND TRANSFER RIGHTS.

        When a permanent vacancy exists, the following procedures shall apply:

        A. Step 1: Permanent vacancies within a seniority unit shall be filled
from within the first step of competition in the line of progression below or
above the job being filled. Each succeeding vacancy in the line of progression
shall be filled in the same manner.

        B. Step 2: Any vacancy not filled in accordance with the Step 1 bidding
procedure shall be posted in the department for a period of ten (10) days. The
employees of the department shall be eligible to bid for said vacancy with first
preference given to employees in the seniority unit of the vacancy. An employee
who transfers under this step shall have the right to return to the position
from which he transferred or the Company may return him to his former job
because he cannot meet the requirements of the job, within five (5) days from
the date of transfer. When an eligible employee accepts the position, he shall
be ineligible to bid again for a period of nine (9) months. The Company will
send a copy of the notice to the Union and will also provide the names of the
bidders and the person receiving the job. If an employee accepts the position,
he shall be ineligible to transfer again within nine (9) months. If an employee
rejects the position at the time he is notified that he is a successful bidder,
the nine (9) month ineligibility period will not apply. Should he initially
accept the position and subsequently reject the bid, exercises his five (5) day
return right or refuse transfer, the nine (9) month transfer restriction shall
apply from the date of return or rejection. Prior to notification, an employee
may at any time remove their name from the bid sheet. If after being awarded and
accepting a position, a vacancy is posted during the nine (9) month
ineligibility period and such position would represent a promotion of two job
classes or more over the employee's current incumbent position, the employee may
bid on such position consistent with the provisions of this paragraph.

        C. Step 3: A Step 3 notice of an available job opening(s) will be posted
on a plant-wide basis simultaneously with the Step 2 posting. The Step 3 posting
will inform employees of the job(s) which may be available if not filled at the
Step 2 level. The job posting will provide employees with an opportunity to
place their names on the Step 3 bid sheet prior to the time the Step 3 bid is
closed. The Step 3 bid sheets located in the Human Resources Building will be
closed at the time the Step 2 bid expires. If the position(s) is not filled at
the Step 2 level, the resulting vacancy shall be filled on a plant-wide basis
from the Step 3 bid sheet. When a vacancy is to be filled from the Step 3 bid
sheet, the designated human resources representative will notify the appropriate
employee and inform him of their selection. An employee who transfers under this
Step shall have the right to return to the seniority unit from which he
transferred or the Company may return him to his former unit because he cannot
meet the requirements of the job, within fourteen (14) days from the date of
transfer. If an employee is selected and accepts the position he shall be
ineligible to transfer again within one (1) year. If an employee elects not to
transfer at the time he is notified that he is a successful bidder, the one (1)
year ineligibility period will not apply. Should he initially accept the
position and subsequently reject the bid, exercise his fourteen (14) day return
right or refuse transfer, the one (1) year transfer restriction



                                       29

<PAGE>   30



shall apply from the date of return or rejection. The Company will send a copy
of the notice to the Union and will also provide the names of the bidders and
the person receiving the job.

        D. An employee who is absent because of vacation, sickness, or Union
business for the bidding period shall be allowed to bid on a vacancy that was
posted during such period; however, such bid must be registered within seven (7)
days of the date the employee returns to work, and provided further than an
employee who is awarded such vacancy will be deemed to have permanently accepted
such bid.

        E. Temporary Assignments: Permanent vacancies may be filled by temporary
assignment until such time as the prevailing bidder is selected and assigned.
During the Step 1 bidding procedure, the Company will make every effort to
assign the senior employee who most likely would be the successful bidder. Such
temporary assignment shall not result in the creation of any rights of
incumbency.

        F. Temporary Increases: All vacancies resulting from anticipated
increases in operating levels for a period of sixty (60) days or more, or
vacancies created by promotion, death, discharge, voluntary termination,
retirement or transfer out of the seniority unit shall be treated as permanent;
provided, however, that in the event an increase in operating levels is not
expected to continue, and does not, in fact, continue for more than sixty (60)
days, any vacancies created shall be deemed temporary and not permanent for the
purposes of this Article. The period of sixty (60) days or more will not be
considered interrupted or abbreviated due to work interruptions caused by
equipment failures, breakdowns, lack of material for processing and product flow
problems adversely affecting the feed stock required to maintain a level of
operations.

        G. Consent Decree. The Company agrees to be bound by Decree 1 filed in
the United States District Court for the Northern District of Alabama, Southern
Division, dated April 12, 1974, if, to the extent, and for so long as it is
applicable to the Company.

        H. Seniority Lists. The Company shall supply each Union unit grievance
committeeman with a complete unit seniority list on a quarterly basis unless
otherwise mutually agreed to.

SECTION 10 -- TEMPORARY VACANCIES.

        When it is necessary to fill a temporary vacancy known to be of more
than two (2) weeks duration, such vacancy shall, to the greatest degree
consistent with efficiency of the operation and the safety of employees, be
filled on the basis of the seniority unit and the seniority used for promotional
purposes, and shall be so filled no later than on the second weekly schedule
following the date when the duration of the vacancy, as aforesaid, becomes known
to Management. However, in case of a permanent vacancy on a job, the assignment
of a junior employee to a temporary vacancy on such job shall not be used as a
presumption of greater



                                       30

<PAGE>   31



ability in favor of such junior employee if such temporary vacancy was not made
available to the senior employee.

        When temporary vacancies of two (2) weeks or less are filled, they shall
be filled by promotion in the order as follows:

1. Promote the most senior of any displaced incumbents of the position to be
filled who is currently working on the turn and occupying a job below the level
of the vacancy in the line of progression.

2. Promote the most senior seniority-listed regular employee of the position
immediately below the vacancy who is currently working on the turn involved.

3. Promote the most senior seniority-listed regular employee of the unit who is
currently working on the position immediately below the vacancy on the turn
involved.

                                    ARTICLE 9

                               PROBATIONARY PERIOD

        A new employee and one who is reemployed after a break in his continuous
service, shall not acquire seniority until the expiration of 760 hours of actual
work following his employment, at which time he shall receive credit for
continuous service during such period. If said employee is terminated or
discharged during the first 760 hours of actual work, said termination or
discharge shall not be the subject of any claim, complaint, grievance or
arbitration against the Company; provided, however, that this will not be used
for purposes of discrimination because of race, color, religious creed, national
origin, sex, age, disability, Veteran or special disabled Veteran status or
because of membership in the Union.

        If said employee is rehired within six (6) months from the date of his
first employment, any prior hours worked shall count toward the seven hundred
sixty (760) hours of probation.

                                   ARTICLE 10

                            JURY AND WITNESS SERVICE

        An employee who is called for jury service or subpoenaed as a witness,
except on his own behalf, shall be excused from work for the days on which he
testifies or serves, up to and including sixty (60) business days. Service shall
include reporting for jury duty. Such employee shall receive for each day of
service on which he otherwise would have worked, the difference between the
payment he receives for such service in excess of $5 and the amount calculated
by the Company in accordance with the following formula. Such pay shall be based
on the number of days such employee would have worked had he not been performing
such service (plus any

                                             31

<PAGE>   32



Holiday in such period which he would not have worked) and the pay for each such
day shall be eight (8) times his average straight-time hourly rate of earnings
(excluding shift differentials and Sunday and overtime premiums) during the last
payroll period worked prior to such service. The employee will present proof
that he served as a juror or witness, or reported, and the amount of pay, if
any, received therefor. An employee shall not receive such juror or witness pay
when it duplicates pay received for time not worked for any other reason, and
such pay shall not be computed as hours worked for purposes of determining
overtime or premium pay liability.

                                   ARTICLE 11

                                 BEREAVEMENT PAY

        When death occurs to an employee's legal spouse, mother, father,
mother-in-law, father-in-law, son-in-law, daughter-in-law, son, daughter,
brother, sister, grandparents or grandchildren (including stepfather,
stepmother, stepchildren, stepbrother or stepsister when they have lived with
the employee in an immediate family relationship), an employee, upon request,
will be excused and paid for up to a maximum of three (3) shifts, or five (5)
scheduled shifts up to a maximum of forty (40) hours in the case of the death of
an employee's legal spouse, son, or daughter, including stepchildren when they
have lived with the employee in an immediate family relationship (or for such
fewer shifts as the employee may be absent) which shall fall within a three (3)
consecutive calendar day period or five (5) consecutive calendar day period in
the case of the death of an employee's legal spouse, son, or daughter, including
stepchildren when they have lived with the employee in an immediate family
relationship; provided, however, that one such calendar day shall be the day of
the funeral and it is established that the employee attended the funeral.
Payment shall be eight times his average straight-time hourly earnings. An
employee will not receive funeral pay when it duplicates pay received for time
not worked for any other reason. Time thus paid will not be counted as hours
worked for purposes of determining overtime or premium pay liability.

        "Funeral" is defined as a service recognized by any organized religion,
creed, or culture to which the employee or decedent belongs as the standard
ceremony to observe the interment, cremation or similar disposition of remains
of the family members set forth above.

        An employee will not receive funeral pay when it duplicates pay received
for time not worked for any other reason, and such bereavement pay shall not be
computed as hours worked for purposes of determining overtime or premium pay
liability.




                                       32

<PAGE>   33



                                   ARTICLE 12

                                MILITARY SERVICE

        The Company shall provide each employee who enters the Armed Services of
the United States from employment with the Company all rights required to be
given to said employee upon his return to the Company provided in the laws of
the United States and the laws of the State of Utah.

        An employee with one (1) or more years of continuous service who is
required to attend an encampment of the Reserve of the Armed Forces or the
National Guard shall be paid, for a period not to exceed two weeks in any
calendar year, the difference between the amount paid by the government (not
including travel, subsistence or quarters allowance) and the amount calculated
by the Company in accordance with the following formula. Such pay shall be based
on the number of days such employee would have worked had he not been attending
such encampment during such two (2) weeks (plus any holiday in such two (2)
weeks which he would not have worked) and the pay for each such day shall be
eight (8) times the employee's Regular Hourly Wage (as defined in Section 2A of
Article 5 of this Agreement) during the last payroll period worked prior to the
encampment. If the period of such encampment exceeds two (2) weeks in any
calendar year, the period on which such pay shall be based shall be the first
two (2) weeks he would have worked during such period.



                                   ARTICLE 13

                                SAFETY AND HEALTH

SECTION 1 -- OBJECTIVE AND OBLIGATIONS OF THE PARTIES.

        A. Cooperation: The Company and the Union will cooperate in the
objective of eliminating accidents and health hazards. The Company shall make
reasonable provision for the safety and health of its employees at the Geneva
Plant during the hours of their employment. The Company, the Union and the
employees recognize their obligations and/or rights under existing Federal and
State laws with respect to safety and health matters.

        B. Radiation: Where devices which emit ionizing radiation are used, the
Company will continue to maintain safety standards with respect to such devices
not less rigid than those adopted from time to time by the Nuclear Regulatory
Commission and will maintain procedures designed to safeguard employees and will
instruct them as to safe working procedures involving such devices.


                                       33

<PAGE>   34



        C. Toxic Materials: Where the Company uses toxic materials, it shall
inform the affected employees what hazards, if any, are involved and what
precautions shall be taken to insure the safety and health of the employees.
Upon the request of the Union Co-chairman of the joint safety and health
committee (the "Joint Committee"), the Company shall provide in writing
requested information from material safety data sheets or their equivalent on
toxic substances to which employees are exposed in the workplace; provided that
when the information is considered proprietary, the Company shall so advise the
Union Co-chairman and provide sufficient information for the Union to make
further inquiry.

        D. Sampling and Testing: The Company will continue a program of periodic
in-plant air sampling and noise testing under the direction of qualified
personnel. Where the Union Co-chairman alleges a significant on-the-job health
hazard due to the in-plant air pollution, noise, or chemical or physical agents,
the Company will also make such additional tests and investigations as are
necessary and shall notify the Union Co-chairman when such a test is to take
place. A report based on such additional tests and investigations shall be
reviewed and discussed with the Joint Committee. For such surveys conducted at
the request of the Union Co-chairman, a written summary of the sampling and
testing results and conclusions of the investigation shall be provided to the
Joint Committee.

        E. First Aid: The Company shall provide adequate first aid for all
employees during their working hours, and as required, provide for prompt
emergency transportation to an appropriate treatment facility for employees who
become seriously ill or are injured on the job. Where necessary, the Company
shall also provide or arrange for suitable transportation from such facility
back to the Geneva Plant or the employee's home, as appropriate. An employee
who, as a result of an industrial accident, is unable to return to his assigned
job for the balance of the shift on which he was injured will be paid for any
wages lost on that shift.

SECTION 2 -- PROTECTIVE DEVICES, WEARING APPAREL AND EQUIPMENT.

        Protective devices, wearing apparel and other equipment necessary to
properly protect employees from injury shall be provided by the Company. The
Company shall provide at the Company's cost one (1) pair of prescription safety
glasses at the time of hire and will replace damaged prescription safety glasses
which create an unsafe condition for the employee. Damaged safety glasses will
not be replaced where the damage is due to employee negligence. Goggles, gas
masks, face shields, respirators, special purpose gloves, fireproof, waterproof
or acid proof protective clothing when necessary and required shall be provided
by the Company without cost, except that the Company may assess a fair charge to
cover loss or willful destruction thereof by the employee. Proper heating and
ventilating systems shall be installed where needed and maintained in good
working condition. The Company shall provide, at the Company's cost, two (2)
pairs of safety shoes to each employee. The first safety shoe allowance will be
after May 1, 1998 and the second allowance will be after May 1, 2000.



                                       34

<PAGE>   35



SECTION 3 -- DISPUTES CONCERNING UNSAFE CONDITIONS.

        An employee or group of employees who believe that they are being
required to work under conditions which are unsafe or unhealthy beyond the
normal hazard inherent in the operation in question shall have the right to: (1)
file a grievance in the second step of the complaint and grievance procedure for
preferred handling in such procedure and arbitration and/or (2) relief from the
job or jobs, without loss to their right to return to such job or jobs, and, at
Management's discretion, assignment to such other employment as may be available
in the Geneva Plant; provided, however, that no employee, other than
communicating the facts relating to the safety of the job shall take any steps
to prevent another employee from working on the job. If an employee has
exercised his right to relief from the job under this Section, and the existence
of such unsafe condition is in dispute, Management shall notify the Chairman of
the Grievance Committee and the Division Manager, or their designees, shall
investigate immediately. The Chairman of the Grievance Committee shall have the
right to have a Union member of the Joint Committee present as an advisor.
Should either Management or the Board conclude that an unsafe condition within
the meaning of this Section 3 existed and should the employee not have been
assigned to other available equal or higher-rated work, he shall be paid for the
earnings he otherwise would have received.

        It is recognized that emergency circumstances may exist, and the local
parties are authorized to make mutually satisfactory arrangements for immediate
arbitration to handle such situations in an expeditious manner.

SECTION 4 -- JOINT SAFETY AND HEALTH COMMITTEE.

        A. Committee: A safety and health committee consisting of a mutually
agreed to number of employees from each department designated by the Union and
an equal number of Management members, if Management so desires, shall be
established (the "Joint Committee"). The Union and the Company shall designate
their respective Co-chairmen and shall certify to each other in writing such
Co-chairman and committee members. The Joint Committee shall hold monthly
meetings at times determined by the Co-chairman who may also agree to hold
special meetings. Each Co-chairman shall submit a proposed agenda to the other
Co-chairman at least five (5) days prior to the monthly meeting. The Company
Co-chairman shall provide the Union Co-Chairman with minutes of the monthly
meeting. Prior to such monthly meetings, the Co-chairman or their designees may
engage in an inspection of mutually selected areas of the Geneva Plant. At the
conclusion of the inspection, a written report shall be prepared by the
Co-chairman. Time consumed on Joint Committee work by Joint Committee members
designated by the Union shall not be considered hours worked to be compensated
by the Company. The function of the Joint Committee shall be to advise with
plant management concerning safety and health and to discuss legitimate safety
and health matters but not to handle complaints or grievances. In the discharge
of its function, the Joint Committee shall: consider existing practices and
rules relating to safety and health, formulate suggested changes in existing
practices and rules, recommend adoption of new practices and rules, encourage
cooperation with safe job


                                       35

<PAGE>   36



procedures and safety rules by all parties, review proposed new safety and
health programs developed by Management and review accident statistics, trends
and disabling injuries which have occurred in the Geneva Plant and make
appropriate recommendations. When the Company introduces significant changes in
technology or operations which may affect the safety or health of employees, the
matter will be discussed in advance by the Joint Committee with the objective of
reviewing necessary safety equipment, safe job procedures and safety training.

        B. Time Off for Committee Business: The Union Co-chairman or his
designee will be afforded time off without pay as may be required to visit
departments at all reasonable times for the purpose of transacting the
legitimate business of the Joint Committee, after notice to and receiving the
permission of, the head of the department to be visited or his designated
representative and, if the Co-chairman or his designee is then at work,
permission (which shall not be unreasonably withheld) from his own department
head or his designated representative. If the Union Co-chairman or his designee
is not at work, he shall be granted access to the plant at all reasonable times
for the purpose of conducting the legitimate business of the Joint Committee
after notice to, and receiving the permission of, the head of the department to
be visited or his designated representative.

        C. New Equipment: When the Company introduces new personal protective
apparel or extends the use of protective apparel to new areas or issues new
rules relating to the use of protective apparel, the matter will be discussed
with the members of the Joint Committee in advance with the objective of
increasing cooperation. Should differences result from such discussions, a
grievance may be filed in the Second Step by the Chairman of the Grievance
Committee within thirty (30) days thereafter. In the event that the grievance
progresses through the complaint and grievance procedure to arbitration, the
Board shall determine whether such rule or requirement is appropriate to achieve
the objective set forth in Section 1.

        D. Advice: Advice of the Joint Committee, together with supporting
suggestions, recommendations and reasons shall be submitted to the Vice
President of Operations for his consideration and for such action as he may
consider consistent with the Company's responsibility to provide for the safety
and health of its employees during the hours of their employment and mutual
objective set forth in Section 1.

        E. Testimony and Investigations: In the event the Company requires an
employee to testify at the formal investigation into the causes of a disabling
injury or death or accidents which could have resulted in disabling injury or
death, the Company shall notify the employee that he, the employee, may arrange
to have the Union Co-chairman or his designee present as an observer at the
proceedings for the period of time required to take the employee's testimony.
The Union Co-chairman will be furnished with a copy of such record as is made of
the employee's testimony. In addition, in the case of accidents which resulted
in disabling injury or death or accidents which could have resulted in disabling
injury or death and require a fact-finding investigation, the Company will
within four (4) hours after such accident, notify the Union Co-chairman or his
designee, who shall have the right to visit the scene of the accident promptly

                                       36

<PAGE>   37



upon such notification, if he so desires, accompanied by the Company Co-chairman
or his designee and the Company will add the Union Co-chairman or his designee
to the notification list for such accidents. After making its investigation, the
Company will supply to the Union Co-chairman a statement of the nature of the
injury, a description of the accident, and any recommendations available at that
time, and will consider any recommendations he may wish to make regarding the
report. In such cases, when requested by the Union Co-chairman, the Company
Co-chairman or his designee will review the statement with the Union
Co-chairman. Also, in such cases, the Company Co-chairman or his designee, when
requested by the Union Co-chairman, will visit the scene of the accident with
the Union Co-chairman or his designee.

        F. Reports to International Union: The Company will provide the
International Union Safety and Health Department notification of any accident
resulting in a fatality to a Union member within seventy-two (72) hours of the
fatality. This notification shall be either oral or written and include the date
of the fatality, the unit location of the fatality and, if known, the cause of
the fatality. The Company will provide the International Union Safety and Health
Department with a copy of the fatal accident report that is given to the local
Joint Committee when such report becomes available. Any necessary discussion or
other communication on this data between the Company and International Union
will be with the individual designated to provide such information.

        Once each year the Company will, from the same source described in F
above, provide to the International Union Safety and Health Department the OSHA
Form 200 Summary of Occupational Injuries and Illnesses or its equivalent, the
lost workday accident incidence frequency rate and the fatality frequency rate.

SECTION 5 -- DISCIPLINARY RECORDS.

        Written records of disciplinary action against an employee involved for
the violation of a safety rule but not involving a penalty of time off will not
be used by the Company in any arbitration proceeding where such action occurred
one (1) or more years prior to the date of the event which is the subject of
such arbitration.

        When an employee has completed twenty-four (24) consecutive months of
work without discipline involving a penalty or time off for violation of a
safety rule, prior disciplinary penalties for such offenses not exceeding four
(4) days suspension shall not be used for further disciplinary action.

        When a written safety observation report is made involving a violation
of a safety procedure or rule by an employee which does not involve discipline,
a copy of that report will be given to the employee.



                                       37

<PAGE>   38



SECTION 6 -- ALCOHOLISM AND DRUG ABUSE.

        Alcoholism and drug abuse are recognized by the parties to be treatable
conditions. Without detracting from the existing rights and obligations of the
parties recognized in the other provision of this Agreement, the Company and the
Union agree to cooperate in encouraging employees afflicted with alcoholism or
drug abuse to undergo a coordinated program directed to the objective of their
rehabilitation.

        It is the policy of Geneva Steel and the Union to make every reasonable
effort to provide a safe work environment free of drugs and alcohol.

        Employees using, consuming, selling, transferring, or possessing alcohol
or illegal drugs on the Company's premises shall be subject to immediate
discipline following appropriate investigation and review by the Company.

        Use of alcohol or illegal drugs prior to reporting for work which
results in negative work performance or erratic conduct in the workplace is also
grounds for discipline. In order to implement this policy, the Company may test
all applicants for employment for drugs and alcohol and employees recalled from
layoff after absences from work in excess of ninety (90) days. In addition, the
Company may require current employees to undergo drug and alcohol testing, in
order to investigate accidents, safety incidents in the workplace and possible
individual employee impairment. Such testing shall be done promptly after the
incident utilizing a N.I.D.A. Lab under the supervision of qualified medical
personnel. The employee being tested may observe the sample being tested at the
Plant Medical Facility should he or she so desire. Should an employee test
positive as to any illegal drug and a confirming test supports the positive
result, he shall be offered rehabilitation in the first such case only. All
programs will be carried out with due regard to the employee's right to privacy.
The Company will not require employees to submit to random or blanket drug
screening.

SECTION 7 -- SAFETY AND HEALTH TRAINING.

        A. General: The Company recognizes the special need to provide
appropriate safety and health training to all employees. The Company will
develop safety and health training that provides either the training described
below or the basis for such training as it relates to the needs of the Company
and the employee.

        Training programs shall recognize that there are different needs for
safety and health training for newly hired employees, employees who are
transferred or assigned to a new job and employees who require periodic
retraining.

        B. Training of New Employees: Newly hire employees shall receive
training in the general recognition of safety and health hazards, their
statutory and basic labor contract rights and obligations with respect to health
and safety and the purpose and function of the Company's

                                       38

<PAGE>   39



Safety, Health and Medical Departments, the Joint Committee and the
International Union Safety and Health Department. In addition, upon initial
assignment to a job, such employees shall receive training on the nature of the
operation or process, the safety and health hazards of the job, the safe working
procedures, the purpose, use and limitations of personal protective equipment
required, and other controls or precautions associated with the job.

        The Union Co-chairman and the International Union Safety and Health
Department or a designee shall, upon request, be afforded the opportunity to
review the training program for newly hired employees at the plant level.

        C. Training of Other Employees: The training of employees other than
those newly hired by the Company shall be directed to the hazards of the job or
jobs on which they are required to work. Such training shall include hazard
recognition, safe working procedures, purpose, use and limitations of
appropriate specialized instruction. Once each calendar quarter, the
chairpersons of the joint Management Safety Committee will hold a meeting to
address any issues surrounding the training of employees as contemplated in this
Section 7C.

        D. Retraining: As required by an employee's job and assignment area,
periodic retraining shall be given on safe working procedures, hazard
recognition, and other necessary procedures and precautions.

SECTION 8 -- MEDICAL RECORDS.

        The Company shall comply with all applicable Federal (OSHA) and/or State
(UOSH) regulations concerning the confidentiality of and access to employee
medical records.

                                   ARTICLE 14

                           PENSIONS AND PROFIT SHARING

        A. The Company shall pay into the Defined Contribution Pension Plan a
sum equal to 5% beginning May 1, 1998. The payment to the Pension Plan will be
increased to 5-1/4% beginning May 1, 1999.

        B. A Defined Benefit Pension Plan effective May 1, 1998 is contained in
the plan document, a copy of which will be provided to each employee. Such plan
document constitutes a part of this Section as though incorporated herein.

        C. Employees shall be entitled to share ten percent (10%) of the
Company's net profits before taxes (subject to certain adjustments) from its
Geneva Plant steel operations as more fully described in Appendix D to this
Agreement.


                                       39

<PAGE>   40



        Notwithstanding any contrary provision in any Pension Plan description
or plan document, the Company will not reduce the level of benefit called for in
the plan provided under this contract during the term of this Agreement, unless
such change in the benefit is agreed to by the Union or is required by
applicable law.

                                   ARTICLE 15

                                    INSURANCE

        The insurance benefits which shall become effective upon the effective
date of this Agreement are set forth in Appendix B to this Agreement which is
incorporated herein.

        In the event legislation is enacted creating a system of national or
state health benefits coverage, either party shall have the right to reopen this
provision of this Agreement. If the parties are unable to reach agreement, the
matter should be submitted to binding arbitration for resolution.

        Notwithstanding any contrary provision in any Summary Plan Description
and/or plan document, the Company will not reduce the level of benefits called
for in the various health and benefit plans provided under this contract during
the term of this Agreement, unless such reduction in the level of benefits is
agreed to by the Union or required by applicable law.

                                   ARTICLE 16

                            ADJUSTMENTS OF GRIEVANCES

SECTION 1 -- PURPOSE.

        A. Should any differences arise between the Company and the employees as
to the meaning and application of the provisions of this Agreement, there shall
not be any suspension of work on account of such differences, but an earnest
effort shall be made to settle them promptly and in accordance with provisions
of this Agreement in the manner hereinafter set forth.

        B. Failure to Appeal: If any decision is not appealed within the time
limits to the next step, it shall be considered settled on the basis of the
prior step, and the employee or employees covered by such complaint or grievance
shall not have any further right or remedy with respect to any matter or claim
covered by such complaint or grievance.

SECTION 2 -- DEFINITIONS.

        A. "Complaint" shall mean a request or complaint.


                                       40

<PAGE>   41



        B. "Grievance" shall mean a complaint of an employee which involves the
interpretation or application of, or compliance with, the provisions of this
Agreement.

        C. "Day" shall mean calendar day, but shall not include any Saturday,
Sunday, or Holiday unless otherwise indicated herein.

SECTION 3 -- PROCEDURE.

        A. Oral: An employee shall take any complaint to his foreman, with or
without his Union representative as he may decide, within five (5) working days
of the event or the time he reasonably should have known of the event. The
matter shall be answered by the foreman within two (2) working days from the day
it is presented.

        B. Step 1: If the complaint is not settled at the Oral Step, the
Department Area Manager, Manager Labor Relations (if appropriate) and Union
Grievance Committeeman, with the employee and any other necessary witnesses
present, shall discuss the matter within seven (7) working days from the
foreman's answer in Paragraph A above, and attempt to resolve the matter. At
this level, the grievance form shall be filed by the Union Grievance
Committeeman and the disposition of the grievance shall be noted on the
grievance form. Disposition of the grievance at this level shall occur with five
(5) working days following the completion of the discussion. If the disposition
of the grievance is not satisfactory to the Union Grievance Committeeman, a
written statement shall be prepared by the Union Grievance Committeeman attached
to the grievance form which shall be submitted to the Labor Relations Department
within seven (7) working days of the disposition of the grievance at Step 1. The
Company will provide a written response to the Union within seven (7) working
days of receipt of the Union's written statement. Written statements shall be
brief and factual. They shall state what provisions of the Agreement are relied
upon, the Company's response to Union reliance on these provisions, as well as
the remedy sought.

        C. Step 2: The Union Grievance Committeeman is not satisfied with the
disposition in Step 1 and the Union continues to maintain that the grievance is
meritorious, the Labor Relations Department shall, within ten (10) working days
of the receipt of the Union's written statement (or such other time as shall be
mutually agreed to by the Company and the Union), cause a discussion between the
Chairman of the Grievance Committee and the Union Grievance Committeeman and
himself, together with the employee and such other persons as either side may
reasonably wish to have in order to dispose of the matter. It shall be answered
within seven (7) working days of the date of such meeting. The Chairman of the
Grievance Committee shall have the authority to settle, withdraw, or continue
processing the grievance. The Company Representative shall have the authority to
settle the grievance.

        D. Step 3: If the Chairman of the Grievance Committee is not satisfied
with the disposition in Step 2, the Union must appeal the grievance to Step 3 of
the procedure within thirty (30) days of receipt of the disposition of the
grievance from Step 2. The Union and the



                                       41

<PAGE>   42



Company will meet in an effort to resolve the grievance prior to an Arbitration
hearing date being set. The parties involved in this review shall include the
International Union Representative, the Local Union President, the Grievance
Committee Chairman, the Company's Vice President of Human Resources, and the
Manager of Labor Relations or his designated representative. The International
Union Representative and the local Union President shall have the authority to
settle, withdraw, or continue processing the grievance. The Vice President of
Human Resources shall have the authority to settle the grievance. The review
meeting shall be limited to the International Union Representative, the Local
Union President, the Grievance Committee Chairman, the Company's Vice President
of Human Resources, and the Manager of Labor Relations or his designated
representative. No other attendees will be permitted unless mutually agreed upon
in advance of the meeting. All settlements arrived at in this procedure will be
in written form and signed by the aforementioned individuals. Whenever either
party concludes that further discussions cannot contribute to the settlement of
the grievance, the grievance may be appealed to arbitration.

        E. Arbitration: If the grievance is not resolved at the Step 3 level,
then within thirty (30) working days from the disposition of the grievance at
Step 3 the International Union may appeal the complaint to arbitration. The
Company and the Union shall agree to an arbitration panel. If the Company and
the Union cannot agree on an arbitrator from such list, the Union shall strike a
name from the list and the Company shall do likewise and the process shall be
repeated until one name remains which shall then be the arbitrator. The
arbitrator shall be furnished with the written statements from both parties
outlining the pertinent facts in Step 1. Thereafter, the arbitrator shall hear
the complaint within twenty-one (21) days from the date he was selected, or upon
a date jointly agreed to by the parties. The arbitrator will be asked to issue a
decision within twenty (20) days from the date of the hearing, or fifteen (15)
days from receipt of the transcript, whichever is later. The parties may
mutually agree to have the arbitrator issue a decision on the basis of the
written record submitted to him by the parties. The arbitrator shall assure
himself that all necessary facts and consideration have been placed before him
by both sides, and he shall have the authority to interpret and apply the
provisions of this Agreement, but he shall not have the authority to alter any
of its provisions. The parties shall share equally the compensation and expenses
of the arbitration. The decision of the arbitrator shall be final and binding on
the parties.

SECTION 4 -- MISCELLANEOUS.

        A. Union Representation: Any employee who is summoned to meet in an
office with a supervisor other than his own immediate supervisor for the purpose
of discussing possible disciplinary action shall be entitled to be accompanied
by a Union representative if he requests such representation, provided such
representation is then available or if not then available, the employee's
required attendance at such meeting shall be deferred only for such time during
that shift as is necessary to provide opportunity for him to secure the
attendance of such representative. The Union shall be entitled to a maximum of
eleven (11) Grievance



                                       42

<PAGE>   43


Committeemen, and any officer who is also a Grievance Committeeman will be
counted toward that maximum number.

        B. Group Grievances: All grievances shall be on an individual basis
unless mutually agreed upon by the parties, which agreement shall not be
unreasonably withheld.

        C. The complaint and grievance procedure may be utilized by the Union in
processing complaints or grievances which allege a violation of the obligations
of the Company to the Union as such. In processing such complaints or
grievances, the Union shall observe the specified time limits in appealing and
the Company shall observe the specified time limits in answering. The Union may
not, pursuant to this provision, initiate a grievance absent a signed complaint
form from an affected employee which alleges a violation of any individuals
rights under this Agreement. In the event an employee dies, the Union may
process on behalf of his legal heirs any claim he would have had relating to any
monies due under any provision of this Agreement.

        D. Acceleration: The Grievance Committee Chairman can sign and process a
grievance directly into Step 2 if the issue involves two (2) or more
departments. If the Company's discussion or answer to a complaint or a grievance
is not given within the prescribed time requirements in any Step, the Union,
after notifying the Company, may refer or appeal to the next Step.

        E. Extensions: The time limits set forth in this Article may be extended
by the written mutual agreement of the parties, such agreement shall not be
unreasonably denied.

        F. Employee Disciplinary Record: Disciplinary records shall not be used
after two (2) years from the date of the event which was the subject of the
discipline, if the employee has been subject to no intervening disciplinary
action.

        G. Prior Grievances: Any grievance or complaint existing or arising out
of events which occurred prior to the date that the Company begins operation of
the Geneva Plant shall have nothing to do with the Company or this Agreement.

        H. When possible, proceedings under this grievance procedure shall take
place during normal shift hours.

        I. The Company's liability shall be limited to 120 days prior to filing
of any grievance. In any settlement involving retroactive payments, the
appropriate Union and Company representatives shall expeditiously determine the
identity of the payees and the specific amount owned each payee. Payment shall
be made promptly but, unless otherwise mutually agreed, if the payment is not
made within sixty (60) days after such determination, the affected payee(s) will
be paid interest from the date of such determination at the rate of seven
percent (7%) per annum, unless the delay in payment is due to the actions of the
Union or the payee(s).


                                       43

<PAGE>   44



        J. When a grievance has been appealed to Step 3, a written summary
developed from the Step 2 meeting shall be prepared by the Company. The record
shall be jointly signed by the Company Representative and the Chairman of the
Grievance Committee. If the Chairman of the Grievance Committee shall disagree
with the written summary prepared by the Company, he shall set forth and sign
his reasons for such disagreement, and the written summary, except for such
disagreement, shall be regarded as agreed to.

        K. In the event that the Union processes a complaint or grievance
concerning the discipline or discharge of an employee, the Company will not
discipline employees who have been revealed to have violated a Company rule or
policy as a result of the Union's investigation into such matters. The foregoing
shall only be granted in those instances wherein the Union, as a part of the
defense of the grievant, maintains that the discipline or discharge issued in
the incident under grievance was inconsistent with the treatment of other
employees under similar circumstances.

        Notwithstanding the foregoing, nothing in this Section 4.K. shall
prejudice or preclude the Company's right to discipline or discharge any
employee (i) for acts of misconduct which occur subsequent to the incident(s)
identified by the Union in the Grievance Procedure, or (ii) for any acts at
anytime of misconduct involving drugs, a serious safety violation or violence as
defined in Article 17, Section 2 of this Agreement.

                                   ARTICLE 17

                      DISCHARGE AND DISCIPLINE OF EMPLOYEES

SECTION 1 -- DISCHARGE.

        The Company may at any time suspend or discharge any employee for just
cause. If such employee believes he was suspended or discharged without just
cause, that employee or the Union may submit such complaint or grievance to the
adjustment of grievances procedure contained in Article 16.

SECTION 2 -- JUSTICE AND DIGNITY ON THE JOB.

        The following understandings have been reached for a Procedure for
Justice and Dignity on the job applicable to discharge and suspension cases
only.

        A. Management, after discharging an employee, or imposing a suspension,
shall not remove the affected employee from active work on the job to which his
seniority entitles him upon such discharge or suspension prior to a final
determination of the merits of the discharge or suspension in accordance with
the applicable provisions of the Basic Labor Agreement should the employee elect
to file a complaint or grievance protesting Management's decision. For purposes
of the operation of the option not to be removed from the job pursuant to this

                                       44

<PAGE>   45



Procedure, a complaint or grievance protesting a discharge or suspension must be
filed within four (4) calendar days after notice of discharge or imposition of
the suspension, as the case may be. In the event no complaint or grievance is
filed within such time limit, the Company will not suspend or remove the
affected employee from active work on the job to which his seniority entitles
him prior to the day following the expiration of the time limit set forth in
this paragraph. For any purpose other than operation of the option set forth
above, the time limits for filing a complaint or grievance protesting a
discharge or suspension shall continue to be those set forth in the Basic Labor
Agreement.

        B. The parties recognize that it is essential that a proper balance be
maintained between the right of an employee to be retained under this Procedure
and the right of Management to manage the plant. Accordingly, to insure that
balance, this Procedure will be inapplicable to discharges or suspensions
involving any offenses which endanger the safety of other employees or members
of supervision or the plant and its equipment. Such offenses shall include:
theft; use and/or distribution on Company property of drugs, narcotics, and/or
alcoholic beverages; possession of firearms on Company property; destruction of
Company property; threatening bodily harm to, and/or striking, a member of
supervision; fighting; such as insubordination as endangers the safety of other
employees or members of supervision or the Plant and its equipment; or other
acts of a similar nature. In addition, this Procedure will be inapplicable to a
discharge or suspension involving activity prohibited by the provisions of
Article 18 of this Agreement, and to any violation of the terms of a Last Chance
Agreement.

        C. When an employee is retained pursuant to Paragraph A, and the
employee's discharge or suspension is finally determined in the grievance
procedure or in arbitration to be for just cause, the removal of the employee
from the active employment rolls shall be effective for all purposes the day
following the date of final resolution of the grievance.

        D. While a discharged employee is retained at work pursuant to Paragraph
A and the employee is discharged again for a repeat of the same conduct, the
employee will no longer be eligible to be retained at work under these
provisions. Such removal from work will be effective on the day of the
subsequent discharge.

        E. Nothing in this Procedure shall restrict or expand Management's right
to relieve an employee for the balance of such employee's shift under the terms
of the Basic Labor Agreement.

                                   ARTICLE 18

                       PROHIBITION OF STRIKES AND LOCKOUTS

        During the term of this Agreement, neither the Union nor any employee
shall: (a) engage in or in any way encourage or sanction any strike or other
action which shall interrupt or interfere with work or production at the Geneva
Plant; or (b) prevent or attempt to prevent the access of

                                       45

<PAGE>   46



employees to the Geneva Plant. During the term of this Agreement, the Company
shall not engage in any lockout of the employees of the Geneva Plant.

                                   ARTICLE 19

                                MANAGEMENT RIGHTS

        The Management of operations and the direction of the working forces and
operations of the Geneva Plant, including, without limitation, the hiring,
promoting and retiring of employees, the suspending, discharging or otherwise
disciplining of employees for just cause, the laying off and calling to work of
employees in connection with any reduction or increase in the working forces,
the scheduling of work, and the control and regulation of the use of all
equipment and other property of the Company, are the exclusive functions of the
Management; provided, however, that in the exercise of such functions the
Management shall observe the provisions of this Agreement. Neither Management
nor the Union shall discriminate against any employee or applicant for
employment because of his membership or lack of membership in, or lawful
activity on behalf of or in connection with, the Union.

                                   ARTICLE 20

                               SCOPE OF AGREEMENT

        The Parties expressly declare that they have bargained between them on
all phases of wages, hours and working conditions, and that the specific terms
of this Agreement and any addenda thereto represent their full and complete
understanding without reservation or unexpressed understanding. Any aspect of
wages, hours or working conditions not covered by this Agreement is declared to
have been expressly eliminated as a subject of grievance, bargaining or
arbitration, and may not be raised for further bargaining or arbitration without
the specific written consent of both parties.

        In accepting the considerations and limitations herein agreed to by the
Company, the Union unqualifiedly waives all present and/or future rights during
the term of the Agreement to require the Company to bargain collectively on any
other aspect of wages, hours of work or working conditions affecting employment,
whether specifically contained herein or not, this giving the Company the right
to manage the business in all respects subject only to the express terms of this
Agreement.



                                       46

<PAGE>   47


                                   ARTICLE 21

    LOCAL WORKING CONDITIONS, PAST PRACTICES, WORK RULES AND PRIOR AGREEMENTS

SECTION 1 -- LOCAL WORKING CONDITIONS, PAST PRACTICES, WORK RULES.

        The term "local working conditions" as used herein means specific
practices or customs which reflect detailed application of the subject matter
within the scope of wages, hours of work, or other conditions of employment and
includes local agreements, written or oral, on such matters. It is recognized
that it is impracticable to set forth in this Agreement all of these working
conditions, which are of a local nature only, or to state specifically in this
Agreement which of these matters should be changed or eliminated. The following
provisions provide general principles and procedures which explain the status of
these matters and furnish necessary guideposts for the parties hereto and the
Board.

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

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

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

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

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

                                       47

<PAGE>   48



        F. The settlement of a grievance prior to arbitration under this Section
shall not constitute a precedent in the settlement of grievances in other
situations in this area.

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

                                   ARTICLE 22

                              SHORT WORK WEEK FUND

        The Company shall establish a fund into which it will contribute $.10
for each hour worked by employees, to be known as the "Short Work Week Fund".

        The Fund shall be used to pay any employee for any week for which he is
scheduled to work an amount equal to the product of his Regular Wage Rate times
the difference between (1) 32 hours, and (2) the sum of the hours he actually
worked, plus the hours he did not work but for which he was paid by the Company
(excluding the first eight (8) hours for which he received pay for unworked
Holidays in any week), plus the hours he was scheduled to work but did not work
because of his failure to report for work as scheduled.

        The Company's obligation shall be limited to the prompt payment of the
$.10 per hour into the Fund. Funds in excess of $600,000 may be used by the
Company to offset costs as associated with the Long Term Disability Plan and the
Continuance of medical insurance benefits to employees on layoff.

                                   ARTICLE 23

                                  MISCELLANEOUS

SECTION 1 - TERMINATION.

        This Agreement shall terminate at the expiration of sixty (60) days
after either party shall give notice of termination to the other party, but in
no event shall it terminate prior to April 30, 2001.



                                       48

<PAGE>   49



SECTION 2 -- MAILING OF NOTICES.

        Any notice to be given under this Agreement shall be given by registered
or certified mail; be completed by and at the time of mailing; and if by the
Company, be addressed to the Union at the following addresses:

               United Steelworkers of America
               District 12
               360 West 5300 South, #350
               Murray, Utah 84123

               United Steelworkers of America
               Local Union 2701
               1847 Columbia Lane
               Orem, Utah 84058

               United Steelworkers of America
               Terry Bonds
               Director, District 12
               12821 Industrial Road
               Houston, Texas 77015

        And if by the Union to the Company at:

               Vice President, Human Resources
               Geneva Steel
               P.O. Box 2500
               Provo, Utah 84603

        Either party may, by like written notice, change the address to which
registered mail notice to it shall be given.

SECTION 3 -- RATIFICATION.

        This Agreement shall be binding on the parties hereto only after
affirmative ratification by Local 2701 and approval of the Board of Directors of
the Company.

                                       49

<PAGE>   50



        IN WITNESS WHEREOF, we have hereunto set our hands the day and year
first above written.

                                       UNITED STEELWORKERS
GENEVA STEEL COMPANY                        OF AMERICA
/s/ Joseph A. Cannon                   /s/ George Becker
-----------------------------          ------------------------------
Joseph A. Cannon                       George Becker
CEO and Chairman of the Board          President

/s/ Ken C. Johnsen                     /s/ Leo W. Gerard
-----------------------------          ------------------------------
Ken C. Johnsen                         Leo W. Gerard
Executive Vice President               Secretary, Treasurer

/s/ Carl E. Ramnitz                    /s/ Richard H. Davis
-----------------------------          ------------------------------
Carl E. Ramnitz                        Richard H. Davis
V.P. of Human Resources                V.P. of Administration
                                       
                                       /s/ Leon Lynch
                                       ------------------------------
                                       Leon Lynch
                                       V.P. Human Affairs

                                       /s/ Terry Bonds
                                       ------------------------------
                                       Terry Bonds
                                       District Director

                                       /s/ Dallas Alexander
                                       -------------------------------
                                       Dallas Alexander
                                       Subdirector, District 38, Subdistrict 12

                                       /s/ Dennis Kujala
                                       -------------------------------
                                       Dennis Kujala
                                       President, Local 2701

                                       /s/ Lionel Camara
                                       -------------------------------
                                       Lionel Camara
                                       Chairman, Grievance Committee

                                       /s/ Jim Christensen
                                       -------------------------------
                                       Jim Christensen
                                       Secretary, Grievance Committee

                                       /s/ Gary Ransom
                                       -------------------------------
                                       Gary Ransom
                                       Grievanceman



                                       50

<PAGE>   51



                                   APPENDIX A

                                HOURLY WAGE RATES


<TABLE>
<CAPTION>
        JOB CLASS                                     EFFECTIVE DATES
                              ---------------------------------------------------------------
                              APRIL 1, 1998            APRIL 1, 1999            APRIL 1, 2000
        ---------             -------------            -------------            -------------
<S>                           <C>                     <C>                       <C>   
           1                      $10.10                   $10.35                   $10.66
           2                      $13.14                   $13.47                   $13.87
           3                      $13.30                   $13.63                   $14.04
           4                      $13.48                   $13.82                   $14.23
           5                      $13.64                   $13.98                   $14.40
           6                      $13.81                   $14.16                   $14.58
           7                      $13.98                   $14.33                   $14.76
           8                      $14.15                   $14.50                   $14.94
           9                      $14.32                   $14.68                   $15.12
           10                     $14.48                   $14.84                   $15.29
           11                     $14.65                   $15.02                   $15.47
           12                     $14.82                   $15.19                   $15.65
           13                     $14.99                   $15.36                   $15.82
           14                     $15.15                   $15.53                   $16.00
           15                     $15.32                   $15.70                   $16.17
           16                     $15.49                   $15.88                   $16.36
           17                     $15.66                   $16.05                   $16.53
           18                     $15.83                   $16.23                   $16.72
           19                     $15.99                   $16.39                   $16.88
           20                     $16.16                   $16.56                   $17.06
           21                     $16.33                   $16.74                   $17.24
           22                     $16.50                   $16.91                   $17.42
           23                     $16.67                   $17.09                   $17.60
           24                     $16.83                   $17.25                   $17.77
           25                     $17.00                   $17.43                   $17.95
           26                     $17.17                   $17.60                   $18.13
           27                     $17.34                   $17.77                   $18.30
           28                     $17.51                   $17.95                   $18.49
           29                     $17.67                   $18.11                   $18.65
           30                     $17.85                   $18.30                   $18.85
           31                     $18.01                   $18.46                   $19.01
           32                     $18.17                   $18.62                   $19.18
           33                     $18.35                   $18.81                   $19.37
           34                     $18.51                   $18.97                   $19.54
</TABLE>


                                       51

<PAGE>   52



                                   APPENDIX B

                               INSURANCE BENEFITS

MEDICAL INSURANCE

        The medical insurance which shall become effective upon the effective
date of this Agreement is contained in a booklet entitled Geneva Steel Health
Plan, a copy of which will be provided to each employee. Such booklet
constitutes a part of this Appendix as though incorporated herein.

LIFE INSURANCE

        Group life insurance in the amount of $25,000 per employee shall be
provided by the Company.

DEPENDENT LIFE INSURANCE

        Life Insurance for eligible dependents shall be provided by the Company
in the amount of $5,000 for spouse and $2,000 for each child.

ELIGIBILITY

        Full-time, permanent employees become eligible for the above benefits on
the first day of the month thirty (30) days after hire. Pre-existing conditions
will be excluded from coverage for a period of nine (9) months.

CONTINUANCE

        In the event of reduction in force, the above-described benefits for
full-time, permanent employees will continue according to the following
schedule:

<TABLE>
<CAPTION>
     YEARS OF SERVICE               INSURANCE CONTINUANCE
     ----------------               ---------------------
<S>                                 <C>

        0 to 5                      End of the month plus two (2) months 
        5 to 10                     End of the month plus four (4) months 
       10 or more                   End of month plus six (6) months
</TABLE>

In all other cases, the benefits cease on the last day worked.



                                       52

<PAGE>   53



SICKNESS AND ACCIDENT

        Employees who become totally disabled as a result of sickness or
accident, as certified by a licensed physician, will be eligible to receive
weekly sickness and accident benefits. Benefits will not be payable for any
period during which an employee is not under the care of a licensed physician.

        The weekly sickness and accident benefits will commence on the eighth
day following an illness and on the first day following an accident and continue
in accordance with the following schedule:

<TABLE>
<CAPTION>
        YEARS OF SERVICE                   WEEKS
        ----------------                   -----
<S>                                        <C>

        1st (After Probation)               13
        1-20 Years                          26
        Over 20 Years                       52
</TABLE>

        The amount of the weekly benefit during the term of this Agreement will
be $350.00 effective May 1, 1998.

        In order for the Company to process claims in a timely fashion and to
determine eligibility for benefits, a claim must be received by the Company
within twenty-one (21) days of the commencement of the disability. If the
employee exceeds twenty-one (21) days, and the employee demonstrates a good
reason that he was unable to file the claim within twenty-one (21) days, an
employee's benefits shall commence on the date of filing if the Company is able
to establish the medical and other factual aspects of the claim and determines
that the employee is eligible for benefits. If the employee is physically unable
to comply with this procedure, he should have someone notify the Geneva Steel
Benefits Office in writing of his disability before the end of the twenty-one
(21) day period.

        Sickness and accident benefits will be administered according to the
Company's processing procedures, and weekly benefits will be reduced under the
following circumstances where other benefits are payable.

               Workers' Compensation: If an employee is otherwise entitled to
sickness and accident benefits and he is making claim for Temporary Total
Disability benefits pursuant to any Workers' Compensation or occupational
disease law, the sickness and accident benefits will be paid only after
satisfactory arrangements are made to assure that any payment of sickness and
accident benefits shall be reimbursed by the employee if the claim for Workers'
Compensation benefits is successful. Such arrangements shall include the
employee's execution of necessary documents authorizing the deduction of any
such overpayment from any payments becoming due as a result of such claim or
from any amount payable the employee by or on behalf of the Company, including
benefits, wages and pension payments.



                                       53

<PAGE>   54



               Long-Term Disability: If an eligible employee becomes permanently
and totally disabled defined as the inability to perform a bargaining unit job
after one (1) full year of disability, he shall be eligible to receive a
long-term disability benefit in the amount of $400 per month for a maximum of
forty-eight (48) months. In order to be eligible for such benefit, an employee
must (a) have fifteen (15) years or more of continuous service at the
commencement of disability; and (b) be actively at work at the commencement of
disability.



                                       54

<PAGE>   55

                                   APPENDIX C

                COVERED SALARIED CLERICAL AND TECHNICAL EMPLOYEES

1.      It is understood that the Clerical and Technical employees represented
        by USWA Local Union 2701, are covered by this Agreement between Geneva
        Steel and the United Steelworkers of America.

2.      The employees of this Clerical and Technical Unit will be paid on a wage
        hourly pay scale as set forth in Appendix A.

3.      The C & T positions will have a guarantee of forty (40) hours work per
        week, which includes unworked hours which are paid on holidays. The
        Company will pay the employees of the C & T unit forty (40) hours per
        week except if the employee is absent without leave. If an employee is
        ill, is involved in an accident which precludes him from working, or has
        a personal family emergency during their scheduled week, and, if
        otherwise qualified, he shall be paid for forty (40) hours that week. A
        supervisor may require certification of an illness by a licensed
        physician when they feel such verification is necessary. After an
        employee is absent from work due to sickness, for a period of seven (7)
        days, he becomes eligible to apply for S & A Benefits commencing on the
        eighth day of illness (see Appendix B).



                                       55

<PAGE>   56


                                   APPENDIX D

         PROFIT SHARING PLAN FOR GENEVA STEEL BARGAINING UNIT EMPLOYEES

        A Profit Sharing Plan for eligible Geneva Steel Bargaining Unit
employees (the "Profit Sharing Plan") will be in effect for the duration of the
contract commencing May 1, 1998. The Profit Sharing Plan will be calculated and
paid annually based on the Company's fiscal year accounting records. The
Company's fiscal year ends on the last day of September of each year.

        A. The Profit Sharing Plan shall be based on the Company contributing to
a pool (the "Profit Sharing Pool") ten percent (10%) of Geneva Steel's adjusted
earnings before taxes and excluding extraordinary items ("A.E.B.T.") for the
fiscal year if A.E.B.T. is positive. A.E.B.T. shall mean earnings before taxes
excluding profit sharing, reduced by Allocated Capital Expenditures. Allocated
Capital Expenditures shall mean twenty-five percent (25%) of all Capital
Expenditures up to $50 million and thirty percent (30%) of all Capital
Expenditures in excess of $50 million. Capital Expenditures shall mean the
aggregate of all the Company's actual capital expenditures (in accordance with
generally accepted accounting principles) for the fiscal year, including capital
maintenance. If for any fiscal year the Company's Capital Expenditures exceed
$85 million or the Company does not have sufficient cash (before payment of
dividends) and/or the ability to borrow funds against its working capital line
to pay profit sharing and have sufficient funds available to cover any then
forecasted negative cash flow in the six months following the scheduled payment
of the profit sharing, the Company shall at its option have the right to pay its
Profit Sharing Pool obligation in the form of shares of the Company's common
stock at a value then agreed to by the Company and the Union, or if they can't
agree, at a value determined by an independent appraiser acceptable to the
Company and the Union, or to defer the obligation for up to two (2) years with
interest at eight percent (8%) per annum. If the parties are unable to agree on
an independent appraiser, they shall select an appraiser in the manner set forth
in Paragraph E below, substituting five (5) qualified appraisers for the five
(5) auditors.

        B. All Bargaining Unit employees shall be eligible to participate in the
Profit Sharing Plan if they were actively at work at any time during the subject
fiscal year. Employees, other than employees who die or retire, whose employment
is terminated, voluntarily or involuntarily, during the fiscal year shall not be
eligible to participate in the Profit Sharing Plan for the subject year.
Probationary employees during their probationary employment period shall not be
eligible to participate in the Profit Sharing Plan under any circumstances nor
shall the first 760 hours of work be considered as eligible hours of work under
this Plan.

        C. The Profit Sharing Pool for each fiscal year, if any, as calculated
pursuant to Paragraph A above shall be allocated to each eligible Bargaining
Unit employee on the basis of each employee's Profit Sharing Plan Hours as
compared to total Profit Sharing Plan Hours. An employee's Profit Sharing Plan
Hours shall mean the lesser of (a) the sum of the hours the employee actually
worked for which the employee is paid during the fiscal year plus the hours for



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<PAGE>   57



which the employee receives vacation pay, or (b) 2080 hours. Total Profit
Sharing Plan Hours shall mean the total of all the eligible Bargaining Unit
employees's Profit Sharing Plan Hours.

        D. The fiscal year Profit Sharing Plan payments to employees, if any,
will be reduced by PDP payments made during the period for which the profit
share is calculated. PDP payments made to all bargaining unit employees during
the fiscal year will first be totaled in the aggregate. Once the Profit Sharing
pool has been determined, the total PDP payments will then be deducted from the
total amount in the Profit Sharing Pool. Profit Sharing Plan payments shall be
made to eligible employees in a separate check during December following the
fiscal year in which they were earned, unless payment is delayed pursuant to
Paragraph F below or deferred pursuant to Paragraph A above. On or before
October 31 of each year, the Company will issue to each eligible Bargaining Unit
employee a summary of the employee's Profit Sharing Plan Hours for the subject
fiscal year and the report to the Union referred to in Paragraph E below. On or
before November 10, following the fiscal year any employee who objects to the
number of hours set forth on his or her summary shall file a written statement
setting forth the basis for the objection. The Union and the Company shall
resolve any disputes promptly. If an individual written objection is not filed
on or before November 10 following the fiscal year, any such objection will be
barred from thereafter being filed. No employee may object on behalf of any
other employee, nor may any employee object to the amount of the Profit Sharing
Pool or the overall allocation thereof.

        E. No later than fifteen (15) days before the anticipated payment date,
the Company will provide the Union with a report of the Company's independent
certified public accountants certifying to the A.E.B.T. and Allocated Capital
Expenditures as set forth above, all in accordance with generally accepted
accounting principles. In addition, reasonable information to support the report
will be furnished upon request.

        The Union shall have the right to retain, at its own expense, an
independent certified public accountant for the purpose of verifying the report
described above. In the event that the Company's CPA and the Union's CPA cannot
resolve their differences, the Company and the Union shall select a third
independent certified public accountant to resolve the matter. If the Company
and the Union are unable to agree to an acceptable independent public
accountant, the parties agree to select an independent accounting firm from a
list of five major independent accounting firms, by a process of elimination
through alternate striking of the firms until only one remains. The list of
major independent accounting firms shall be agreed to in a separate letter of
agreement. The accounting data supplied to the independent accounting firm shall
be limited to data that are essential to verify the Profit Sharing Plan, which
shall include PDP payment deductions, Adjusted Earnings Before Taxes, Actual
Capital Expenditures, profit sharing hours, and, if applicable, cash flow
justification. All confidential or proprietary information supplied or otherwise
made available to the independent accounting firms any union representatives
pursuant to this Agreement shall be held in the strictest confidence and used
only for the purpose of verifying amounts to be distributed to employees under
this plan. The cost of any such audit shall be shared equally by the Company and
the Union. If the Union does not

                                       57

<PAGE>   58



request an independent third audit within forty-five (45) days of its receipt of
the report from the Company's CPA described above, such report shall be deemed
accepted, and the Union shall thereafter have no right to challenge the report
to make a request for any audit for the subject fiscal year.

        F. The Company shall not make any Profit Sharing Plan payments to any
person until all employee objections described in Paragraph D above have been
resolved.

        G. Under no circumstances other than defined below shall the Company be
required to contribute to the Profit Sharing Plan Pool, for any fiscal year more
than the total amount calculated pursuant to Paragraph A above. To the extent
that the Company, for any reason, over-funds the Profit Sharing Plan Pool for
any fiscal year, the Company shall deduct the amount of such over-funding from
the Profit Sharing Plan Pool for the next fiscal year or years in which the
Profit Sharing Plan makes a payment until all the overpayment is recovered. If
for any reason the Company should under-fund the Profit Sharing Plan Pool, the
under-funding shall be repaid and distributed in accordance with this plan.

        H. Payments under the Profit Sharing Plan shall be included as
compensation for income tax, F.I.C.A., union dues and pension purposes, but
shall not be a part of an employee's pay for any other purpose and shall not be
used in the calculation of any other Company payment, allowance or benefit.



                                       58

<PAGE>   59


                                   APPENDIX E

                                TURN COORDINATORS

        The Union and the Company recognize a need for proper manning and
efficient utilization of turn coordinators. A turn coordinator is a true working
member of the crew, who has the responsibility to direct the activities of
others. In order to address and resolve differences concerning this position,
the parties have discussed and agreed to the following:

        1.      The Company will identify to the Union, turn coordinator
                assignments and current personnel who are working as turn
                coordinators. Future turn coordinator vacancies in those
                positions will be filled on a seniority basis from within the
                line of progression. Employees awarded those positions will be
                paid three job classes above the highest job they supervise. If,
                due to an increase in operations or to fill for temporary
                vacancies, additional turn coordinators are needed, they will be
                assigned in seniority order from a list of employees who have
                expressed an interest in being trained as turn coordinators and
                who have satisfactorily completed a voluntary leadership
                training program established by the Company at the Company's
                expense. Employees electing to train as a turn coordinator will
                (1) have the requirements and responsibilities (i.e. personnel
                and crew attendance, safety, work performance, etc.) reviewed
                with them; (2) have their training period outlined; (3) have the
                evaluation system explained and their performance reviewed with
                them a minimum of once every two (2) weeks. If an employee is
                removed from the turn coordinator position, either voluntarily
                or at the discretion of Management, he will return to his former
                incumbent position. Should the employee feel that his/her
                removal from that position was unwarranted, they may initiate a
                grievance consistent with Article 16 of the Agreement.


                                       59

<PAGE>   60


                                   APPENDIX F

                                  SUCCESSORSHIP

        The Company agrees that it will not directly or indirectly sell, convey,
assign, or otherwise transfer any plant or operation or significant part thereof
covered by a Labor Agreement with the United Steelworkers of America to any
other party ("Buyer") who intends to operate the business as the Company had,
unless the following conditions have been satisfied prior to the closing date of
the sale:

        A. The Buyer shall have entered into an Agreement with the Union
recognizing it as the bargaining representative for the employees within the
existing bargaining units.

        B. The Buyer shall have entered into an Agreement with the Union
establishing the terms and conditions of employment to be effective as of the
closing date.

        This provision is not intended to apply to any transactions solely
between the Company and any of its subsidiaries or affiliates, or its parent
company including any of its subsidiaries or affiliates; nor is it intended to
apply to transactions involving the sale of stock, except if (i) a plant or
operation or significant part thereof, which is covered by such Labor
Agreement(s), is sold to a third party pursuant to a transaction involving the
sale of stock of a subsidiary of the Company or (ii) a transaction or series of
transactions results in a change of Control of the Company. For purposes of this
Appendix F, "Control" when used with respect to any business entity means the
power to direct, but not merely influence, the management and policies of such
business entity, directly or indirectly, whether through voting power or by
contract or otherwise. This Appendix F shall not apply to an offering of
registered securities that are sold to greater than twelve (12) investors.


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<PAGE>   61



                                          APPENDIX G

                                    MEMORANDUM OF AGREEMENT

        In order to better implement and apply the provisions of Article 13,
Section 6 Alcoholism and Drug Abuse, and to comply with existing state and
federal laws, the Company and the Union have discussed and agree to the
following terms and conditions as an addendum to Article 13, Section 6, and as
such it is not intended to change or alter any other provisions of the
Collective Bargaining Agreement.

        1.      The initial cutoff levels for the following six (6) drugs or
                classes of drugs shall be used when screening specimens to
                determine whether or not they are negative.

                Marijuana Metabolites        50 ng/ml
                Cocaine Metabolites          300 ng/ml
                Opiate Metabolites           300 ng/ml
                Phencyclidine                25 ng/ml
                Amphetamines                 1,000 ng/ml
                Alcohol                      80 mg/dl

                Any results at or above the foregoing levels will be considered
                a positive test result. In the event NIDA lowers the cutoff
                level for any of the substances listed above, the parties agree
                to lower the level accordingly.

        2.      When an employee is discharged following a positive drug or
                alcohol test, a Step 1 meeting will be held with appropriate
                Management and Union representatives within five (5) working
                days of the date of discharge. If it is determined in the Step 1
                meeting that the discharged employee is to be offered a "Last
                Chance Agreement", the Company representative from Human
                Resources will explain the differences in the two types of Last
                Chance Agreements which may be offered, and the procedure the
                employee is required to follow prior to reinstatement. The
                Company representative and the Union Grievance Committeeman will
                work together to impress upon the employee his/her requirements
                to strictly comply with the terms of the Last Chance Agreement
                which is offered.

        3.      The two Last Chance Agreements to be used are attached as
                Exhibit I and II of this Agreement. The first Agreement (Exhibit
                I) is to be offered in situations where the discharged employee
                recognizes that he/she may have a drug and/or alcohol abuse
                problem. Consequently, the employee will be required to go to
                the Employee Assistance Program for an evaluation, such
                evaluation shall take into consideration the employee's duration
                of usage of drugs and/or alcohol, the addictiveness of such
                substance and the standard treatment for such condition, and if
                required, complete a rehabilitation program. The second type of
                Agreement


                                       61

<PAGE>   62



                (Exhibit II) will be used when the employee maintains that
                he/she does not have an abuse problem and that the drug and/or
                alcohol problem can be corrected without the assistance of a
                rehabilitation program. At a minimum, however, an employee who
                is offered the second type of Agreement must attend a drug and
                alcohol awareness class.

        4.      The Company and the Union agree to establish a "Company/Union
                Drug and Alcohol Abuse Committee." The Committee will consist of
                two (2) members from the Union (the President and the Grievance
                Committee Chairman), and two members of management. In the event
                an employee discharged for drugs or alcohol is from the
                Grievance Committee Chairman's home department, the Secretary of
                the Grievance Committee will replace the Grievance Committee
                Chairman in that one (1) instance. The two Company members will
                be from Human Resources or one member may be a Management
                representative from a department other than the one in which the
                discharged employee works. The Committee will function as
                outlined in the provisions of this Agreement.

        5.      In addition to testing an employee for drugs and alcohol
                consistent with the provisions of Article 13, Section 6, the
                Company may also test an employee who has signed a Last Chance
                Agreement at any time for a period of one (1) year following the
                signing of either type of Last Chance Agreement. Further, the
                Company may also test the employee who is working under the
                terms of a Last Chance Agreement any time he/she returns from
                any absence from work in excess of seven (7) days (excluding
                vacations) for a period of up to five (5) years after the
                signing of the Last Chance Agreement. An employee will not be
                randomly drug or alcohol tested pursuant to this provision
                during the period of time that his enrollment in a
                rehabilitation program has been temporarily delayed through no
                fault of the employee. The period may not exceed fourteen (14)
                days unless mutually agreed to by the parties. The Last Chance
                Agreement will expire after a period of five (5) years after the
                signing of the Agreement, provided there are no further
                infractions of this type in that period of time.

        6.      If an employee tests positive for drugs or alcohol after signing
                a Last Chance Agreement, he/she will be immediately suspended
                from work. The employee will remain on suspension until the
                Company/Union Drug and Alcohol Abuse Committee have an
                opportunity to meet with the suspended employee. The meeting
                will be held within seven (7) working days of the date of the
                employee's suspension. The intent of the meeting will be to hear
                and discuss the employee's explanation for his/her second
                positive drug and/or alcohol test. If the Committee determines
                that the employee had extenuating circumstances which led to
                legitimate and documented reasons for his/her actions (i.e.
                recent divorce, death in the immediate family, etc.), the
                employee may be reinstated with an extended suspension and a
                reinstruction that any additional positive drug or alcohol tests

                                       62

<PAGE>   63



                will result in discharge. If the Committee determines that the
                employee did not have a legitimate reason for a second positive
                test (i.e. the deer hunt, poker game, etc.), the employee's
                suspension will be converted to discharge.

        7.      The Company will supply the Union and the employee with a
                release of information form which an employee may elect to sign.
                The release will allow the appropriate Company Representative to
                supply the employee with the drug and/or alcohol test results
                (including the level at which the employee tested), and to
                supply that information to the Union.

        8.      This Agreement will become effective on the date of the
                Collective Bargaining Agreement, and it will have no bearing or
                affect on any drug and/or alcohol related cases which occurred
                prior to June 14, 1993.



                                       63

<PAGE>   64



                                           EXHIBIT I

                                    MEMORANDUM OF AGREEMENT

        The following Agreement provides John Doe #00000 with the opportunity to
resolve any and all issues related to his discharge (date) for reporting to the
plant and/or working under the influence of illegal drugs (or alcohol). Mr. Doe
has had the following conditions reviewed with him by the Company and the Union
and agrees that he must comply with the following:

1.      Mr. Does must meet with a professional counselor from the Employee
        Assistance Program in order to evaluate the extent of his condition and
        a recommendation for treatment. If a treatment program is recommended,
        or the employee selects a program which exceeds the E.A.P.
        recommendations, he must successfully complete the drug (or alcohol)
        rehabilitation program and supply management with proof of attendance to
        and successful completion of said program. Mr. Doe will be returned to
        employment provided he is medically certified as competent to do so by
        both a qualified representative of the rehabilitation institution and a
        physician.

2.      If a treatment program is recommended and at any time Mr. Doe fails to
        comply with the requirements of that rehabilitation program, such that
        the intent of the rehabilitation effort cannot be met, the agreement to
        return grievant to work will become null and void with his status as an
        employee being converted to discharge. Further, if the rehabilitation
        effort is complete and after having returned to work, he again returns
        to an alcoholic or drug afflicted state or tests positive for illegal
        drugs or is found working in a condition unfit for work, he understands
        he will be suspended pending a review by the Company/Union Drug and
        Alcohol Abuse Committee. If the Committee determines that Mr. Doe was
        clearly responsible for his actions, the suspension will be converted to
        a discharge. If Mr. Doe fails to comply with the terms of the agreement
        and is subsequently discharged, he understands he will not be eligible
        to be rehired as an employee of Geneva Steel.

3.      The discharge issued to Mr. Doe will be converted to a suspension to
        cover a period of time from (date) until the day he returns to work at
        Geneva Steel.

4.      Management has complied fully with Article 13, Section 6 -- Alcoholism
        and Drug Abuse by allowing the employee to return to active employment
        following his evaluation and, if required, involvement in a drug (or
        alcohol) rehabilitation program. With the signing of this Agreement, Mr.
        Doe acknowledged he is not entitled to any further consideration under
        Section 6.

5.      Mr. Doe understands that he must report off in a timely fashion and
        properly substantiate any absences as required by Management consistent
        with department report off and absenteeism policies.



                                       64

<PAGE>   65



6.      Mr. Doe agrees to submit to a drug or alcohol test at any time during
        the next year from the signing of this Agreement, solely at Management's
        discretion, as condition of his continued employment at Geneva Steel.

7.      Mr. Doe agrees to submit to a drug or alcohol test any time he returns
        from an absence from work in excess of seven (7) days (excluding
        vacations) for a period of five (5) years from the signing of this
        Agreement.

8.      This Agreement is without prejudice or precedent and shall not be
        referred to in the handling of similar issues should they arise.


-----------------------------               ---------------------------------
Union Representative                        Management Representative


-------------------                         ---------------------
Date                                        Date

I have read, understand, and agree with the terms of this Agreement.

-----------------------------               ----------------------
Signature                                   Date



                                       65

<PAGE>   66


                                   EXHIBIT II

                             MEMORANDUM OF AGREEMENT

        The following Agreement provides John Doe #00000 with the opportunity to
resolve any and all issues related to his discharge of (date) for working under
the influence of illegal drugs (or alcohol). Mr. Doe has had the following
conditions reviewed with him by the Company and the Union and agrees that he
must comply with the following:

1.      Management has complied fully with Article 13, Section 6 -- Alcoholism
        and Drug Abuse by returning the employee to active employment following
        his positive drug (or alcohol) test on (date). With the signing of this
        Agreement, Mr. Doe acknowledges he is not entitled to any further
        consideration under Section 6.

2.      Mr. Doe has informed the Company and the Union that he is physically
        able to perform the full scope of his job duties and does not require
        any form of rehabilitation. Such being the case, if at any time in the
        future, Mr. Doe is again found to be working in an unfit condition or
        tests positive for illegal drugs (or alcohol), he understands he will be
        suspended pending a review by the Company/Union Drug and Alcohol Abuse
        Committee. If the Committee determines that Mr. Doe was clearly
        responsible for his actions, the suspension will be converted to a
        discharge. If Mr. Doe fails to comply with the terms of this Agreement
        and is subsequently discharged, he understands he will not be eligible
        to be rehired as an employee of Geneva Steel.

3.      The discharge issued to Mr. Doe will be converted to a suspension to
        cover the period of time from (date) until the day he returns to work at
        Geneva Steel.

4.      Mr. Doe understands that he must report off in a timely fashion and
        properly substantiate any absences as required by Management consistent
        with department report off and absenteeism policies.

5.      Mr. Doe agrees to submit to a drug or alcohol test at anytime during the
        next year from the signing of this Agreement, solely at Management's
        discretion, as a condition of his continued employment at Geneva Steel.

6.      Mr. Doe agrees to submit to a drug or alcohol test any time he returns
        from an absence from work in excess of seven (7) days (excluding
        vacations) for a period of five (5) years following the signing of this
        Agreement.



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<PAGE>   67



7.      This Agreement is without prejudice or precedent and shall not be
        referred to in the handling of similar issues should they arise.


-----------------------------               ---------------------------------
Union Representative                        Management Representative


-------------------                         ---------------------
Date                                        Date

I have read, understand, and agree with the terms of this Agreement.

-----------------------------               ----------------------
Signature                                   Date



                                       67

<PAGE>   68



                                   APPENDIX H

                          PERFORMANCE DIVIDEND PLAN FOR
                     GENEVA STEEL BARGAINING UNIT EMPLOYEES

                                  INTRODUCTION

        The Performance Dividend Plan (PDP) is designed to provide incentive
payments to Bargaining Unit employees which recognize their contribution to
increased productivity as compared to base levels. The PDP provides a dividend
for increased Prime Shipped Tons. The PDP will be calculated each month and a
performance dividend for the month will be included in the employee's pay in the
following month consistent with the calculations set forth below.

                                   DEFINITIONS

Shipped Tons

        Shipped Tons include every ton of steel which is produced at the Geneva
Plant, as defined in the Collective Bargaining Agreement, as hot rolled product
through the 132" Mill facility, slabs shipped and sold in slab form to
commercial customers and not further processed in any form at Geneva, and cast
foundry merchant products for merchant sales, and is actually shipped to any
customer during the month for which the calculation is being made.

Secondary Shipped Tons

        Seconds include any steel product which when produced is defective in
relation to the order or specification for which it was made (such as defects in
chemistry, gauge, width, length, shape or surface) or which is damaged in the
course of production, handling or shipping, regardless of when or where that
defect or damage is discovered.

Prime Shipped Tons

Prime Shipped Tons are defined as Shipped Tons minus Secondary Shipped Tons.

Base Prime Shipped Tons

        Because this program is designed to pay a dividend, for performance
above stated levels, a "base" has been defined for Prime Shipped Tons. The
actual base number for each month will vary, depending on the number of days in
the month. A table showing the Base Prime Shipped Tons for each month is set
forth in Determinants and Base Quantities below.



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<PAGE>   69



Fixed Dividend Percent

        A fixed dividend of 2.5% will be paid for the month when the Actual
Prime Shipped Tons exceeds the Base Prime Shipped Tons established for that
month.

Incremental Prime Shipped Tons

        Incremental Prime Shipped Tons are the tons calculated by subtracting
the Base Prime Shipped Tons from the Actual Prime Shipped Tons.

Incremental Prime Shipped Tons Determinant

        The PDP is designed to pay an increasing dividend for each Prime Shipped
Ton above the monthly base. To determine how much each Incremental Prime Shipped
Ton above the Base Prime Shipped Ton is worth, there is a "Determinant", which,
when applied to the incremental tons above the base, will produce a PDP%. The
PDP% when applied to the individual base rate, will determine the dollar per
hour for the PDP payment. The following table shows the incremental Prime
Shipped Tons Determinant.



                                       69

<PAGE>   70


                            PERFORMANCE DIVIDEND PLAN
                        DETERMINANTS AND BASE QUANTITIES

Prime Shipped Tons

1.      Fixed Dividend %:

        Prime Shipped Tons over Base Prime Shipped Tons for the month = 2.5%

2.      Incremental Prime Shipped Tons Determinants:

<TABLE>
<CAPTION>
                                                          Dividend % Per Incremental
               Month                                      Prime Shipped Ton
               -----                                      -----------------
<S>                                                       <C>

               February                                   .00016657%
               February (Leap Year)                       .00016082%
               April, June, September,                    .00015546%
                      November
               January, March, May, July,                 .00015045%
                      August, October, December
</TABLE>

3.      Base Prime Shipped Tons Quantities:

<TABLE>
<CAPTION>
                                                          Base Prime Shipped
               Month                                      Tons Per Month
               -----                                      --------------
<S>                                                       <C>

               February                                   103,562
               February (Leap Year)                       107,260
               April, June, September,                    110,959
                      November
               January, March, May, July,                 114,657
                      August, October, December

</TABLE>


                                       70

<PAGE>   71


                               PRIME SHIPPED TONS

                                      RULES

1.      The PDP will go into effect on the effective date of the Collective
        Bargaining Agreement and will remain in effect for the duration of the
        Agreement. Eligible employees will be those defined as participants
        under the Profit Sharing Plan for Geneva Steel Bargaining Unit
        employees, Appendix D, Paragraph B.

2.      The PDP will be calculated each month and a performance dividend for the
        month will be included in the employee's pay in the following month
        consistent with the calculations set forth in the Determinants and Base
        Quantities shown above.

3.      PDP payments under this plan shall be included as compensation for
        income tax, FICA, union dues, pension purposes, and as otherwise
        required by law, but shall not be part of employee's pay for any other
        purpose.

4.      For purposes of calculating an individual's PDP payout, the Performance
        Dividend will be applied to the lesser of the first 173.3 hours worked
        or the number of hours the employee actually worked during the month.

5.      The fiscal year Profit Sharing Plan payments to employees, if any, will
        be reduced by PDP payments made during the period for which the profit
        share is calculated.

6.      If an employee's PDP payment is less than $.33/hour based on the
        Company's plan, the Company pays the employee $.33/hour on the PDP hours
        determined for the month.



                                       71

<PAGE>   72



                                   APPENDIX I

                                   401(K) PLAN

        Effective March 1, 1996, the Company will provided a twenty-five percent
(25%) match to employee contributions of up to four percent (4%) to the 401(K)
Plan. The matching contribution may be made in cash or in Company stock.
Example: If an employee contributes $100 of his or her gross pay, the Company
will add an additional $25 in cash or Company stock.



                                       72

<PAGE>   73


                                   APPENDIX J

             VOLUNTARY EMPLOYEE BENEFICIARY ASSOCIATION (VEBA) TRUST

        A tax-exempt trust under Section 501(c)(9) of the Internal Revenue Code
("VEBA Trust") to fund post-retirement benefits for future retirees from the
USWA Bargaining Unit was established as part of the 1995 negotiations. The
parties agree to the following modifications with respect to the VEBA trust:

1.      Future Company contributions to the VEBA Trust shall consist of, and be
        limited to: (i) the amount by which forfeitures have reduced or will
        reduce the Company's pension contributions to the Geneva Steel Union
        Employees Savings and Pension Plan from April 1, 1998 through March 31,
        2001, (ii) $.15 for each hour of work performed by Union employees for
        the Company from May 1, 1998 through March 31, 1999; (iii) $.20 for each
        hour of work performed by Union employees for the Company from April 1,
        1999 through March 31, 2000; and (iv) $.25 for each hour of work
        performed by Union employees for the Company from April 1, 2000 through
        March 31, 2001.

2.      There will the three (3) VEBA Trustees appointed by the Company and
        three (3) VEBA Trustees appointed by the Union, with majority of
        appointees of each party required for decision making. In the event of a
        deadlock, the dispute shall be submitted to impartial binding
        arbitration under procedures to be established. The Trust will pay the
        reasonable and necessary administrative costs related to the VEBA Trust,
        excluding fiduciary insurance coverage for Trustees which will be paid
        by the Company.

3.      The VEBA Trustees shall develop a plan of retiree (including dependents
        and surviving spouses) medical and life insurance benefits that has the
        objective of approximating the coverage providing for active Union
        employees. In order to preserve a reasonable portion of Trust assets for
        Union employees retiring after the term of this Agreement, the Trustees
        may require retiree premium contributions by retirees and surviving
        spouses comparable to other Basic Steel companies. In addition, Trustees
        may alter benefits and/or premium contributions to preserve Trust assets
        based on the level of Company contributions, investment returns,
        increases in the cost of providing benefits, and in the event of changes
        in the Company's financial circumstances that would substantially affect
        anticipated VEBA Trust funding.

4.      The Company and Union will agree upon revised VEBA Trust language
        incorporating the above principles.



                                       73

<PAGE>   74


                                   APPENDIX K

                                     LETTER

                                                   February 18, 1998



Mr. Dallas Alexander
United Steelworkers of America
Subdistrict 5
5300 South 360 West, Suite 350
Murray, Utah 84123

        Re:    Right to Make Offer on Sale of Assets

Dear Mr. Alexander:

        In connection with the recently completed negotiations between the
United Steelworkers of America ("USWA") and Geneva Steel Company (the
"Company"), the parties have reached the following understanding:

1.      a.      Should the Company decide or be presented with an offer to
                sell or otherwise transfer: (i) a controlling interest in the
                corporate entity which owns all or a substantial portion of its
                assets (a "Controlling Interest"), or (ii) all or a substantial
                portion of its facilities ("Facilities") (either or both, the
                "Assets"), it will so notify the USWA in writing and grant to
                the USWA the right to organize a transaction to purchase the
                Assets. In no case, however, shall the Company enter into any
                agreement or understanding to sell the Assets without first
                complying with the provisions of this letter unless compliance
                with such prohibition would, based upon an opinion of counsel,
                constitute a breach by an director of such director's
                obligations to the Company or its shareholders. For purposes of
                this provision, a Controlling Interest shall be defined as fifty
                percent (50%) of the common equity stock of the Company or with
                respect to a business entity, the power to direct, but not
                merely influence, the management and policies of such business
                entity, directly or indirectly, whether through voting power or
                by contract or otherwise.

        b.      Subject to the USWA and the Company entering into a
                Confidentiality Agreement, the Company will provide the USWA
                with information and access to Company personnel and facilities
                needed to determine whether it wishes to make an offer. Such
                information and access shall be of the type customarily provided
                to similarly situated prospective purchasers for such Assets.



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Mr. Dallas Alexander
February 18, 1998
Page 2
-------------------------

        c.      During the first thirty (30) days from the date the Company
                notifies the USWA pursuant to Paragraph 1.a above, the Company
                will not enter into a contract for the sale of the Assets unless
                compliance with such prohibition would, based upon an opinion of
                counsel, constitute a breach by any director of such director's
                obligations to the Company and its shareholders. The USWA shall
                be entitled to submit a written offer to purchase the Assets at
                any time during such thirty (30) day period.

        d.      During the next sixty (60) day period, the Company will be free
                to accept offers from other entities for the Assets and the USWA
                will be entitled to submit an offer during such period if
                submitted prior to acceptance by the Company of such other
                entity's offer. During such period, the Company shall provide
                the USWA five (5) business days notice prior to accepting an
                offer from an entity other than the USWA.

        e.      In the event the thirty (30) day period referred to in Paragraph
                1.c has elapsed, the Company shall be entitled, subject to this
                Paragraph 1.e and Paragraph 1.f, to enter into an agreement to
                sell such Assets to any purchaser, including the USWA, provided
                that such a transaction must close within one (1) year after the
                end of such period. If the Assets have not been sold during such
                one (1) year period, the Company must comply again with the
                provisions of this letter agreement before selling such Assets.

        f.      In the event that the USWA submits an offer within the time
                periods set forth in paragraphs 1.c or 1.d above and prior to
                the Company's acceptance of an offer during the period set forth
                in 1.d above, the terms of this paragraph shall apply. The
                Company shall be entitled to enter into a binding purchase
                agreement with regard to the Assets with an entity other than
                the USWA provided that the transaction contemplated by such
                purchase agreement is, in the reasonable business judgement of
                the Board of Directors of the Company, more favorable to the
                Company than the USWA offer. In evaluating such offers, the
                Board of Directors of the Company may take into account any
                relevant factors, such as, without limitation, the purchase
                price, form of consideration, down payment, break up fees,
                security, structure, timing, identity of the offeror, risk of
                non- consummation, impact on business of the Company, other
                obligations of the Company and other relevant legal,
                contractual, financial and political considerations. Nothing
                contained herein shall require the Company to accept any offer
                by an entity, including the USWA, for the purchase of the
                Assets. In the

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Mr. Dallas Alexander
February 18, 1998
Page 3
---------------------

        event that the Company elects to accept an offer, the Company shall not
        be under any obligation to accept an offer from the USWA if it is not
        the most favorable offer or to negotiate with the USWA concerning such
        offer.

2.      The rights granted the USWA under this letter agreement may not be
        transferred or assigned by the USWA except that its rights may be
        assigned to and exercised by an acquisition entity established by or for
        the USWA-represented employees covered by the above-referenced labor
        agreement; and, further provided, that said employees shall own directly
        or indirectly through an employee stock ownership (or similar) plan, a
        material portion of the voting equity interests in such acquisition
        entity.

3.      Notwithstanding the foregoing, the Company's failure to abide by the
        provisions of this Agreement shall not be the basis of preventing the
        sale of assets; rather, the remedy of the USWA shall be limited to
        actual damages which the Company and the USWA agree shall be limited to
        not more than $10 million.

4.      This Agreement shall remain in effect for the term of the Agreement
        between the USWA and Geneva Steel Company, dated May 1, 1998 (the
        "Collective Bargaining Agreement") and shall expire at the termination
        date of said Collective Bargaining Agreement.

5.      Notwithstanding any other term of this Agreement, the provisions of this
        Agreement shall be of no legal effect to the extent such terms are
        inconsistent with the duties and obligations of the Company under any
        financing agreement previously entered into in good faith by the
        Company. The foregoing right to bid shall not be deemed to cover an
        offering of registered securities that are sold to greater than twelve
        (12) investors.

6.      "Confidentiality Agreement" as used herein shall mean a written
        agreement which is reasonably acceptable to the Company and entered into
        between the Company and a prospective purchaser (including, if
        applicable, the USWA) governing the furnishing, confidential treatment
        and use of any non-public, proprietary and/or confidential information,
        whether written or oral, which the Company may provide to a prospective
        purchaser regarding the Company and/or Assets the Company may offer for
        sale. In the event the Company and the USWA are unable to agree upon,
        and execute, such a Confidentiality Agreement, the Company shall not be
        obligated to deliver to the USWA any of said non-public, proprietary
        and/or confidential information.


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Mr. Dallas Alexander
February 18, 1998
Page 4
------------------------

        If the foregoing confirms our mutual understandings and agreements,
please sign and return to me the duplicate original copy of this letter
agreement at your earliest opportunity.

                                   Sincerely,

                                   GENEVA STEEL COMPANY



                                   By: /s/ Carl E. Ramnitz
                                      --------------------------------------
                                       Carl E. Ramnitz
                                       Vice President
                                       Human Resources

ACKNOWLEDGED AND AGREED TO 
this ____day of ______1998.

UNITED STEELWORKERS OF AMERICA


By: /s/ Dallas Alexander
   -----------------------------
        Dallas Alexander

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<PAGE>   78


                                   APPENDIX L

                            PARTIES TO THE AGREEMENT

        The parties to this Agreement shall be the United Steelworkers of
America (the "Union" or the "USWA") and Geneva Steel Company ("Geneva" or the
"Company") and any future Parent Company. Geneva agrees that it will not
consummate a transaction, the result of which would cause the Company to come
under the Control of another company or business entity ("Parent Company")
without first ensuring that said Parent Company becomes a signatory to this
Agreement. The foregoing sentence shall not apply to an offering of registered
securities that are sold to greater than twelve (12) investors. For purposes of
this Appendix L, Control shall be defined as ownership of fifty percent (50%) of
the common equity of the Company.

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<PAGE>   79

                                   APPENDIX M

                        LETTER OF AGREEMENT ON NEUTRALITY

                                                         February 18, 1998



Mr. Dallas Alexander
United Steelworkers of America
Subdistrict 5
5300 South 360 West, Suite 350
Murray, Utah 84123

Dear Mr. Alexander:

        This will confirm our understanding reached during the 1998
Negotiations.

A. NEUTRALITY

        The Company and the Union agree that the Company's continued success and
our employee's continued job security hinge upon a constructive and harmonious
relationship between the Company and the Union built on trust, integrity, and
mutual respect. We are committed to continuing efforts to foster and maintain
such a relationship.

        We also know from experience that when both parties are involved in an
organizing campaign directed at unrepresented Company employees there is a risk
that election conduct and campaign activities may have a harmful effect on
parties' relationship. Therefore, it is incumbent on both parties to take
appropriate steps to insure that all facets of an organizing campaign will be
conducted in a constructive and positive manner which does not misrepresent to
employees the facts and circumstances surrounding their employment and in a
manner which neither demeans the Company or the Union as an organization nor
their respective representatives as individuals.

        To underscore the Company's commitment in this matter, it agrees to
adopt a position of neutrality in the event that the Union seeks to represent
any non-represented employees of the Company.

        Neutrality means that the Company shall not, in any way, hinder the
Union's conduct of an organizing campaign, nor shall it demean the Union as an
organization or its representatives

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Mr. Dallas Alexander
February 18, 1998
Page 2
-------------------


as individuals. Also, the Company shall not provide any support or assistance of
any kind to any person or group opposing Union organization of the Company's
employees.

        For its part, the Union agrees that all facets of its organizing
campaign will be conducted in a constructive and positive manner which does not
misrepresent to employees the facts and circumstances surrounding their
employment. The Union shall not hinder the Company's conduct of its business nor
shall it demean the Company as an organization or its representatives as
individuals.

        The Company's commitment to remain neutral shall cease if during the
course of an organizing campaign, the Union or its agents intentionally or
repeatedly (after having the matter called to the Union's attention)
misrepresent to the employees the facts and circumstances surrounding their
employment or conduct a campaign demeaning the integrity or character of the
Company or its representatives.

B. HIRING

        1. For all hiring in a Covered Workplace (as defined in Section F-4
herein) in any unit(s) appropriate for bargaining (prior to the existence of a
Collective Bargaining Agreement), the Company shall extend preferential
consideration in hiring over outside applicants to qualified interested
employees covered by this Labor Agreement with the USWA (including laid off
employees hereunder), all in accordance with the following.

        2. The Company shall treat applicants who are employees covered by this
Labor Agreement as presumptively qualified for such hiring if they perform or
have performed the same or similar jobs as those to be filled. Nevertheless, it
is understood that the Company shall have the right to reject a particular
applicant covered by this Labor Agreement, provided that the Company can
demonstrate that such applicant lacks reasonable and necessary qualifications or
that other applicants are more relevantly qualified, and provided further that
this Company right shall not be used for the purpose of defeating the existence
of a Union majority among the representative complement of employees in such
bargaining unit(s). In addition, the Company reserves the right to reject
applicants to preclude an unreasonable dilution of skills at an existing
facility.



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Mr. Dallas Alexander
February 18, 1998
Page 3
--------------------


        3. In determining whether to hire any applicant at a Covered Workplace
(whether or not such applicant is an employee covered by this Labor Agreement),
the Company shall refrain from using any interview, test, or other selection
procedure designed and intended, among other things, to eliminate or otherwise
disadvantage applicants based on their attitudes or behavior toward unions or
collective bargaining.

        4. In each case covered hereunder, the parties shall meet prior to any
hiring to discuss in good faith the detailed application of the above principles
and to develop procedures for the consideration and hiring of interested
employees covered by the Company's Labor Agreement with the USWA.

C. SCOPE OF THE UNIT

        As soon as practicable after notification by the Union of its interest
in organizing unrepresented employees, the parties will meet to attempt to reach
an agreement on any issues relating to the scope, appropriateness and makeup of
the unit sought by the USWA. In the event that the Company and the Union are
unable to agree on any such issues, either party may refer the matter to the
Dispute Resolution Procedure contained in Section H of this Neutrality
Agreement.

D. ACCESS TO COMPANY FACILITIES

        Upon written request, such request to be made no more frequently than
twice a year, the Company shall grant access to its facilities to the Union for
an elapsed period not to exceed sixty (60) days for the purpose of distributing
literature and meeting with unrepresented Company employees. Distribution of
Union literature shall not compromise safety or production or disrupt access or
egress. Distribution of Union literature inside Company facilities and meetings
with unrepresented Company employees inside Company facilities shall be limited
to non-work areas during non-work time. Union representatives shall notify
appropriate Company labor relations officials before engaging in the above
activities to schedule access to Company facilities and arrange for access,
including, if requested, tables in non-work areas and shall not disrupt the
normal business of the facility.


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Mr. Dallas Alexander
February 18, 1998
Page 4
----------------------


E. UNION RECOGNITION

        In the event that the Union demands recognition on the basis of a card
majority, the parties will request that the American Arbitration Association, or
other mutually agreeable third-party neutral, conduct a card check within ten
(10) days of the making of the request. The American Arbitration Association or
third-party neutral shall compare the authorization cards submitted by the Union
against original handwriting exemplars of the entire bargaining unit furnished
by the Company and shall determine if a simple majority of the eligible
employees has signed cards. The list of eligible employees shall be jointly
prepared by the Union and the Company.

        If the Union secures a simple majority of authorization cards, as
certified in the procedure described above, of the employees in an appropriate
bargaining unit, the Company, and any other entity required to do so under the
terms of this letter agreement, shall recognize the Union as the exclusive
representative of such employees without a secret ballot election conducted by
the National Labor Relations Board. The authorization cards must unambiguously
state that the signing employees desire to designate the Union as their
exclusive representative for collective bargaining purposes.

F. SCOPE OF THIS NEUTRALITY AND RECOGNITION AGREEMENT

        1. Rules with Respect to Affiliates and Parent Corporation

        For purposes of this letter agreement, the Company also includes (in
addition to the Company): (i) any business entity which owns a controlling
interest in the Company (a "Parent Company"), (ii) any Affiliate of a Parent
Company (any one or combination of (i) and (ii) a "Related Party") or (iii) any
Affiliate of the Company, and the obligations and commitments in this letter
applicable to the Company are applicable to a Related Party and/or any Affiliate
of the Company.

        For purposes of this letter agreement, "Affiliate" means any business
entity, including but not limited to, a corporation, partnership or limited
liability company, in which the company now (i) owns, directly or indirectly,
more than fifty percent (50%) of the equity of such entity or (ii) exercises
Control.


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Mr. Dallas Alexander
February 18, 1998
Page 5
----------------------

        For purposes of this letter agreement, "Control" or "Controlling
Interest" when used with respect to any business entity means the power to
direct, but not merely influence, the management and policies of such business
entity, directly or indirectly, whether through voting power or by contract or
otherwise.

        2. Rules with Respect to Other Covered Entities

        a. For purposes of this letter agreement, Other Covered Entity means any
business entity, including but not limited to, a corporation, partnership or
limited liability company, engaged in the Business, in which the Company
currently has an investment or makes an investment after the date hereof and in
which the Company directly or indirectly: (i) owns more than forty percent (40%)
of the entity of such entity or (ii) owns less than forty percent (40%) equity
interest, but (a) becomes a material investor (equal to at least twenty percent
(20%) of the equity ownership of the entity), (b) makes a material investment or
series of investments (which in the aggregate are equal to at least twenty-five
percent (25%) of the book equity of the Company at the time such investment(s)
is (are) made) or (c) exercises Control over the entity.

        Other Covered Entity shall also include any business entity including,
but not limited to a corporation, partnership or limited liability company,
engaged in the Business, in which the Company holds less than a forty percent
(40%) equity interest and in which the Company and other companies which are
obligated to the Union under a "Neutrality" provision similar to the provisions
hereof hold interests which when combined with the Company's interest constitute
a Controlling Interest.

        It is understood that the relationship between the Company and any
Affiliate or Other Covered Entity shall be a "Covered Relationship." For
purposes of this letter agreement, the "Business" means (i) the mining,
refining, processing, production, handling, or transportation of raw materials
used in the making of steel, (ii) steelmaking, steel-finishing, steel-processing
or steel-fabricating or (iii) other similar business.

        b. The Company shall not hereafter enter into any agreement or
arrangements which would, by virtue of such agreement or arrangement, create an
"Other Covered Entity" without first ensuring that said Other Covered Entity
adopts this letter agreement, but solely with respect to the other Covered
Entity and any entity thereafter created, directly or indirectly, by said Other
Covered Entity.



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Mr. Dallas Alexander
February 18, 1998
Page 6
----------------------

        c. With respect to any entity with which the Company currently has a
Covered Relationship, the Company shall cause such Other Covered Entity to
become party to this Neutrality Agreement and achieve compliance with its
provisions.

        3. Rules with Respect to a Parent Company

        The Company agrees that it will not consummate a transaction, the result
of which would directly or indirectly cause the Company to come under the
Control of another Company (a "New Parent") without first ensuring that said New
Parent to the extent it is engaged in the Business, and any entity that is
engaged in the Business with which the New Parent thereafter establishes a
Covered Relationship, agrees to be bound by this Neutrality Agreement. This
paragraph shall not apply to an offering of registered securities that are sold
to greater than 12 investors.

        4. Covered Workplace

        For purposes of this Neutrality Agreement a "Covered Workplace" shall
mean any workplace which employs or intends to employ employees who are eligible
to become represented by a labor organization and which is required to adopt
this letter agreement pursuant to the terms hereof.

G. BARGAINING IN NEWLY-ORGANIZED UNITS

        Where the Company recognizes the Union pursuant to the above procedures,
the parties shall meet within fourteen (14) days to begin negotiations for a
collective bargaining agreement covering the new bargaining unit. The Union
agrees that the new collective bargaining agreement shall reflect the spirit of
partnership between the Company and the Union and that the model for such new
agreement with regard to employment security, work systems and working
conditions shall be the current contract between the Union and the Company,
modified with respect to wages, benefits and practices to take into account the
industry and the geographic location of the newly organized entity.

        If, after sixty (60) days from the commencement of such negotiations,
the parties are unable to successfully negotiate a labor agreement, the matter
shall be submitted to interest arbitration in accordance with procedures to be
developed by the parties.



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Mr. Dallas Alexander
February 18, 1998
Page 7
------------------------

H. DISPUTE RESOLUTION

        Any alleged violation or dispute involving the terms of the foregoing,
including unit determination, may be brought by either party to a Joint Board of
Arbitration made up of one (1) representative each of the Company and the Union.
If the alleged violation or dispute cannot be resolved by the Joint Board of
Arbitration such dispute shall be referred to an arbitrator selected from the
Arbitration Panel. A hearing shall be held fourteen (14) days from the referral
and the arbitrator shall issue a decision within five (5) days thereafter. Such
decision shall be in writing but need only succinctly explain the basis for the
findings. All decisions by the arbitrator pursuant to this letter shall be based
on the terms of this letter and the applicable provisions of the law.

                                        GENEVA STEEL COMPANY



                                        By: /s/ Carl E. Ramnitz
                                           ----------------------------------
                                            Carl E. Ramnitz
                                            Vice President
                                            Human Resources

ACKNOWLEDGED AND AGREED TO 
this ____day of _____________1998.

UNITED STEELWORKERS OF AMERICA


By: /s/ Dallas Alexander
   ------------------------------
        Dallas Alexander



                                       85

<PAGE>   86


                                   APPENDIX N

                              PARTNERSHIP AGREEMENT
          MEMORANDUM OF UNDERSTANDING ON UNION AND EMPLOYEE INVOLVEMENT

SECTION 1 -- PURPOSE AND INTENT.

        The Union and the Company agree that their goal is to attain the
objectives set forth in this Memorandum. They also agree that these goals can
best be accomplished when information and decision-making authority as well as
responsibility are shared at all levels of the business. Accordingly, the
parties have agreed to work toward the objective of establishing a strategic
partnership. This commitment to working together on an ongoing basis must extend
from the Board Room and the Executive Office to the Shop Floor and the Union
offices and be driven by a shared vision of the needs for continuous improvement
in joint decision-making processes, employee participation, the parties'
relationship, and all aspects of the business.

        The purpose of this Memorandum is to provide a framework for Union and
employee participation in joint decision making; full and continuing access by
appropriate Union representatives to the books, records and information relevant
to the purposes and objectives of this Memorandum; encouraging the
implementation of new and innovative approaches to the way work is performed;
and the establishment of a comprehensive training and education program, all as
further described herein.

        The parties recognize that the changes contemplated by this Memorandum
must evolve. Accordingly, the local parties must have the flexibility to design
participative structures that best meet their needs at any given time and that
can change as Company circumstances and experience warrant.

SECTION 2 -- OBJECTIVES.

        In furtherance of their understanding on long-term employment security,
the parties have agreed to pursue the following objectives and commitments:

        A.      Improving the quality, service, productivity and competitiveness
                of the business and its products and seeking profitability on a
                sustained basis;


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        B.      Work environments that are safer, fairer, more equitable, less
                authoritarian and less stressful;

        C.      The ability to respond rapidly to changes in the marketplace, in
                products and in customer needs;

        D.      Increased worker responsibility and influence in workplace
                decision-making;

        E.      Joint mechanisms by which technology will serve the interests of
                both the business and the workers affected by the change;

        F.      Full and timely access by the Union and all employees to
                information concerning Company decisions affecting the working
                lives of employees;

        G.      Understanding the current state of competitiveness and its
                relationship to "World Class" standards;

        H.      Reduction of all overhead costs, including managerial,
                supervisory, and other non-bargaining costs;

        I.      Encouraging the use of problem solving approaches to issues;

        J.      Commitment to higher skill development, better jobs, education
                and more productive utilization of a skilled work force;

        K.      Compliance with public policy and environmental laws and
                regulations;

        L.      Acceptance and support by the Company of the Union and
                acknowledgment of its role as an essential vehicle in attaining
                these objectives;

        M.      Acceptance and support by the Union of the Company and
                acknowledgment by the Union of its role as an essential vehicle
                in attaining these objectives.

SECTION 3 -- FULL AND CONTINUING ACCESS TO INFORMATION.

        At all times during the term of the Basic Labor Agreement, appropriate
Union representatives (including consultants and advisors) shall have access to
financial and operational information that is relevant to the development and
implementation of the Business Plan as well as reasonable access to Company
employees and advisors who are responsible for such information. As used in this
Memorandum, the term "Business Plan" shall refer to the Company's short-term
business plan and long-term strategic and operating plan, including such
elements as those involving products, pricing, markets, capital spending, short
and long-term cash flow forecasts, and the method and manner of funding or
financing the Business Plan.

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Without limiting the foregoing, the Company shall provide the appropriate Union
representatives with early practicable notification of any contemplated
significant transactions involving mergers, acquisitions, and continuing updates
regarding dispositions, joint ventures and new facilities to be constructed or
established by the Company, its subsidiaries, joint ventures, or other entities
in which the Company has a financial interest. Access to and the use of the
types of information described in this paragraph will be covered by a
confidentiality agreement in form and substance satisfactory to the parties.

        The Union will provide the Company with information regarding Union
activities, organizational changes, bargaining and political objectives, other
plans or developments that might affect the Company and appropriate access to
the Union officers and its Executive Board.

SECTION 4 -- COMPREHENSIVE TRAINING AND EDUCATION PROGRAM FOR COMMITTEE MEMBERS,
BARGAINING UNIT EMPLOYEES, AND NON-BARGAINING UNIT EMPLOYEES.

        The parties recognize that the goals of this Memorandum can be attained
only by a commitment to comprehensive and ongoing training and education.
Accordingly, the Joint Leadership Committee (described below) shall establish
training programs necessary to the purposes of this Memorandum. Without limiting
the comprehensiveness or continuity of the training and education required by
this Memorandum, such activities will, unless otherwise agreed to, include at
least the following minimum standards and guidelines:

        A.      Both Company and Union representatives shall receive training by
                their respective organizations in how, consistent with their
                organization's goals, they can accomplish the objectives of this
                Memorandum through participation and involvement activities and
                such training shall, unless otherwise agreed to, include up to
                the following levels, it being understood that during the first
                year of this Agreement the following are minimum levels:

                1.      All members of the Joint Leadership Committee and
                        Facilitators and Assistants: five (5) days per year.

                2.      All members of the Department Boards and any Joint
                        Problem Solving Teams: twelve days per year.

                3.      All other leadership figures of the local parties to
                        this Memorandum: five (5) days per year.

        B.      By mutual agreement, the Joint Leadership Committee shall
                sponsor a program for at least annual orientation and
                appropriate training of all members of joint committees created
                under this Memorandum.


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        C.      The Joint Leadership Committee shall develop a training program
                designed to increase the skills of Bargaining Unit and
                Non-Bargaining Unit employees concerning the purposes of this
                Memorandum. Such program shall commence with instruction on how
                best to pursue organizational objectives through participation
                activities, such instruction to satisfy the following minimum
                levels: for Bargaining Unit employees, a one-day Union-taught
                orientation session; for front line supervisors, managers, and
                other excluded personnel a one-day management-taught orientation
                session.

        D.      The Company shall fund all training programs referred to in this
                Section. This shall include reasonable and necessary expenses
                incurred by employees and employee time spent in such training
                as though it were time worked and employees shall suffer no loss
                of earnings as a result thereof. The Joint Leadership Committee
                shall establish reasonable policies and procedures for the
                application of this paragraph.

        E.      Training referred to in this Section, other than Union training,
                shall be jointly developed and implemented.

SECTION 5 -- PARTNERSHIP MECHANISMS.

        A.      Joint Leadership Committee

                1.      Appointment and Composition

                        A Joint Leadership Committee ("J.L.C.") shall be
                        established. The Co-Chairmen of this Board will be Chief
                        Executive Officer of the Company and the District
                        Director. The other members shall include the Vice
                        President-Human Resources, plant manager of the plant,
                        the Union staff representative, the Local Union
                        President, and Local Union members appointed by the
                        Local Union President. If any one of the designated
                        Union representatives is serving on a similar committee
                        at another steel company (to which the Company objects)
                        or is otherwise unable to serve on the J.L.C., the
                        District Director shall appoint an alternate. The J.L.C.
                        total number of members shall not exceed ten and shall
                        have an equal number of management and Union
                        representatives.

                2.      Meetings

                a.      The J.L.C. shall hold its meetings at least quarterly
                        and, whenever possible, in conjunction with the
                        Company's business planning meetings. These meetings
                        will be for the purpose of reviewing and ensuring
                        progress in the development and implementation of
                        Partnership programs. A

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<PAGE>   90



                        review of and discussion of the current business status
                        and future outlook for the Company will be a regular
                        agenda item at these meetings.

                b.      All members of the J.L.C. shall have the opportunity to
                        attend and participate on a monthly basis in a normal
                        staff meeting of top management officials. Such members
                        of the J.L.C. shall give reasonable advance notice of
                        their desire to attend any such meeting and shall
                        cooperate with the Company in the scheduling and
                        arranging of such attendance and participation, the
                        availability of which shall not be unreasonably withheld
                        by the Company. Nothing in this Memorandum shall permit
                        the Union members of the J.L.C. to participate in the
                        portion of any managerial meetings in which the subject
                        matter involves the Company's strategy for collective
                        bargaining negotiations, grievances and other labor
                        relations issues or legal claims, including, without
                        limitation, lawsuits or administrative proceedings
                        involving the Union or employees of the Company,
                        salaried compensation, management development
                        activities, and similar personnel matters.

        3.      Information

                Subject to Section 3, the Joint Leadership Committee shall
                receive detailed and in-depth reports regarding all significant
                business and labor matters relating to: the Business Plan;
                technological changes and plans; manpower planning; safety and
                health measures; customer evaluation; major organizational
                issues; facilities utilization; and other significant issues and
                concerns raised by the members of the J.L.C.

        4.      Reports

                Consistent with Section 2 above, the J.L.C. shall report to
                Local Union and management personnel (which shall include all
                members of Plant-wide and Department-level Boards as well as any
                Problem Solving Committees they may establish) on matters such
                as: activities of the J.L.C., major issues being considered by
                the J.L.C. and information relevant thereto; other information
                to keep the Local Union leadership and management informed and
                capable of further discussion of issues related to the Plant and
                the Union.

        5.      Role of the Joint Leadership Committee

                a.      The Union members of the Joint Leadership Committee
                        shall have joint decision-making authority with respect
                        to the Business Plan as defined in section 3 above as
                        well as significant technological changes as defined in
                        Section 5.A.(6)(b) of this Memorandum.

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                b.      The J.L.C. will be responsible for developing and
                        implementing programs to achieve the objectives of
                        Section 2 of this Memorandum.

                c.      The Joint Leadership Committee shall work toward
                        achieving improved productivity levels through the
                        Plant, bearing in mind the competition in the products
                        produced at the Plant. To this end, the J.L.C. shall
                        have the ongoing responsibility to ensure that they and
                        the Department-level Boards (described below):

                        (1)     Understand and communicate the current state of
                                competitiveness and its relationship to "World
                                Class" standards.

                        (2)     Identify areas and activities for special
                                emphasis on improvement, and work with the
                                appropriate Departmental Boards in implementing
                                plans for such improvements.

                        (3)     Identify and address inter-departmental,
                                inter-unit or other barriers which are impeding
                                improvement.

                        (4)     Monitor the management of employees available as
                                a result of productivity improvements and the
                                value received from their efforts.

                        (5)     Establish budgets for partnership programs.

                6.      Scope of Responsibility

                a.      Workplace Redesign

                        (1)     Authorization

                                At the request of the J.L.C. (which shall
                                include the assent of a majority of the union
                                members of the J.L.C.) The parties may agree to
                                establish an Approved Work Redesign Program. An
                                Approved Work Redesign Program within the
                                meaning of this Memorandum is a workplace
                                redesign program that includes: the
                                establishment of operating work groups or teams
                                of self-directed work teams or groups; or the
                                implementation of other new and improved ways of
                                performing work.

                        (2)     Required Elements



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                                Any workplace redesign program in the bargaining
                                unit that involves the establishment of
                                operating work groups or teams or self-directed
                                work teams or groups must be: a joint endeavor;
                                cause the workplace to be more open, more safe,
                                more equitable, less authoritarian and less
                                stressful; eliminate unnecessary supervision;
                                change the role of supervisors from directing to
                                coaching; and give the workers greater
                                influence, responsibility and input into
                                day-to-day operations, including, if the J.L.C.
                                so determines, planning, scheduling and
                                administrative functions not traditionally
                                performed by bargaining unit members.

                b.      Technological Change

                        The J.L.C. shall establish a new technology development
                        and implementation program (Technological Change
                        Program) which shall include the following elements:

                        (1)     Advance Notice

                                The Company shall provide the J.L.C. advance
                                notice of any proposed significant technological
                                change no later than the time the Company's
                                outline of various options with respect thereto
                                is first developed. Such notice shall be in
                                writing, shall contain to the extent possible
                                supporting information outlined below, and shall
                                include updates of new or revised information
                                necessary to full and current understanding of
                                the proposed change. In the case of emergency
                                technological changes, the Company shall give
                                the maximum notice and information possible
                                under the circumstances.

                        (2)     Information

                                Within the time periods referred to above, the
                                Company shall give the J.L.C. the following
                                information:

                                (a)     a description of the purpose and
                                        function of the technological change,
                                        and how it would fit into existing
                                        operations and processes;

                                (b)     the estimated cost of the technology, a
                                        cost justification of it, and the
                                        proposed timetable for it;


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<PAGE>   93



                                (c)     disclosure of any service or maintenance
                                        warranties or contracts provided or
                                        required by the vendor (if any);

                                (d)     the number and type of jobs (both inside
                                        and outside the bargaining unit) which
                                        would be changed, added, or eliminated
                                        by the technological change;

                                (e)     the anticipated impact on the skill
                                        requirements of the work force;

                                (f)     details of any training programs
                                        connected with the new technology
                                        (including duration, content, and who
                                        will perform the training);

                                (g)     an outline of other options which were
                                        considered by the Company before
                                        formulating its proposed changes; and

                                (h)     the expected impact of the change on job
                                        content, pace of work, safety and health
                                        training needs, and contracting out.

                                Union representatives on the J.L.C. may request
                                and receive reasonable access to Company
                                personnel knowledgeable about any proposed
                                technological change (including outside
                                consultants) to review, discuss, and receive
                                follow-up information concerning any
                                technological changes proposed by the Company or
                                Union or their effects on the bargaining unit.

                                The use of the information contemplated by this
                                subsection will be covered by a confidentiality
                                agreement in form and substance satisfactory to
                                the parties.

                        (3)     Union Joint Decision-making Authority with
                                Respect to Technological Change

                                The Union members of the J.L.C. shall have joint
                                decision-making authority with their Company
                                counterparts over both the decision to make
                                technological change and the effects of such
                                change. With respect to the effects of such
                                change they shall consider the following: the
                                number and type of jobs required by the changed
                                technology; the skill and training requirements
                                for each such job; the details of any new or
                                changed training associated with the technology;
                                the inclusion of such job in the bargaining
                                unit; any new work rules or operating procedures
                                associated with the

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<PAGE>   94

                                technology; and any health, safety, or
                                environmental programs required by the
                                technology.

                        (4)     As used herein, the term "technology" shall mean
                                significant advances in machinery, equipment,
                                controls and materials, and changes in software
                                that significantly change the content of
                                bargaining unit jobs. The phrase "technological
                                change" shall mean introduction of new
                                technology, significant changes in existing
                                technology, or both.

        B.      Department-level Boards

                1.      The J.L.C. shall establish Department-level Board
                        Committees in specific departments or operational units
                        for purposes as outlined herein, and as agreed to by the
                        parties. The Department-level Board Union co-chair shall
                        be appointed by the Local Union President and the
                        Company co-chair shall be appointed by management.
                        Additional members of the Department Board Committee
                        shall be drawn equally from the Company and Union.

                2.      Department Boards shall study matters assigned to them
                        by the J.L.C. or as they may agree upon and report any
                        findings back to the J.L.C. Such matters may relate to,
                        among other things, continuous improvement in quality,
                        customer satisfaction, productivity, costs, job
                        enrichment/enhancement, safety and improved work life.
                        Upon direction of the J.L.C., Department Boards may: (i)
                        devise measurements and goals to meet plans adopted by
                        the J.L.C.; and (ii) be responsible for communicating
                        plans, results, business information, and overall
                        employee involvement updates to the employees in their
                        area and to the Joint Leadership Committee.

                3.      Department Boards shall receive the resources (including
                        problem solving training and information) necessary for
                        them to determine the best solution to specific
                        problems. They shall not have the authority to modify,
                        detract, or delete any portion of the Local Seniority
                        Agreement or the Basic Labor Agreement.


        C.      Problem Solving Teams

                1.      The J.L.C. may create one or more Problem Solving Teams
                        to study and report back on a specific problem or
                        project. They shall receive the 


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                        resources (including problem solving training and
                        information) necessary for them to determine the best
                        solution to specific problems.

SECTION 6 -- EMPLOYEE COMMUNICATIONS.

        A.      Critical to the accomplishment of the objectives of this
                Memorandum is timely, ongoing, and unimpeded communication
                between and among the committees created by this Memorandum and
                employees. Accordingly, the parties agree as follows:

                1.      The results of any meetings of Joint Committees created
                        by this Memorandum, including the information and
                        opinions exchanged, the conclusions reached, and the
                        level of participation achieved may be conveyed as the
                        parties shall decide to all employees through their
                        working groups by joint communication from Union
                        representatives and department supervision.

                2.      J.L.C. shall encourage behaviors, attitudes, forums, and
                        opportunities that enlist the know-how and ingenuity of
                        workers in achieving the goals of this Memorandum. The
                        J.L.C. may convene meetings of any combination of
                        employees, Department Boards, and Problem Solving
                        Committees to advance the purposes of this Memorandum.

                3.      As the activities fostered by this Memorandum proceed,
                        it is expected that joint committees will need to
                        consult with and observe the work of committees at other
                        Plants outside the Company. The J.L.C. may consider
                        appropriate means for disseminating reports of the
                        activities of the Department Boards or Problem Solving
                        Teams among each other.

SECTION 7 -- SAFEGUARDS AND RESOURCES.

        A.      No joint committee may amend or modify the Basic Labor
                Agreement.

        B.      No committee authorized by this Memorandum may effect any action
                with respect to contractual grievances.

        C.      Service on any Plant-wide, Departmental, or Problem Solving Team
                created under this Memorandum shall be voluntary.

        D.      The Union will strive to be a full participant in the processes
                and mechanisms established by this Memorandum and Bargaining
                Unit employees will be encouraged and expected to perform their
                duties within the parameters established 


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<PAGE>   96

                hereunder. However, no employee may be disciplined or discharged
                for lack of commitment to participation or involvement
                processes.

        E.      Employee participation and training shall normally occur during
                normal work hours and the employee shall be compensated and
                reimbursed in the same manner as set forth in Section 4.D.
                above.

        F.      No committee established under this Memorandum may recommend or
                effect the hiring, discipline, or discharge of any employee.

        G.      At the invitation of the Co-Chairs of any committee created
                hereunder, appropriate Union representatives, Company
                representatives or outside experts may attend a Committee
                meeting.

        H.      All meeting time and necessary and reasonable expenses of joint
                committees shall be paid for by the Company and employees
                attending such meetings shall be compensated and reimbursed in
                the same manner as set forth in Section 4.D. above.

        I.     Union members on joint committees shall be entitled to: adequate
               opportunity on Company time to caucus for purposes of study,
               preparation, consultation, and review, and shall be compensated
               and reimbursed in the same manner as set forth in Section 4.D.
               above. Requests for caucus time shall be made to the appropriate
               Company management representative in a timely manner, and such
               requests shall not be unreasonably denied.

        J.     Joint committees may agree to employ experts from within or
               outside the Company as consultants, advisors or instructors and
               such experts shall be jointly selected and assigned.

        K.     Decisions on the selection or retention of facilitators shall be
               made by the J.L.C. whose members shall give due regard for the
               needs of their constituents.


SECTION 8 -- FINAL DECISION MAKING AUTHORITY.

        A.      The parties have entered into this Partnership Agreement for the
                purpose of making the Union and the employees participants in
                the joint decision making process of the Company. After sharing
                information and fully discussing and exchanging ideas and fully
                considering all views about issues of mutual interest and
                concern to the parties, decisions should be reached that are
                satisfactory to all. It shall be the goal of the Committee to
                abide by a consensus decision-making 



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<PAGE>   97

                model in rendering decisions, resolving issues and implementing
                plans for the success and well-being of the enterprise and its
                employees.

                The Joint Leadership Committee shall bear responsibility for
                making decisions and resolving issues relative to development
                and implementation of policies and procedures (as well as the
                nature of employee involvement) in matters which regard, but are
                not limited to, the following:

                1. Counseling with respect to work-related problems;

                2. Monitoring compensation plans, if any, agreed upon by the
                parties, such as bonus payment plans;

                3. Interpersonal skill development for all members of the
                enterprise through training in leadership, consensus
                decision-making, issue resolution and team building; and

                4. Establishment of mutually agreed upon work patterns and
                schedules.

        B.      Finally, in the event joint decision-making is unable to produce
                agreement over a matter as to which, absent this Memorandum,
                management has the right to make a unilateral decision, the
                management person responsible shall have the right to make a
                final decision concerning such matter, and such decision shall
                not be subject to the grievance procedure. With respect to any
                matter in this Memorandum which deals, in part, with various
                matters as to which Management has not heretofore had the
                unilateral right to make decisions, this Memorandum gives
                Management no greater right to make unilateral decisions
                regarding such matters than it would have in the absence of this
                Memorandum. In all events, the process of decision making under
                this Memorandum (including the full participation of the Union
                representatives and employees in the process as provided in this
                Memorandum and the Company's commitments concerning information,
                access, and training in this Memorandum) is subject to the
                grievance procedure and arbitration. As to a particular
                decision, the Company's failure to follow the procedural
                requirements of this Memorandum shall not be the basis for
                preventing the implementation of that decision. The dispute
                shall be heard by an Arbitrator provided for under the grievance
                and arbitration provisions of the Collective Bargaining
                Agreement.

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<PAGE>   98

                                 April 14, 1998



Mr. Dallas Alexander
United Steelworkers of America
Subdistrict 5
5300 South 360 West, Suite 350
Murray, Utah 84123

Dear Dallas:

        As part of the 1998 labor agreement, the parties have entered into a
comprehensive partnership agreement that includes a joint effort to accomplish
gains in productivity and to take advantage of attrition by instituting modern
work practices.

        In order to help assure the success of this extremely important program,
the company and union agree that the newly established Joint Leadership
Committee will immediately explore upon its establishment the assignment of a
Bargaining Unit employee as a full-time facilitator assigned to work under the
direction of the co-chairs of the partnership committee.

                                        Sincerely yours,

                                        GENEVA STEEL COMPANY


                                        By: /s/ Carl E. Ramnitz
                                            ------------------------------------
                                            Carl E. Ramnitz
                                            Vice President Human Resources

ACKNOWLEDGED AND AGREED TO 
this ____ day of _______________, 1998.

UNITED STEELWORKERS OF AMERICA

By: /s/ Dallas Alexander
    -------------------------------------
        Dallas Alexander

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<PAGE>   99


                                   APPENDIX O

                       MEMORANDUM OF UNDERSTANDING ON THE
                   REVITALIZATION OF TRADE AND CRAFT TRAINING

The parties are committed to the establishment and preservation of a highly
skilled, efficient maintenance workforce in sufficient number to carry out a
successful maintenance program. It is also their purpose to accomplish the
foregoing as much as possible with Bargaining Unit employees.

Therefore the following shall apply:

A.      Trade and Craft Review Committee

        Within three (3) months of the effective date of the 1998 Basic Labor
        Agreement, the local parties will establish a Joint Trade and Craft Plan
        Committee, made up of two (2) representatives designated by the Local
        Union, and an equal number of representatives designated by the Company,
        at least one (1) of whom shall be experienced in maintenance supervision
        or maintenance management. The Committee will meet regularly and will
        receive required technical assistance from appropriate Company or Union
        resources.

B.      Study of Trade and Craft Workforce

        The Committee will be responsible for examining the present maintenance
        workforce, considering such future changes in maintenance requirements
        that can be identified, and developing the specific information
        described below:

        1.      determine the number of maintenance employees in each trade or
                craft;

        2.      develop an age profile for all craft employees;

        3.      assess the anticipated attrition rates for the maintenance
                workforce over the next five (5) years;

        4.      assess the availability of employees in the plant's workforce
                who are qualified to enter craft training programs;

        5.      identify potential avenues by which employees can receive basic
                education training to qualify for craft training programs;

        6.      evaluate the appropriateness of existing and new craft training
                programs, and the necessity of developing additional craft
                training programs, giving due

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<PAGE>   100


                consideration to changing technology and future skill needs.
                Recommend changes to standards, type, and length of training as
                appropriate.

        7.      examine current craft overtime levels;

        8.      examine methods by which productivity can be improved through
                additional training of craft employees;

        9.      examine the plant's projected new construction, replacement, and
                rehabilitation programs during the next five years, recognizing
                that such programs are susceptible to termination, modification,
                and scheduling change, and assess potential craft involvement in
                such work; and

        10.     assess the level of plant trade and craft forces necessary to
                meet reasonably anticipated long-term future maintenance needs,
                bearing in mind all the above items and given the anticipated
                modernization and possible future workforce restructuring.

        The Study will commence immediately upon the establishment of the
        Committee.

C.      Maintenance Training Plan

        Within six (6) months from the date of its establishment, the Committee
        will submit a report to the Union Sub-district director and the Company
        Vice President of Human Resources, setting forth its findings with
        respect to the matters set forth in Section B. In addition, the
        Committee will develop a recommendation for implementation of a Trade
        and Craft Training Plan designed to fill anticipated maintenance needs.
        The recommended plan will include an implementation date, the minimum
        number of employees to be trained or retrained in each trade or craft
        within a defined period, the method of training, and provisions for
        upgrading the skills of incumbent trade or craft employees. In
        developing the plan, the following guidelines/goals shall apply:

        1.      provide sufficient number of trained trade and craft employees
                to meet long-term future maintenance needs, without the use of
                excessive overtime, and in accordance with the contracting out
                provisions of the Basic Labor Agreement, bearing in mind
                anticipated modernization and possible future workforce
                restructuring;

        2.      make reasonable efforts to draw qualifiable trainees for trade
                and craft occupations from the ranks of the current workforce;
                and


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        3.      complete training as quickly as feasible, consistent with the
                actual requirements of the trade or craft job, as determined by
                the Committee, and giving due consideration to the cost of such
                training.

        The Committee report will include separate statements by the parties
        with respect to any finding or recommendation to which they disagree.

D.      Action by the Union and Company
        (i.e. District Director & Vice President of Human Resources)

        Within sixty (60) days of receipt of the report submitted by the
        Committee, the Chairmen may: (1) approve an agreed-upon plan submitted
        by the parties; (2) modify any plan as they may mutually agree; or (3)
        disagree, in whole or in part, with respect to any recommendations
        contained in a submitted plan. With respect to any plan components as to
        which the Chairmen disagree, the dispute will be promptly referred to an
        Arbitrator selected from the Arbitration Panel, the arbitration to be
        conducted pursuant to procedures to be agreed upon by the Chairmen of
        the Committee. The dispute will be resolved on the basis of a "final
        offer" submission by the parties at a hearing. The Arbitrator will
        determine which of the submissions best meets the guidelines and goals
        spelled out in Section C of this Memorandum of Understanding. The
        Arbitrator shall have the power to determine the procedures pursuant to
        which the hearing is conducted.

E.      Preservation of Plan

        Except where the training or continued training of additional trade and
        craft employees is no longer justified due to changed conditions such as
        depressed economic periods and/or facility shutdowns, the agreed to plan
        shall not be discontinued during the term of the Basic Labor Agreement.

Approved by:

GENEVA STEEL COMPANY                        UNITED STEELWORKERS OF AMERICA



By: /s/ Carl E. Ramnitz                     By: /s/ Dallas Alexander
    -----------------------------               --------------------------------
        Carl E. Ramnitz                            Dallas Alexander


Date:___________________________            Date:_______________________________




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<PAGE>   102


                                   APPENDIX P

                   JOINT REVIEW OF OUTSIDE COMMERCIAL ENTITIES

Mr. Dallas Alexander
United Steelworkers of America
Subdistrict 5
5300 South 360 West, Suite 350
Murray, Utah 84123

Dear Mr. Alexander:

        During the 1998 negotiations, the Union expressed interest in improving
the quality of the Company's purchasing and supply relationships. This letter
will serve to confirm our understandings on this subject.

        In our discussions, the Company confirmed that it already seeks to
promote a practice of using only vendors and suppliers meeting minimum standards
of corporate responsibility. In this connection, the Union has raised two
concerns: first, as a procedural matter, that the Union be given a voice in the
selection of bidders, suppliers, vendors, providers, consultants, and the like
(hereinafter "Outside Commercial Entitles") meeting the criteria for business
responsibility outlined in this letter of understanding; and second, that the
parties' joint definition of "responsible" Outside Commercial Entities be
clarified to include respect for and compliance with the public policies and
other standards enumerated below.

        The parties agree that a joint committee consisting of three members
appointed by the Company and three members appointed by the Union will be
established (the "OCE Committee") within 60 days to review all arrangements (new
or existing) with Outside Commercial Entities which, prior to the establishment
of the OCE Committee, fell within the responsibility of Management. In
conducting their review and approval process, the OCE Committee shall consider
as its decision-making criteria the performance of the Outside Commercial
Entities with respect to the following:

        *       cost, service and competitive bidding;

        *       performance in achieving safe and healthful workplaces and
                compliance with applicable occupational safety and health laws
                and regulations;

        *       adherence to employment and workplace laws and regulations,
                including Title VII of the Civil Rights Act, Executive Orders on
                equal employment opportunity and the Americans with Disabilities
                Act;


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<PAGE>   103



        *       environmental record and performance under applicable
                environmental law and regulation; and

        *       demonstrated commitment to the creation and retention of
                high-skill, high paying jobs in America, particularly in those
                communities in which the Company operates.

        As soon as practicable after the effective date of this Agreement, the
OCE Committee shall adopt a plan for the systematic and regular review of the
Company's relationships with outside commercial entities.

        In the event joint review is unable to produce agreement over a matter
as to which, absent this letter, management has the right to make a unilateral
decision, the management person responsible shall have the right to make a final
decision concerning such matter, and such decision shall not be subject to the
grievance procedure.

        This letter of understanding shall not be construed to affect any rights
and obligations of the parties under the contracting out clause of the Basic
Labor Agreement.

                                        Sincerely yours,

                                        GENEVA STEEL COMPANY



                                        BY: /s/ Carl E. Ramnitz
                                           -------------------------------------
                                           Carl E. Ramnitz
                                           Vice President of Human Resources

ACKNOWLEDGED AND AGREED TO 
this ____ day of ____________, 1998.



UNITED STEELWORKERS OF AMERICA



By: /s/ Dallas Alexander
    ---------------------------------
     Its:____________________________


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<PAGE>   104



                                   APPENDIX Q

            LEAVE OF ABSENCE POLICY FOR INTERNATIONAL UNION EMPLOYEES

                                 March 17, 1998



Mr. Dallas Alexander
United Steelworkers of America
Subdistrict 5
5300 South 360 West, Suite 350
Murray, Utah 84123

Dear Dallas:

        The Subject of Company leaves of absence for employees who leave their
employment with the Company to become employees or elected officials of the
International Union (International Union employees or elected officials shall
not for definition purposes of this policy include any local Union employees or
elected officials) was discussed by the parties during the negotiations.

        1.      As a result of that discussion, the parties have reached the
                following agreement with respect to any person who:

                (a)     First becomes an Officer or Director of the
                        International Union after April 1, 1998 or

                (b)     Becomes an employee of the International Union and whose
                        probationary period expires on or after April 1, 1998.

                (c)     Was an Officer or Director or employee of the
                        International Union prior to April 1, 1998, but was not
                        as of that date accruing service for Company pension
                        purposes (for time spent as an Officer, Director or
                        employee of the International Union) pursuant to a valid
                        agreement providing for such accrual.

        2.      An individual described in paragraph 1 shall be granted a leave
                of absence from the Company concurrent with the period of his
                permanent employment with the International Union.



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<PAGE>   105



Mr. Dallas Alexander
Page 2
March 17, 1998
-----------------------


        3.      Once an individual described in paragraph 1 is made a permanent
                employee of the International Union (by completing his
                probationary period) that person shall, from that point forward
                and while he retains his leave of absence status with the
                Company, not receive any service credit for Company pension
                purposes.

        4.      Such person shall accumulate continuous service for purposes of
                recall to employment and for all other purposes under the Labor
                Agreement, except pensions, provided that he shall not be
                entitled to receive any contractual benefits during the period
                of his leave of absence or receive retiree health care benefits
                from the Company if he is eligible for coverage in the
                International Union health care plan for retirees.

                                        Very truly yours,



                                        Carl E. Ramnitz
                                        Vice President
                                        Human Resources

Confirmed:

/s/ Dallas Alexander
-----------------------------
Dallas Alexander

Date:


------------------------------



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<PAGE>   106


                                   APPENDIX R

                          FAMILY AND MEDICAL LEAVE ACT

The Company and the Union affirm their compliance with and implementation of the
Family and Medical Leave Act of 1993 (FMLA) and further agree to the following
particulars regarding employee eligibility and entitlement.

1.      GENERAL

        A.      The FMLA provides for up to twelve (12) weeks of unpaid leave
                each year for eligible employees to take care of a serious
                health condition of certain family members or of employees
                themselves, and for the birth, adoption or foster placement of a
                child. The law also requires the continuation of certain
                benefits under certain conditions while on leave and includes
                certain notice requirements in order to obtain the leave.

        B.      A copy of the summary of the law and employee rights thereunder
                is available at the Employee Benefits Office and will be issued
                upon request and at the time any FMLA leave is requested. The
                required posting under FMLA will be maintained by the Company.

        C.      FMLA under this Appendix shall be available to any employee who
                has six (6) months or more of continuous service as calculated
                pursuant to the Seniority provisions of the Labor Agreement.

        D.      This Appendix shall become effective on April 1, 1998. Any
                covered employee then on leave of absence which would otherwise
                be covered under the FMLA will be designated on FMLA leave
                beginning April 1, 1998. An employee already on designated FMLA
                leave as of April 1, 1998 will not begin a new 12-week maximum
                leave entitlement, but will be subject to all other terms and
                conditions of this Appendix.

2.      ELIGIBILITY AND ENTITLEMENT

        A.      There shall be no hours worked requirement for the twelve (12)
                months preceding the start of the leave.

        B.      The twelve (12) weeks unpaid leave entitlement under the FMLA
                shall be measured on a rolling twelve (12) month period measured
                backward from the date any FMLA leave is used.


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        C.      A pregnant employee who continues at work until certified as
                totally disabled shall, effective at the conclusion of the
                period of disability, be entitled to a Parental Leave for a
                period of up to twelve (12) weeks.

3.      INTERMITTENT OR REDUCED LEAVE SCHEDULING

        A.      An employee seeking leave in other than continuous weeks must
                certify to Management why such schedule is necessary, and must
                schedule the time off in the manner least disruptive to the
                Plant's operating needs.

        B.      Where leave is sought other than in full day increments, the
                employee may be assigned by Management to any available position
                consistent with the Collective Bargaining Agreement and paid an
                equivalent rate for that position, for the portion of the shift
                actually worked. The employee may not displace anyone who was
                assigned to the employee's normal position for the period of
                absence except at Management's discretion.

        C.      Where leave is sought in increments of less than a full work
                week, if Management, consistent with the Collective Bargaining
                Agreement, is able to accommodate the need for time off by
                adjusting the employee's work schedule (including, but not
                limited to, altering the shift assignment or the scheduled
                workdays), no leave need be provided.

        D.      Where leave is requested in other than continuous weeks and
                where Management considers it desirable to do so in order to
                avoid disruption to the operation, absent mutual agreement
                between the parties the employee may be assigned to an open
                comparable position, without regard to the employee's own
                seniority, for the period of time during which intermittent
                leave may be required. The employee shall be paid an equivalent
                rate for the assigned position.

4.      NOTICE

        A.      In the case of unforeseeable leave sought for care of the
                serious health condition of the employee or a family member, the
                Department Head and Employee Benefits Office shall be notified
                as soon as possible (within forty-eight hours) of learning of
                the need for leave, and the need, expected duration, and
                schedule of the leave explained.

                1.      In the case of such leave, following the initial notice
                        provided above, a written notice shall be provided as
                        soon as possible, but in no event more than fifteen (15)
                        calendar days from the time the need for the leave
                        arises. This notice shall be accompanied by a
                        certification signed by the attending physician or other
                        health care provider and shall include:

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<PAGE>   108



                        (a)     the date on which the condition commenced;

                        (b)     the probable duration of the condition;

                        (c)     appropriate medical information regarding
                                diagnosis, regimen of treatment and need for
                                hospitalization, sufficient to enable the
                                Company to reasonably review the request; and

                        (d)     medical information for employee's serious
                                health condition that he is unable to perform
                                work, or for family member why it is necessary
                                for the employee to provide care to the family
                                member and an estimate of the amount of the
                                employee's time necessary for that care.

                2.      Where the leave is to be taken in other than a single
                        continuous period of time, the notice shall also
                        include:

                        (a)     the date on which the medical treatment is
                                expected to be given;

                        (b)     the duration of such treatment;

                        (c)     the medical necessity for leave to be granted on
                                an intermittent basis; and

                        (d)     the expected duration of the need for an
                                intermittent schedule.

                3.      Certification forms can be obtained from the Employee
                        Benefits Office.

5.      PAY DURING FMLA LEAVE

        A.      Employees seeking FMLA leave under this Appendix may be required
                by management to utilize up to one week of unused paid vacation
                in either single days or a full week.

        B.      An employee may request to utilize additional paid vacation
                during the FMLA leave time. Management reserves the right to
                approve such a request where it involves a change in the
                vacation schedule.

        C.      Except for the substitution of paid vacation and the utilization
                of Sickness and Accident, or Workers' Compensation benefits, all
                time off provided shall be unpaid. Time off without pay granted
                pursuant to the FMLA shall be considered as time not worked
                through choice of the employee and may not be utilized in
                connection with a claim by the employee under any provision of
                this Agreement for any wages, benefit or entitlement,
                eligibility for which is related to hours worked unless the
                employee otherwise meets the eligibility requirements for such
                wage, benefit or entitlement. This exclusion includes, but is
                not limited to, such matters as reporting pay, overtime,
                profit-sharing, PDP, guaranteed hours, holiday pay, or short
                week benefit.


                                       108

<PAGE>   109



6.      TERMINATION OF LEAVE

        A.      The anticipated duration of the leave sought shall be
                established at the time the leave is granted. Upon termination
                of a leave, the employee shall be reinstated to the same or an
                equivalent position as that held at the time the leave
                commenced, consistent with his seniority, unless there was an
                intervening event including but not limited to a reorganization
                or force reduction. In the latter event, the employee shall be
                reinstated to the same position or status which would have been
                held after the intervening event if leave had not been taken.

        B.      An employee who wishes to return from leave prior to the
                scheduled return date must give the Department Head and Employee
                Benefits Office twelve (12) days notice of his desire to return,
                unless the Employee Benefits Office agrees to a shorter period
                in a particular case.

        C.      An employee on FMLA will be eligible for sickness and accident
                benefits in the event of an illness or injury arising during the
                FMLA leave, if all other requirements for S & A eligibility are
                met. At the end of eligibility for S & A benefits, the employee
                may return to FMLA leave status, if eligible, until the date
                FMLA leave was originally scheduled to end. The weeks for which
                S & A benefits are paid will not be counted toward the 12-week
                maximum.

7.      CONTINUOUS SERVICE

        Leave of absence under this program shall not constitute a break in the
        employee's length of continuous service, and the period of such leave
        shall be included in his length of continuous service under the Labor
        and Benefits Agreements.

8.      BENEFIT CONTINUATION

        A.      All employees will continue in benefit coverage during such
                leave, provided the employee is otherwise eligible for such
                coverage under provisions of the FMLA and the employee continues
                making any normally required premium or other payments in a
                manner acceptable to the Company.

        B.      In the event an employee fails to return to work or quits after
                the employee's FMLA leave period has been concluded, the Company
                will waive its right to seek to recover health insurance
                premiums for health insurance coverage provided by the Company
                during such leave, notwithstanding the provision of the FMLA
                which permits recovery of health insurance premiums under
                specified circumstances.



                                       109

<PAGE>   110



9.      GOOD FAITH EFFORTS

        In the event problems develop in implementing this Appendix, whether as
        a result of changes in the law or regulations or otherwise, the parties
        agree to use their best efforts to resolve them in a manner designed to
        assure minimal disruption to the operation, minimize absenteeism, and
        provide an employee the time necessary to meet family and personal
        emergencies and obligations.


                                       110

<PAGE>   111


                                   APPENDIX S

                            EMPLOYMENT SECURITY PLAN

A.      EFFECTIVE DATE

        1.      This Employment Security Plan (ESP) shall become effective for
                eligible employees, as defined in Paragraph C below, the first
                full week following the effective date of this Agreement.

B.      GUARANTEE

        1.      Employees eligible for this ESP may not be laid off during the
                term of this Agreement except as provided below. If a disaster
                occurs, the ESP will be terminated. For the purposes of this
                agreement, disaster is defined as:

                a.      The permanent shutdown of the plant.

                b.      A petition in bankruptcy for reorganization or
                        liquidation is filed, and the Court finds that it is
                        necessary to reject this agreement and issues an order
                        under the bankruptcy laws authorizing such rejection.

                c.      Severe financial difficulties short of bankruptcy
                        filing. Such financial difficulties must represent a
                        clear and present danger to the Company's viability.
                        Disputes concerning this paragraph shall be subject to
                        immediate arbitration pursuant to a special emergency
                        procedure to be agreed upon by the parties, but in no
                        event longer than 30 calendar days from a request by
                        either for arbitration. Termination can occur under this
                        paragraph only by mutual agreement of the parties or
                        upon a finding by the arbitrator that the financial
                        difficulty asserted by the Company does in fact
                        represent a clear and present danger to the Company's
                        continued viability.

        2.      In addition, in the event of a strike, or work stoppage by
                employees covered by the Basic Labor Agreement, the ESP will be
                suspended for the duration of such strike or work stoppage.

        3.      In addition, in the event of a breakdown or outage which is
                expected to last for two (2) weeks or more, the ESP may, by
                mutual agreement, be suspended for affected employees only, for
                the duration of the breakdown or outage.


                                       111

<PAGE>   112



        4.      Should a strike or work stoppage by others, or a natural
                disaster, result in a need to reduce planned work activity, the
                ESP may, by mutual agreement, be suspended until normal
                operations are restored.

        5.      In addition, in the event of a significant decrease in the level
                of plant operations which is expected to last less than six
                months, employees affected by the decrease in the level of plant
                operations and eligible for this ESP pursuant to Paragraph C
                below may, by mutual agreement, be temporarily scheduled on a
                thirty-two (32) hours a week basis. Any implementation issues or
                procedures that arise under this paragraph will be addressed by
                the local plant implementation committee.

        6.      In the case of a permanent shutdown of a department or a
                substantial portion of a department, layoffs will be permitted
                but only in accordance with the following:

                a.      The appropriate local parties shall promptly meet and
                        consider alternatives designed to provide employment to
                        displaced employees, in accordance with agreed-upon
                        procedures. Absent agreement, subsection b. Shall apply.

                b.      Displaced employees in such departments or displaced
                        employees on occupations traditionally, routinely, and
                        regularly dedicated primarily to such departments, and
                        displaced maintenance employees who are displaced from
                        their line of progression as a result of a shutdown of
                        the department or a substantial portion of the
                        department shall be entitled to displace junior
                        employees in accordance with existing seniority rights
                        and labor pool rights. Displaced employees, including
                        those displaced as the result of the exercise of bumping
                        rights referred to in this subparagraph, may be laid off
                        and, if laid off, shall have no entitlement to the
                        protections of this ESP until they are subsequently
                        recalled and become eligible for such protection
                        pursuant to the provisions of this ESP.

                c.      "Substantial portion" of a department shall be
                        determined in a manner consistent with the way that term
                        is generally understood in the basic steel industry.

        7.      The guarantee provided to active eligible employees by this ESP,
                except as provided in paragraph 5, is defined as the opportunity
                to earn forty (40) hours of pay (including hours paid for but
                not worked, work opportunities declined by the employee,
                disciplinary time off, absenteeism, report-off for Union
                business, but excluding overtime pay and premium pay) during any
                payroll week. An eligible employee on approved leave of absence
                or medically laid off during any payroll week shall be
                considered as having been provided employment security during
                that week, it being understood that the pay, if any, that such
                an employee is


                                       112

<PAGE>   113



                entitled to receive while on approved leave of absence or
                medical layoff is that provided by applicable law or the labor
                agreement, not the earning opportunity set forth in the ESP.
                Similarly, employees working agreed-upon non-normal schedules
                (i.e., 12 hour, 10 hour, etc.) will be covered in weeks when
                scheduled fewer than 40 hours but only to the extent of the
                hours they are normally scheduled during such weeks.

C.      ELIGIBILITY

        1.      All employees with at least three years of continuous service
                and who are active as of April 1, 1998, are eligible for the
                protections of this ESP. An active employee who does not have a
                least three years of continuous service as of the effective date
                of this Plan shall be eligible for this ESP upon attaining three
                years of continuous service unless he is on layoff at that time,
                in which case he shall become eligible when he returns to active
                employment. An employee with three years of continuous service
                and who is inactive as of the effective date of this Plan shall
                become eligible for this ESP upon his return to active status.
                Employees who are laid off in accordance with Paragraph B.6.
                involving shutdowns that occur after the effective date of this
                Agreement may become eligible for this ESP only when they return
                to work.

        2.      Any full-time employee hired after the effective date of this
                ESP shall be eligible for this ESP under its provisions upon
                attaining three years of continuous service, unless he is on
                layoff at that time, in which case he shall become eligible when
                he returns to active employment.

        3.      Employees eligible for employment security must continue to
                fully satisfy the terms and conditions of employment.

D.      IMPLEMENTATION

        The local parties will meet for the purpose of reaching agreement on the
        implementation of this ESP, including the placement of employees who
        would have been laid off but for this ESP. Those agreements shall become
        part of this ESP, and may not be changed except as agreed to by the
        local plant implementation committee.

E.      RATE OF PAY

        An employee who would have been laid off but for this ESP and who is
        working in a new job assignment shall receive:

        1.      The established rate of pay, including applicable incentives or
                bonuses, of the job performed, or

                                       113

<PAGE>   114



        2.     In the case of an assignment not falling within the description
               of an established job, the rate of pay determined by the local
               plant implementation committee; however, where the local plant
               implementation committee is unable to reach agreement, the rate
               of pay for such an assignment shall be the standard hourly wage
               rate for Job Class 2.

F.      VOLUNTARY LAYOFF PRACTICES AND AGREEMENTS

        1.     Upon the effective date of this ESP, all existing practices,
               agreements, or working conditions which permit voluntary layoffs
               will be maintained. No employee who elects voluntary layoff shall
               be disqualified from or lose accrual toward long term layoff
               protection benefits if, while he is on such layoff, a triggering
               event under Paragraph B occurs which precludes the employee's
               return to active employment.

G.      EXISTING RIGHTS

        1.     Except as expressly provided in this ESP, nothing in the ESP
               shall interfere with, limit, detract from, or adversely affect in
               any way the rights and obligations of the parties set forth in
               other provisions of the Basic Labor Agreement.

                                       114

<PAGE>   115


                                  April 9, 1998



Mr. Dallas Alexander
United Steelworkers of America
Subdistrict 5
5300 South 360 West, Suite 350
Murray, Utah 84123

        Re:    Productivity

Dear Mr. Alexander:

        The parties recognize that employment security and productivity
improvements are inseparably linked to attaining sustained profitability.
Accordingly, the parties agree to the following in order to maximize the
effective utilization of the work force and equipment and to achieve continuous
improvement through attrition and by implementing new and innovative approaches
to the way work is performed.

        1.      To accomplish gains in productivity and take advantage of
                attrition to the fullest extent possible, the Partnership
                Committee will work vigorously to institute modern work
                practices which can include, but are not limited to,
                self-directed work teams, job restructuring, seniority unit
                restructuring, job assignment changes, operator-assisted
                maintenance, and practice and scheduling changes.

        2.      This process will be managed by the Partnership Committee which
                may call upon Department Level Board Committees to facilitate
                changes agreed to pursuant to this letter to avoid filling or
                backfilling attrition vacancies. The Participation Teams will
                have a duty and responsibility to work in good faith to
                facilitate attrition-based force reductions and to drive
                continuous improvement through the establishment of measurements
                of performances and productivity goals. Goals will be based on a
                continual improvement in the Company's competitive position.

        3.      In November of each year, the Partnership Committee will develop
                a proposed attrition-based force reduction plan and the
                respective measurements of performance for the coming year. The
                pace of work force reductions will be continuously monitored by
                the Partnership Committee. On or about October 1 of each year,
                an assessment will be made of the attrition reductions to date.
                In the event that attrition is occurring at a rate which will
                substantially exceed or fail to reach any goals adopted pursuant
                to this letter, the parties will modify the attrition reduction
                plan for the following year.


                                       115

<PAGE>   116



Mr. Dallas Alexander
April 9, 1998
Page 2
-------------------------

        4.      This agreement shall become a part of the Employment Security
                Plan.

                                        Very truly yours,

                                        GENEVA STEEL COMPANY



                                        By: /s/ Carl E. Ramnitz
                                            ------------------------------------
                                            Carl E. Ramnitz
                                            Vice President
                                            Human Resources

ACKNOWLEDGED AND AGREED TO 
this ____ day of April, 1998.

UNITED STEELWORKERS OF AMERICA



By: /s/ Dallas Alexander
    -----------------------------
        Dallas Alexander



                                      116

<PAGE>   117


                             MEMORANDUM OF AGREEMENT
                            JOB ASSIGNMENTS FROM THE
                            EMPLOYMENT SECURITY POOL

Pursuant to Section D of the Employment Security Plan (the "Plan"), the parties
agree as follows:

1. Any eligible employee who, absent the Plan would have been laid off after
exercising all seniority rights, including applicable seniority pool rights,
shall be placed in the Employment Security Pool.

2. Any employee in the Employment Security Pool may be assigned such duties as
the Company elects, including but not limited to:

        a. Training or retraining.

        b. Any bargaining unit work which would otherwise be contracted out;
provided, however, that such assignment shall be without prejudice to any right
the Company may have to contract out such work and shall be deemed to not
interrupt an otherwise consistent practice under Article I in the Agreement.

        c. Any bargaining unit work which could be performed at regular rates,
rather than at overtime rates.

        d. Any work which otherwise would not be performed; provided, however,
that the Company may discontinue such work at any time.

        e. Any bargaining unit work for which no employee not in the Employment
Security Pool has a permanent right.

        f. Any work normally performed by non-bargaining unit personnel;
provided, however, that such assignment shall be without prejudice to the
Company's right to discontinue the assignment of such work to Bargaining Unit
employees.

3. Any employee assigned to the Pool will not have the right to select an
assignment within the Pool regardless of seniority.

4. Any employee who would otherwise be assigned to the Employment Security Pool
has at the time of such demotion the option of taking a voluntary layoff. If the
voluntary layoff is selected, the employee is required to stay on layoff for
thirty (30) calendar days, unless called back to a job above the Employment
Security Pool. If the employee would like to return to work after thirty (30)
days, and is otherwise entitled to work pursuant to the terms of the Employment
Security Plan, the employee must sign a return to work slip at the Geneva
Employment Office. Such employee will be returned to work the week following
submission of the signed request.

                                       117

<PAGE>   118



        This agreement shall become a part of the Plan.

UNITED STEELWORKERS OF AMERICA              GENEVA STEEL COMPANY

By: /s/ Dallas Alexander                    By: /s/ Carl E. Ramnitz
    --------------------------                  -------------------------
    Dallas Alexander                            Carl E. Ramnitz



                                       118

<PAGE>   119


                                  April 9, 1998

Mr. Dallas Alexander
United Steelworkers of America
Subdistrict 5
5300 South 360 West, Suite 350
Murray, Utah 84123

        Re:    Employment Security Implementation Committee

Dear Mr. Alexander:

        With the adoption of the Employment Security Plan, the parties agree to
the establishment of an implementation committee to address issues that may
arise under the Plan.

        An Implementation Committee shall be established in the plant, and shall
be comprised of at least three members appointed by the Local Union and an equal
number appointed by the Company.

        The Implementation Committee shall meet weekly to resolve, consistent
with the Labor Agreement, any implementation issue that may arise. After the ESP
has been in place, the Committee shall meet as required, or upon the request of
three committee members.

        The costs of meeting, including lost time if necessary, shall be met by
the Company.

                                        Very truly yours,

                                        GENEVA STEEL COMPANY



                                        By: /s/ Carl E. Ramnitz
                                            ------------------------------------
                                            Carl E. Ramnitz
                                            Vice President
                                            Human Resources

ACKNOWLEDGED AND AGREED TO 
this ____ day of April, 1998.

UNITED STEELWORKERS OF AMERICA


By: /s/ Dallas Alexander
    ---------------------------------
        Dallas Alexander



                                       119

<PAGE>   120



                                 April 16, 1998



Mr. Dallas Alexander
United Steelworkers of America
Subdistrict 5
5300 South 360 West, Suite 350
Murray, Utah 84123

Dear Mr. Alexander:

        In connection with our establishment of an Employment Security Plan
("ESP") as a part of the 1998 Labor Agreement, it was agreed that the provisions
of Paragraph B.6. relating to the shutdown of a department or a substantial
portion thereof, should apply to employees displaced as a result of certain
changes in technology.

        For purposes of this letter, changes in technology shall be defined as
installation of (i) additional or new slab heating capacity (e.g., walking beam
furnace), (ii) new technology for ironmaking (e.g., Hismelt, Corex), (iii)
tilting spouts at the blast furnace, or (iv) substantial pipe mill
modernization.

                                        Very truly yours,

                                        GENEVA STEEL COMPANY



                                        By: /s/ Carl E. Ramnitz
                                            ------------------------------------
                                            Carl E. Ramnitz
                                            Vice President
                                            Human Resources

ACKNOWLEDGED AND AGREED TO 
this ____ day of April, 1998.

UNITED STEELWORKERS OF AMERICA



By: /s/ Dallas Alexander
    ---------------------------------
       Dallas Alexander



                                       120

<PAGE>   121



                                 April 16, 1998


Mr. Dallas Alexander
United Steelworkers of America
Subdistrict 5
5300 South 360 West, Suite 350
Murray, Utah 84123

        Re:    Employment Security

Dear Mr. Alexander:

        In recognition of Geneva Steel's size, and geographical location, the
parties have agreed that notwithstanding any other provision of this Employment
Security Plan ("ESP"):

        The ESP shall be suspended on the first day of the first calendar week
        immediately following any week in which the actual or scheduled
        production on the 132" Mill falls below 34,885 tons per week. The
        Company will not sell slabs purposely to erode the work performed by the
        Bargaining Unit through application of the foregoing sentence. The ESP
        shall be similarly suspended, but only with respect to the number of
        employees directly or indirectly affected thereby, in the event that the
        actual turns on the Pipe Mill fall below ten (10) eight (8) hour turns
        per week and/or hot-rolled, flat-plate production on the 132" Mill falls
        below 5,581 tons per week. If actual or scheduled production returns to
        a level above the foregoing levels for a four (4) week period, the ESP
        will be reinstated on the first day of the first calendar week
        immediately following four (4) week period.

                                        Very truly yours,

                                        GENEVA STEEL COMPANY

                                        By: /s/ Carl E. Ramnitz
                                            ------------------------------------
                                            Carl E. Ramnitz
                                            Vice President
                                            Human Resources

ACKNOWLEDGED AND AGREED TO 
this ____ day of April, 1998.

UNITED STEELWORKERS OF AMERICA



By: /s/ Dallas Alexander
    ---------------------------------
        Dallas Alexander



                                       121

<PAGE>   122



                                 April 16, 1998



Mr. Dallas Alexander
United Steelworkers of America
Subdistrict 5
5300 South 360 West, Suite 350
Murray, Utah 84123

        Re:    Employment Security

Dear Mr. Alexander:

        Notwithstanding any other provision of the ESP, the layoff protections
afforded thereunder shall not apply (i) September 1, 1998, or (ii) when the
number of employees permanently separated from employment (quits and
retirements) after the date hereof, in addition to those on layoff, reaches a
total of 200, whichever comes first.

                                        Very truly yours,

                                        GENEVA STEEL COMPANY



                                        By:   /s/ Carl E. Ramnitz
                                           -------------------------------------
                                            Carl E. Ramnitz
                                            Vice President
                                            Human Resources

ACKNOWLEDGED AND AGREED TO 
this ____ day of April, 1998.

UNITED STEELWORKERS OF AMERICA



By:   /s/ Dallas Alexander
   ----------------------------------
        Dallas Alexander



                                       122

<PAGE>   123



                                   APPENDIX T

                     LETTER OF AGREEMENT RE: CONTRACTING OUT



Mr. Dallas Alexander
District 12, Subdistrict 5
United Steelworkers of America
5300 S. 360 W., Suite 350
Murray, Utah 84123

Dear Mr. Alexander:

        This letter will confirm an understanding reached in the 1998
negotiations. In that bargaining, the Union sought clarification of an issue
arising under the contracting out provisions of other steel company basic labor
agreements.

        The Union pointed to a group of arbitration decisions addressing the
question whether the assignment or transfer of bargaining unit work to other
company locations outside the bargaining unit or to other units at the same
location (represented by unions other than the USWA) falls within the provisions
of the contracting out clause. At least one reported case answers in the
affirmative, while other decisions go the other way.

        In our 1998 negotiations, the Union advanced persuasive reasons for why
our contracting out clause, as currently proposed, adopts the approach of the
affirmative decision referred to above. Nonetheless, to clarify the point and
remove any doubt, the Union sought this letter of understanding to express our
mutual agreement on the point.

        Accordingly, the contracting out clause of our agreement shall be
understood to apply to the assignment or transfer of bargaining work to other
company locations outside the bargaining unit.

                                        Sincerely,

                                        GENEVA STEEL COMPANY



                                        By:   /s/ Carl E. Ramnitz
                                            ------------------------------------
                                             Carl E. Ramnitz
                                             Vice President
                                             Human Resources




                                       123

<PAGE>   124


Mr. Dallas Alexander
Subdistrict 5
United Steelworkers of America
5300 South 360 West, Suite 350
Murray, Utah 84123

        Re:    Letter Agreement on Work, i.e., "As Is, Where Is"

Dear Mr. Alexander:

        This will confirm our understanding that an "As Is, Where Is," sale of
assets is a legitimate commercial transaction that is a business decision not
designed to deprive Bargaining Unit employees of work assignments.

        If such sale of assets involves the use of a vendor or contractor to
perform a service (i.e. scrap preparation) and such assets are returned for the
Company's use or sale as part of the transaction, such transaction shall be
considered as contracting out and subject to the provisions of Article 1,
Section 3 of this Agreement. "As Is, Where Is" shall be deemed to include only
assets sold in-place at the Company and shall exclude natural resources.

                                        Sincerely,

                                        GENEVA STEEL COMPANY


                                        By: /s/ Carl E. Ramnitz
                                           ---------------------------------
                                           Carl E. Ramnitz
                                           Vice President
                                           Human Resources

ACKNOWLEDGED AND AGREED TO 
this ____ day of ___________, 1998.


UNITED STEELWORKERS OF AMERICA

By: /s/ Dallas Alexander
    --------------------------------
        Dallas Alexander



                                       124