Document:

exv10w5

 

Exhibit 10.5

ARTICLES OF AGREEMENT

BETWEEN

STERLING CHEMICALS, INC.

ITS SUCCESSORS AND ASSIGNS

AND

TEXAS CITY, TEXAS

METAL TRADES COUNCIL, AFL-CIO

TEXAS CITY, TEXAS

May 27, 2004

to

May 1, 2007

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	 	 	Page
	 	 	 	 	No.
	ARTICLE 1
	 	MANAGEMENT RIGHTS	 	2
	ARTICLE 2
	 	UNION SECURITY	 	2
	ARTICLE 3
	 	HOURS OF WORK	 	3
	ARTICLE 4
	 	OVERTIME AND PREMIUM TIME REGULATIONS	 	5
	ARTICLE 5
	 	VACATION	 	8
	ARTICLE 6
	 	SENIORITY	 	10
	ARTICLE 7
	 	SUPERVISORS DOING HOURLY WORK	 	15
	ARTICLE 8
	 	WORK CLASSIFICATIONS	 	15
	ARTICLE 9
	 	STAFFING OF NEW UNITS	 	15
	ARTICLE 10
	 	STEWARDS	 	15
	ARTICLE 11
	 	CONTRACT WORK	 	16
	ARTICLE 12
	 	PAY DAY	 	16
	ARTICLE 13
	 	PHYSICAL EXAMINATIONS	 	17
	ARTICLE 14
	 	DISCRIMINATION	 	17
	ARTICLE 15
	 	UNION REPRESENTATIVES	 	17
	ARTICLE 16
	 	JURY SERVICE	 	17
	ARTICLE 17
	 	ELECTION DAY REGULATIONS	 	18
	ARTICLE 18
	 	REPLACEMENT OF CLOTHING	 	19
	ARTICLE 19
	 	LAYOFF NOTICE - SEPARATION ALLOWANCE	 	19
	ARTICLE 20
	 	LEAVE OF ABSENCE	 	20
	ARTICLE 21
	 	SANITATION AND SAFETY	 	21
	ARTICLE 22
	 	BULLETIN BOARDS	 	22
	ARTICLE 23
	 	COMPANY RULES	 	22
	ARTICLE 24
	 	PRODUCTIVITY STATEMENT	 	22
	ARTICLE 25
	 	FUNERAL LEAVE	 	23
	ARTICLE 26
	 	STRIKES AND LOCKOUTS	 	24
	ARTICLE 27
	 	GRIEVANCE PROCEDURE AND DISCIPLINE RECORDS	 	24
	ARTICLE 28
	 	ARBITRATION PROCEDURE	 	26
	ARTICLE 29
	 	ABROGATION OF CONTRACT ARTICLES	 	26
	ARTICLE 30
	 	OCCUPATIONAL &
NON-OCCUPATIONAL ACCIDENT AND SICKNESS PLAN	 	27
	ARTICLE 31
	 	WORK ASSIGNMENTS	 	29
	ARTICLE 32
	 	CONTRACT PERIOD	 	29
	EXHIBIT A
	 	12 HOUR SHIFT AGREEMENT	 	A-I
	EXHIBIT B
	 	WAGE RATES	 	B-I
	EXHIBIT C
	 	EMPLOYEE BENEFITS	 	C-I
	NO JURISDICTION SUPPORTING INFORMATION	 	 

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INDEX

	 	 	 	 	 
	 	 	 	 	PARAGRAPH
	 	 	Signatory Unions
	 	1
	 	 	Basic Principles
	 	2
	 	 	Union Recognition
	 	3
	 	 	Bargaining Union Defined
	 	3
	ARTICLE 29	 	ABROGATION OF CONTRACT ARTICLES
	 	69
	ARTICLE 28	 	ARBITRATION PROCEDURE
	 	 
	 	 	Appealed Grievance Time Length
	 	68 b)
	 	 	Arbitration Expenses
	 	68 c)
	 	 	Arbitrator Authority
	 	68 d)
	 	 	Length of Time to Arbitrate
	 	68 a)
	 	 	Time Limit Failure
	 	68 e)
	ARTICLE 22	 	BULLETIN BOARDS
	 	62 a)
	ARTICLE 23	 	COMPANY RULES
	 	63 a)
	ARTICLE 32	 	CONTRACT PERIOD
	 	80 a) thru d)
	ARTICLE 11	 	CONTRACT WORK
	 	 
	 	 	Utilizing Independent Contractors
	 	42 a)
	ARTICLE 14	 	DISCRIMINATION
	 	 
	 	 	Charges of Discrimination
	 	45 b)
	ARTICLE 17	 	ELECTION DAY REGULATIONS
	 	 
	 	 	Election Judge
	 	52 b)
	 	 	Employees Time off to Vote
	 	52 a)
	ARTICLE 25	 	FUNERAL LEAVE
	 	 
	 	 	Funeral Leave
	 	65 a) & b)
	 	 	Funeral Leave while on Vacation
	 	65 c)
	 	 	Pallbearer
	 	65 g)
	 	 	Proof of Relationship
	 	65 f)
	ARTICLE 27	 	GRIEVANCE PROCEDURE AND DISCIPLINE RECORDS
	 	 
	 	 	Discharge Grievance Process
	 	67 c) thru e)
	 	 	Grievance Lapse Time
	 	67 a) 1)
	 	 	Grievance Time Limit Exceptions
	 	67 f)
	 	 	Length of Time to Answer Grievance
	 	67 a) 6)
	 	 	Letters of Reprimand
	 	67 g) & h)
	 	 	PUC Meeting Membership
	 	67 b)
	 	 	Sick Pay Benefit Grievance
	 	67 a) 5)
	 	 	Step 1 - Grievance Procedure
	 	67 a) 2)
	 	 	Step 2 - Grievance Procedure
	 	67 a) 3)
	 	 	Step 3 - Grievance Procedure
	 	67 a) 4)
	ARTICLE 3	 	HOURS OF WORK
	 	 
	 	 	Changes to Materials Handling Schedule
	 	13 h)
	 	 	Dentist/Doctor Appt. 3 Hrs Unpaid
	 	13 f)
	 	 	Hours of Work — Maintenance
	 	12 a) thru c)
	 	 	Hours of Work — Groups 1, 2, & 4
	 	11 a) thru b)
	 	 	Normal Workweek
	 	13 d)
	 	 	Schedule Less than 40 Hours Inadvertently
	 	13 e)
	 	 	Shift Work Scheduling (when deemed necessary)
	 	13 a) & d)

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	 	 	 	 	PARAGRAPH
	 	 	“Shift Work” – Definition of
	 	13 g)
	ARTICLE 16	 	JURY SERVICE
	 	 
	 	 	Afternoon Court Appearance
	 	49 a) & 51 a)
	 	 	Morning Court Appearance
	 	48 a)
	 	 	Proof of Service
	 	50 a)
	ARTICLE 19	 	LAYOFF NOTICE — SEPARATION ALLOWANCE
	 	 
	 	 	Eligibility for Separation Allowance
	 	57 a) & b)
	 	 	Labor Dispute Lay Off
	 	54 c)
	 	 	Lay Off Notice
	 	54 a) thru b)
	 	 	Lay Off Separation Allowance
	 	55 a)
	 	 	Method of Payment of Separation Allowance
	 	56 a) thru d)
	ARTICLE 20	 	LEAVE OF ABSENCE
	 	 
	 	 	Leave of Absence for Personal Reasons
	 	58 a)
	 	 	Leave of Absence for Union Conventions
	 	58 b)
	 	 	Leave of Absence to Accept Employment with
the Union
	 	58 c)
	 	 	Leave of Absence For Newborn Child
	 	58 d)
	 	 	Public Office Appointment
	 	58 e)
	ARTICLE 1	 	MANAGEMENT RIGHTS
	 	5
	ARTICLE 30	 	OCCUPATIONAL & NON-OCCUPATIONAL ACCIDENT AND SICKNESS PLAN
	 	 
	 	 	Benefit Amount
	 	73 b)
	 	 	Benefit Payment
	 	73 a)
	 	 	Benefits Based on Normal Workweek
	 	72 a)
	 	 	Benefits during Vacation
	 	78 a) & b)
	 	 	Benefits during Work Stoppage
	 	77 a)
	 	 	Benefits while on Probation
	 	73 c)
	 	 	Duration of Benefits
	 	71 a) thru c)
	 	 	Exclusion from Benefit
	 	73 a) thru b)
	 	 	Late Report of Occupational Disability
	 	74 c)
	 	 	Plant Service Credit
	 	70 b)
	 	 	Proof of Disability
	 	74 a)
	 	 	Reporting Absences
	 	74 b)
	 	 	Sick Pay
	 	70 a)
	 	 	Withholding Benefit Payment
	 	76 a)
	ARTICLE 4	 	OVERTIME AND PREMIUM TIME REGULATIONS
	 	 
	 	 	Bypassing (Scheduling Overtime)
	 	22 a) thru c)
	 	 	Call-outs
	 	15 a)
	 	 	Holiday — (No Work No Pay)
	 	16 d) 4)
	 	 	Holiday Pay
	 	16 a) thru d)
	 	 	Holidays
	 	16 a)
	 	 	Maintenance Overtime
	 	23 a) thru f)
	 	 	Overtime Equalization
	 	18 a)
	 	 	Overtime Meals
	 	19 a) thru c)
	 	 	Overtime Premium
	 	14 a) thru d)
	 	 	Shift Differential
	 	20 a)
	 	 	Transportation Due To Overtime
	 	21 a)

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	 	 	 	 	PARAGRAPH
	ARTICLE 12	 	PAY DAY
	 	 
	 	 	Pay Day
	 	43 a)
	 	 	Pay Errors Less or More than 8 Hours
	 	43 d)
	 	 	Paychecks Direct Deposit
	 	43 b)
	ARTICLE 13	 	PHYSICAL EXAMINATIONS
	 	 
	 	 	Employees Physically Unfit to Perform in Assigned Classification
	 	44 c)
	 	 	New Hire Physicals
	 	44 a)
	 	 	Periodic Examinations of Employees
	 	44 b)
	 	 	X-rays
	 	44 e)
	ARTICLE 24	 	PRODUCTIVITY STATEMENT
	 	64 a) thru d)
	ARTICLE 18	 	REPLACEMENT OF CLOTHING
	 	 
	 	 	Clothes Damaged
	 	53 a)
	ARTICLE 21	 	SANITATION AND SAFETY
	 	 
	 	 	Clip-On Glasses
	 	60 g)
	 	 	Colored Safety Glasses — Operating Engineers
	 	60 b)
	 	 	Commercial or Chauffeur’s License — Operating Engineers
	 	59 a)
	 	 	Eye Exam Payment
	 	60 c)
	 	 	Non-Prescription Safety Sunglasses
	 	60 d)
	 	 	Postponing Job for Safety Reasons
	 	59 b)
	 	 	Prescription Glasses for Welders
	 	60 f)
	 	 	Prescription Safety Glasses
	 	60 a)
	 	 	Safety Shoes
	 	61 a)
	ARTICLE 6	 	SENIORITY
	 	 
	 	 	Bidding — Bidding Rules
	 	33 c)
	 	 	Bidding- No Qualified Bidders
	 	33 f)
	 	 	Bidding- Selection of Job Posting Bidders
	 	33 b)
	 	 	Grievances — Seniority
	 	37 a)
	 	 	Job Bidding
	 	33 a)
	 	 	Job Posting
	 	33 a) 1)
	 	 	Layoffs
	 	35 a) thru e)
	 	 	Rehiring
	 	36 a) thru b)
	 	 	Seniority — Four Types
	 	25 b)
	 	 	Seniority — Promotions
	 	32 a) & b)
	 	 	Seniority (Military Service)
	 	28 d)
	 	 	Seniority (Probationary Period)
	 	26 a) & 28 a)
	 	 	Seniority (Promoted to Supervision —Permanent or Temporary)
	 	28 b) & c)
	 	 	Seniority Consolidation of Departments
	 	31 a)
	 	 	Seniority Definition of Group. Dept., & Maintenance
	 	25 c)
	 	 	Seniority Draw
	 	26 c)
	 	 	Seniority for Straight Day Employment
	 	26 b)
	 	 	Seniority is Equal
	 	26 d)
	 	 	Seniority List
	 	27 a)
	 	 	Seniority Lost
	 	29 a)
	 	 	Seniority Unbroken
	 	30 a)
	 	 	Transfers — General Mechanic
	 	34 c)
	 	 	Transfers — Operating Unit Reduced Operation or Shut Down
	 	34 b)

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	 	 	 	 	PARAGRAPH
	 	 	Transfers of Surplus Group 1 employees
	 	34 a)
	ARTICLE 9	 	STAFFING OF NEW UNITS
	 	40
	ARTICLE 10	 	STEWARDS
	 	 
	 	 	Department Designation
	 	41 a)
	 	 	Steward (Benefits)
	 	41 e)
	 	 	Steward (Disciplinary Action)
	 	41 d)
	ARTICLE 26	 	STRIKES AND LOCKOUTS
	 	66 a) thru e)
	ARTICLE 7	 	SUPERVISORS DOING HOURLY WORK
	 	38 a) & b)
	ARTICLE 15	 	UNION REPRESENTATIVES
	 	46 a)
	ARTICLE 2	 	UNION SECURITY
	 	 
	 	 	Dues Check Off
	 	6 a)
	 	 	Dues Check Off Cancellation
	 	7 a)  & 8 a) thru c)
	 	 	Dues Payment to Signatory Unions
	 	9 a) & b)
	ARTICLE 5	 	VACATION
	 	 
	 	 	Bank Days — Vacation
	 	24 k)
	 	 	Choice Designation — Vacation
	 	24 j)
	 	 	Credit Accumulation
	 	24 b)
	 	 	Hold Over — Vacation
	 	24 o) thru q)
	 	 	Military Service — Vacation
	 	24 r)
	 	 	Seniority/Preference — Vacation
	 	24 i)
	 	 	Sick Leave — Vacation
	 	24 s)
	 	 	Vacation (Dismissal or Voluntary Separation)
	 	24 t)
	 	 	Vacation (Resigns Without Notice Or Discharged for Cause)
	 	24 u)
	 	 	Vacation Accrual Year Cutoff
	 	24 z)
	 	 	Vacation Back-to-Back
	 	24 y)
	 	 	Vacation Falls on Holiday
	 	24 v) thur w)
	 	 	Vacation Pay — Computed
	 	24 g)
	 	 	Vacation Period
	 	24 h)
	 	 	Vacation Splits
	 	24 l)
	 	 	Vacation Transfers Between Groups or Crafts
	 	24 x)
	 	 	Vacations 5, 10, 20 & 30
	 	24 c) thru f)
	 	 	Vacations less than 5 years & probationary period)
	 	24 a)
	ARTICLE 31	 	WORK ASSIGNMENTS
	 	79 a) thru c)
	ARTICLE 8	 	WORK CLASSIFICATIONS
	 	39 a)

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	 	 	 	 	PAGE NO.
	EXHIBIT A	 	12 HOUR SHIFT AGREEMENT
	 	A-i thru Axiii
	 	 	Day Jobs
	 	A-ii
	 	 	Extra Operators
	 	A-ii
	 	 	Wages
	 	A-ii
	 	 	Employee
Benefit Plans, SIP, Pension, Life Insurance and Disability
	 	A-ii
	 	 	Overtime
	 	A-ii thru A-iii
	 	 	Mandatory Overtime Procedure
	 	A-iv
	 	 	Charging of Overtime
	 	A-iv
	 	 	Hours of Work
	 	A-iv
	 	 	Overtime and Holidays
	 	A-v thru A-vi
	 	 	Holiday and Holiday Pay
	 	A-v
	 	 	Shift Differential
	 	A-v thru A-vi
	 	 	Vacation
	 	A-vi
	 	 	Seniority
	 	A-vii
	 	 	Jury Service
	 	A-vii
	 	 	Funeral Leave
	 	A-vii
	 	 	Occupational
& Non-Occupational Accident and Sickness Plan
	 	A-vii
	 	 	Wage Adjustment
	 	A-vii thru A-xi
	 	 	Interpretation of Attachment E
	 	A-xii
	EXHIBIT B	 	WAGE RATES
	 	B-i thru B-ii
	EXHIBIT C	 	EMPLOYEE BENEFITS
	 	C-i thru C-iii
	 	 	NO JURISDICTION SUPPORTING INFORMATION
	 	 

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ARTICLES OF AGREEMENT

between

STERLING CHEMICALS, INC.

ITS SUCCESSORS AND ASSIGNS

and

THE TEXAS CITY, TEXAS METAL

TRADES COUNCIL, AFL-CIO

of TEXAS CITY, TEXAS

	1	 	This agreement is made between Sterling Chemicals, Inc., its successors and assigns, authorized to do
business in Texas, hereinafter referred to as the COMPANY, and the Texas City, Texas Metal Trades
Council, AFL-CIO, of Galveston County, Texas, hereinafter referred to as the UNION. It is agreed by
the following unions signatory to this Agreement that said Council is their authorized representative
for the purpose of negotiating and administering this Agreement and for the purpose of modifying,
amending, or waiving any of the provisions of this Agreement:

	 	 	 	Electrical Workers Local No. 527

Operating Engineers No. 347

Painters and Paperhangers No. 1008

International Association of Machinists No. 6

Teamsters Local No. 968

Carpenters Local No. 973

International Brotherhood of Boilermakers, Iron Ship Builders,
Blacksmiths, Forgers and Helpers No. 132

Heat & Frost Insulators and Asbestos Workers No. 22

Pipefitters Local No. 211

Operating Engineers No. 450

BASIC PRINCIPLES

	2	 	The COMPANY and the UNION have a common and sympathetic interest in the progress of industry.
Therefore, a working system and harmonious relations are necessary to improve the relationship
between the COMPANY and the UNION, and the Public. Progress in industry demands a mutuality of
confidence between the COMPANY and the UNION. All will benefit by a continuous peace and by
adjusting any differences by rational, common sense methods. The purpose of this Agreement is to
establish harmonious relations for the advancement of the mutual interest of the parties in
continuing and improving the manufacture and production of products at said Texas City plant. The
COMPANY and UNION agree that they will not discriminate in any manner against any employee because of
race, color, religion, age, sex, national origin, disability or veteran status. It is the
understanding of the parties to this agreement that any reference in said agreement to the masculine
gender is understood to also include those employees of the feminine gender. Now, therefore, in
consideration of the mutual promises and agreements herein contained, the parties hereto agree as
follows:

RECOGNITION

	3	 	The COMPANY hereby recognizes the Texas City, Texas Metal Trades Council as the exclusive bargaining
agency for all production and maintenance employees, but excluding supervisory, technical, clerical,
plant protection employees with respect to rates of pay, wages, hours of work, and other conditions
of employment. Supervisory employees, in the Production and Maintenance Departments, are those who
are above the classification listed in Exhibit B, a part of this contract.

SCOPE OF AGREEMENT

	4	 	This Agreement constitutes the sole and entire Agreement between the parties. It supersedes all
prior Agreements, oral or written, and expresses all obligations of or restrictions imposed on the
respective parties during its term. The waiver of any breach, term, or condition herein by Sterling
shall not constitute a precedent for future waiver of any breach, term, or condition.

 

 

ARTICLE 1

MANAGEMENT RIGHTS

	 	 	 	 	 
	5

	 	a)
	 	Except as expressly modified by a specific provision of this Agreement, all the authority, rights,
and powers which the COMPANY had prior to the signing of this Agreement are retained by the COMPANY
and remain exclusively and without limitation the rights of management. Only express modifications
contained in specific provisions of this Agreement constitute limitations upon such authority,
rights, and powers.
	 
	 	 	 	 
	

	 	b)
	 	The Union recognizes that the Employer has the right, on its own initiative, to perform any
function of management at any time, so long as it does not violate any express provision of this
Agreement.
	 
	 	 	 	 
	

	 	c)
	 	The following acts are functions of management:

	 	1)	 	Those acts which are not within the area of collective bargaining as required by the National
Labor Relations Act;
	 
	 	2)	 	Those acts which are usually exercised by other employers; and
	 
	 	3)	 	Those acts which management should exercise in order to properly manage the business.

ARTICLE 2

UNION SECURITY

	 	 	 	 	 	 	 
	6	 	Section 1
	 
	 	 	 	 	 	 
	

	 	a)
	 	The COMPANY agrees to honor check-off cards signed by individual employees, on forms agreed to by
the COMPANY and the UNION, which authorize the COMPANY to deduct from the employee’s first paycheck
each month the regular monthly UNION dues of the employee, or initiation fees as may be authorized by
the employee.	 	 
	 
	 	 	 	 	 	 
	

	 	b)
	 	The COMPANY agrees to notify the UNION of all newly employed personnel covered by this Agreement.
Such notice shall be in writing and shall state the name of the employee, their classification, their
date of hire, their address and telephone number.	 	 
	 	 	 
	7	 	Section 2
	 
	 	 	 	 	 	 
	

	 	a)
	 	Check-off authorizations now in effect shall become irrevocable in accordance with the terms of
Section 3 of this article unless written notice of revocation from the employee is received by the
COMPANY within the fifteen (15) day period prior to the expiration date of this Agreement. A notice
of this provision will be posted by the COMPANY and the UNION.	 	 
	8	 	Section 3
	 
	 	 	 	 	 	 
	

	 	a)
	 	Check-off authorizations shall be irrevocable for the period of one (1) year, or until the
termination of the Agreement, whichever occurs sooner. It is further agreed that this authorization
shall be automatically renewed, and shall be irrevocable for successive periods of one (1) year each
unless written notice by registered mail of revocation from the employee is received by the COMPANY
not more than twenty (20) days nor less than ten (10) days prior to the expiration of each period of
one (1) year.	 	 
	 
	 	 	 	 	 	 
	

	 	b)
	 	Employees withdrawing from a signatory union may cancel their dues deduction authorization at any
time by serving notice by letter to the COMPANY canceling such authorization along with letters of
approval from the UNION and the signatory union to which the dues and initiation fees were to be
forwarded.	 	 
	 
	 	 	 	 	 	 
	

	 	c)
	 	Employees who, as a result of a change in job assignment, transfer from one signatory union to
another signatory union, may cancel any prior dues deduction authorization by submitting to the
COMPANY a	 	 

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	 	 	 	new dues deduction authorization. Such new authorization must be transmitted through the
signatory union or its designated representative.	 	 
	 	 	 
	9	 	Section 4
	 
	 	 	 	 	 	 
	

	 	a)
	 	Money deducted from paychecks as authorized herein for employees bargained for by the UNION will
be forwarded to each individual union signatory to the Agreement. The UNION will furnish the COMPANY
a list of signatory unions showing the address and the individual to whom the check should be
forwarded and the regular monthly union dues of each Union. This check will be forwarded not later
than the 20th of the month in which the money is deducted, along with a summary sheet in duplicate
showing the name of each employee from whose paycheck dues and initiation fees were deducted and the
amount deducted.	 	 
	 
	 	 	 	 	 	 
	

	 	b)
	 	In the event a signatory union ceases to be affiliated with UNION for any reason, and UNION
officially notifies COMPANY of same, the authorization of employees for deductions of dues and
initiation fees for such Union whose affiliation with UNION has ceased, shall be immediately and
automatically revoked and any monies deducted from checks of said employees and held by the COMPANY
will be refunded to the employee from whose check the deduction was made.	 	 
	 
	 	 	 	 	 	 
	10	 	Section 5
	 
	 	 	 	 	 	 
	

	 	a)
	 	In the event applicable laws governing union security are liberalized to the extent that they
allow a Maintenance of Membership clause, the COMPANY agrees to meet with the UNION at that time and
agree on the terms of a Maintenance of Membership clause.	 	 

ARTICLE 3

HOURS OF WORK

	 	 	 	 	 	 	 
	11	 	Section 1 - All Employees in Seniority Groups 1, 2 and 4
	 
	 	 	 	 	 	 
	

	 	a)
	 	The period of time from 6:30 a.m. to 6:30 a.m. the following day shall constitute a payroll day
for all employees in the seniority groups above. The period of time composed of seven (7)
consecutive payroll days, extending from 6:30 a.m. Monday to 6:30 a.m. the following Monday, shall
constitute a regular work week at this plant for all employees in the seniority groups above.	 	 
	 
	 	 	 	 	 	 
	

	 	b)
	 	The hours of work shall be as follows:	 	 

	1)	 	Day Workers — Eight (8) consecutive hours of work per day, exclusive of a thirty (30) minute lunch
period, shall constitute a day’s work. Hours of work shall be from 6:30 a.m. to 3:00 p.m. Employees
will begin their unpaid thirty (30) minute lunch period during a one and a half (1.5) hour window
beginning four (4) hours after the start of the shift. If the lunch break starts after the window
for work related reasons, the employee will be paid the appropriate overtime rate for the lunch
period.
	 
	2)	 	Eight Hour Shift Workers — Eight (8) consecutive hours of work per day shall constitute a day’s
work. Five (5) eight (8) hour shifts in any one workweek shall constitute a week’s work. Shifts
shall normally be from 6:30 a.m. to 2:30 p.m., 2:30 p.m. to 10:30 p.m., and 10:30 p.m. to 6:30 a.m.
Shift workers will be permitted sufficient time to eat during their shift without loss of pay for
such period.
	 
	3)	 	12-Hour Shift Workers - Terms of the 12-Hour Shift Agreement are included in Exhibit A of this
Agreement.

	 	 	 	 	 	 	 
	12	 	Section 2 - All Employees in the Maintenance Crafts Seniority
	 
	 	 	 	 	 	 
	

	 	a)
	 	The period of time from 7:30 a.m. to 7:30 a.m. the following day shall constitute a payroll day
for all employees in the seniority groups above.	 	 

-3-

 

	 	 	 	 	 	 	 
	

	 	b)
	 	The period of time composed of seven (7) consecutive payroll days, extending from 7:30 a.m. Monday
to 7:30 a.m. the following Monday, shall constitute a regular work week at this plant for all
employees in the seniority groups above.	 	 
	 
	 	 	 	 	 	 
	

	 	c)
	 	The hours of work shall be as follows:	 	 

	1)	 	Day Workers — All Employees in the Maintenance Crafts Seniority — Eight (8) consecutive hours of
work per day, exclusive of a thirty (30) minute lunch period, shall constitute a day’s work. Hours
of work shall be from 7:30 a.m. to 4:00 p.m. Employees will begin their unpaid thirty (30) minute
lunch period during a one and a half (1.5) hour window beginning four (4) hours after the start of
the shift. If the lunch break starts after the window for work related reasons, the employee will be
paid the appropriate overtime rate for the lunch period.
	 
	2)	 	Shift Workers — Maintenance employees assigned to shifts will be permitted sufficient time to eat
during their shift work without loss of pay for such period.

	 	 	 	 	 	 	 
	13	 	Section 3
	 
	 	 	 	 	 	 
	

	 	a)
	 	Employees may be scheduled as shift workers if and when required in the operation of the plant,
and when so working, shall be governed by the above conditions relating to a shift worker.	 	 
	 
	 	 	 	 	 	 
	

	 	b)
	 	Straight day Maintenance employees temporarily assigned to shift work, when being reassigned to
straight days, will normally be reassigned at the beginning of the work week.	 	 
	 
	 	 	 	 	 	 
	

	 	c)
	 	Special shift schedules and start/stop times to support non-routine operations, shutdowns,
turnarounds and emergency situations will be determined by management after consultation with the
UNION. Also after consultation with the UNION, Management may implement modified overtime
regulations for such special schedules to allow for greater than 8 hours of straight time per day not
subject to the OT provisions of Article 4, Section 1.) a). Under such special schedules, employees
will be paid the applicable overtime rate for all hours worked after 40 straight time hours in a
week, as well as all eligible hours worked in a week outside of the pre-determined special schedule,
in accordance with other contractual overtime provisions. For example: Employees put on a special
schedule of 4-10’s, Monday through Thursday, could receive overtime rates only outside of the four
pre-scheduled 10-hour blocks.	 	 
	 
	 	 	 	 	 	 
	

	 	d)
	 	The normal workweek shall consist of forty (40) hours of work and the normal workday of eight (8)
hours of work providing work is available.	 	 
	 
	 	 	 	 	 	 
	

	 	e)
	 	In the event an employee is inadvertently scheduled for less than the normal workweek, the
employee will be allowed to make up the difference after reporting the discrepancy to supervision.
The employee will be allowed to make up such difference only to the point where their earnings equal
the straight time earnings for a normal workweek.	 	 
	 
	 	 	 	 	 	 
	

	 	f)
	 	An employee may be excused without pay for a period up to three (3) hours at the beginning or end
of the day shift, Monday through Friday (except holidays falling Monday through Friday) for the
purpose of a doctor or dentist appointment. Such excuse will be granted if it is scheduled with
enough advance notice so that proper relief can be scheduled and the absence does not impair plant
operations.	 	 
	 
	 	 	 	 	 	 
	

	 	g.)
	 	The term “shift work” shall mean any schedule that has built into it a regular, repeating pattern
of variance in the scheduled days of rest, the core hours of work, or both.	 	 
	 
	 	 	 	 	 	 
	

	 	h.)
	 	Hours and days of work for Materials Handling (Group 4) may be modified at Management’s
discretion based on business needs after consultation with the UNION. This may include changes to
the days worked in a week and/or the number of hours scheduled per day/shift, however, no employee
will be scheduled for fewer than an average of 40 hours per week. Management will attempt to
minimize disruptions to employees’ lives due to such warranted changes in start and stop times.	 	 

-4-

 

ARTICLE 4

OVERTIME AND PREMIUM TIME REGULATIONS

	 	 	 	 	 	 	 
	14	 	Section 1
	 
	 	 	 	 	 	 
	

	 	a)
	 	Except as modified by Article 3, section 3, c), an employee shall be paid at the rate of one and
one-half (1-1/2) times his regular rate for all hours worked by him in excess of eight (8) in any one
(1) day consisting of the twenty-four (24) hour period beginning when an employee begins to work or
report for work in accordance with instructions, which ever is earlier.	 	 
	 
	 	 	 	 	 	 
	

	 	b)
	 	An employee shall be paid at the rate of one and one-half (1-1/2) times his regular rate for all
hours worked by him in excess of forty (40) in any workweek.	 	 
	 
	 	 	 	 	 	 
	

	 	c)
	 	Time and one-half (1-1/2) shall be paid for the first 8-hour period worked following a change of
schedule unless the employee is given at least thirty-six (36) hours notice in advance of the
beginning of his newly assigned hours. For the purpose of computing weekly overtime, hours for which
premium pay is payable under the provisions of this paragraph will not be counted in the total hours
worked by an employee in a given workweek.	 	 
	 
	 	 	 	 	 	 
	

	 	d)
	 	When an employee works a minimum of 8 hours on all their scheduled days of rest within a payroll
week, they will be paid for all hours worked on the last day of rest at the rate of two (2) times
their base rate of pay.	 	 
	 
	 	 	 	 	 	 
	15	 	Section 2 - Call-outs
	 
	 	 	 	 	 	 
	

	 	a)
	 	An employee called-out for work with less than 4 hours notice outside his regular schedule shall
be paid for the actual time worked at not less than one and one half (1-1/2) times his straight time
rate if the length of the assignment is 2.5 hours or greater. If the assignment is less than 2.5
hours in duration and the call-out work does not immediately precede or immediately follow his
regularly scheduled work period, he shall receive the equivalent of four hours times his straight
time rate.	 	 
	 
	 	 	 	 	 	 
	

	 	b)
	 	The COMPANY shall have the right to institute an on-call system for calling out and contacting
employees.	 	 
	 
	 	 	 	 	 	 
	16	 	Section 3 - Holidays
	 
	 	 	 	 	 	 
	

	 	a)
	 	Two and one-half times will be paid for work performed on the following holidays: New Year’s Day,
President’s Birthday, Good Friday, Easter Sunday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, Friday after Thanksgiving Day, Christmas Eve and Christmas Day.	 	 
	 
	 	 	 	 	 	 
	

	 	b)
	 	For day workers: If any of these holidays fall on a Sunday, the Monday immediately following shall
be recognized as the holiday. If holidays fall on Saturday, they will be observed on the preceding
Friday. The exception shall be Christmas Eve, which shall be observed on the last working day before
Christmas.	 	 
	 
	 	 	 	 	 	 
	

	 	c)
	 	For shift workers: All holidays listed above will be recognized on the calendar day on which it
falls. For the purpose of determining pay for an employee who works on a day observed as a holiday
which falls on one of the employee’s scheduled days of rest, “regular scheduled hours of work” for
that day shall mean the same hours the employee was assigned to work on the last regularly scheduled
day of work immediately prior to the holiday. Payment will be made according to (d) 1 below.	 	 
	 
	 	 	 	 	 	 
	

	 	d)
	 	Employees will be paid for the holidays listed above not worked an amount equivalent to eight (8)
times the employee’s straight-time hourly rate, subject to the following conditions:	 	 

	1)	 	Such pay shall be computed on the basis of payroll day and not calendar day.
	 
	2)	 	To be eligible for such pay, an employee must report for work on their last regular scheduled
working day immediately preceding the holiday and their first regular scheduled working day
immediately following this holiday.

-5-

 

	3)	 	For purposes of determining eligibility for holiday pay only under this section, employees absent
either the day before, the day after, or both days, because of vacation, death in the immediate
family, occupational injury or illness while under a doctor’s care, jury duty or excused absence will
be considered as having worked on such day or days and will be entitled to holiday pay provided they
have complied with the other requirements of Article 4, Section 3. Immediate family will be
interpreted to mean those members of the family covered under Article 25 — Funeral Leave.
	 
	4)	 	An employee who is instructed to work on a holiday but fails to report will receive no pay for the
holiday.
	 
	5)	 	Payment for holidays not worked shall not apply to employees on approved leave of absence, off
because of sickness or occupational injury (unless under a doctor’s care), or layoff.

	 	 	 	 	 	 	 
	17	 	Section 4
	 
	 	 	 	 	 	 
	

	 	a)
	 	In the event any hours worked fall within two or more classifications listed above, only one
application can be made.	 	 
	 
	 	 	 	 	 	 
	18	 	Section 5
	 
	 	 	 	 	 	 
	

	 	a)
	 	Employees shall not be laid off during regular working hours to deprive them of any time, which
they have gained by working overtime. At one (1) week intervals, the COMPANY will make every
reasonable effort to post overtime equalization lists in each zone or departments and to distribute
such overtime work as equally as practicable.	 	 
	 
	 	 	 	 	 	 
	19	 	Section 6 - Overtime Meals
	 
	 	 	 	 	 	 
	

	 	a)
	 	If an employee works more than two hours immediately following his scheduled working period, he
shall be provided a meal. The employee will be afforded an opportunity on COMPANY time to eat meals
so supplied at the time he is entitled to same, or as soon thereafter as the condition of the work
permits.	 	 
	 
	 	 	 	 	 	 
	

	 	b)
	 	Any employee called out (with less than four (4) hours’ notice), will be supplied with a suitable
meal at the COMPANY’S expense after four (4) hours of work. If the employee continues working on
overtime, outside his regular or scheduled shift, he will be furnished a meal every four (4) hours.
If the employee works into his scheduled shift, one additional mid-shift meal will be furnished from
the COMPANY’S frozen food supply if the employee was/is otherwise unable to provide his own lunch due
to the call-out.	 	 
	 
	 	 	 	 	 	 
	

	 	c)
	 	Employees scheduled on overtime, other than provided in (a) or (b) above, will provide their own
meals.	 	 
	 
	 	 	 	 	 	 
	20	 	Section 7 - Shift Differential
	 
	 	 	 	 	 	 
	

	 	a)
	 	Shift differential shall be added to the wage rate of the employees required to work during the
shift indicated in the following schedule for each hour worked during such periods:	 	 

	1)	 	Eight Hour Shift Workers:

	 	 	 	 	 
	Days No
	 	differential
	Evenings
	 	50¢ differential
	Graveyards
	 	$1.00 differential

	2)	 	Day Workers

	 	 	 	 	 
	Days No
	 	differential
	Evenings
	 	50¢ differential
	Graveyards
	 	$1.00 differential

	3)	 	For shifts longer than 8 hours in duration:

	 	 	 	 	 
	Days No
	 	differential
	Nights
	 	$1.00 differential

-6-

 

	 	 	 	 	 	 	 
	21	 	Section 8 - Transportation
	 
	 	 	 	 	 	 
	

	 	a)
	 	The COMPANY will provide rides home for employees who are without transportation and are held over
on overtime past their regular scheduled shift. The COMPANY further agrees that employees not held
over but left without a ride home due to their driver being held over will be provided a ride with
the understanding that only one ride to one destination will be provided. Should evidence of abuse
or fraud arise, the COMPANY reserves the right to discontinue the practice of providing rides to
those passengers not held over.	 	 
	 
	 	 	 	 	 	 
	22	 	Section 9 - Bypassing
	 
	 	 	 	 	 	 
	

	 	a)
	 	When an employee has worked sixteen (16) continuous hours and up to or within the employee’s
regular shift, the employee will be allowed to go home and will be paid at the straight-time for the
remaining hours of the employee’s regular shift, or the employee may be bypassed for overtime if it
will require that he be sent home with pay for his regularly scheduled shift. This decision will be
made by supervision.	 	 
	 
	 	 	 	 	 	 
	

	 	b)
	 	The COMPANY agrees that in scheduling overtime, no employee shall be bypassed in the assignment of
overtime to work solely to avoid payment of double-time, except as referenced above.	 	 
	 
	 	 	 	 	 	 
	

	 	c)
	 	The “rain-out” clause in the contractor’s contract or straight-time work on Saturday, Sunday, or
holidays as may be provided under the contractor’s contract, will not be used to avoid Sterling
employee’s overtime.	 	 
	 
	 	 	 	 	 	 
	23	 	Section 10 – Maintenance Overtime
	 
	 	 	 	 	 	 
	

	 	a.)
	 	Maintenance overtime will normally be scheduled and assigned from within the zone group.	 	 
	 
	 	 	 	 	 	 
	

	 	b.)
	 	If unable to fill the overtime need, volunteer employees from other zones may be offered the
overtime. If unable to fill the overtime need, employees may be conscripted from the zone first, and
then from the rest of the plant.	 	 
	 
	 	 	 	 	 	 
	

	 	c.)
	 	For job continuity, jobs started by contractor personnel may, at the COMPANY’S discretion, be
worked to completion by the contractor. Also for job continuity purposes, Management may, at its
discretion, decide to hold over the Sterling craftsmen who started a job, in order to complete it on
overtime.	 	 
	 
	 	 	 	 	 	 
	

	 	d.)
	 	The COMPANY shall have the right to institute an on-call system for contacting employees for
overtime.	 	 
	 
	 	 	 	 	 	 
	

	 	e.)
	 	Shutdown/Turnarounds — The COMPANY reserves the right to contract shutdown/turnaround work.
Employees from the affected zone group may volunteer or be conscripted to work parts of the shutdown.	 	 
	 
	 	 	 	 	 	 
	

	 	f.)
	 	Management shall have the right to set start and end times for shutdown/startup related work.	 	 

-7-

 

ARTICLE 5

VACATION

	 	 	 	 	 
	24

	 	a)
	 	The vacation allowance for employees with less than five years of
service shall be eighty (80) hours, in which case vacation credits will
be given at a rate of six and two-thirds (6 2/3) hours per month of
service for a maximum of eighty (80) hours. Fractional credits shall
be figured to the next 8-hour increment. Vacation credits are not
accumulative during the probationary period specified in Article 6,
Section 2, but after such period the new employee’s vacation credits
shall be calculated from the date of employment.
	 
	 	 	 	 
	

	 	b)
	 	Vacation credits accumulated after January 1st of the current year
shall not be taken until January 1st of the following year. Vacation
must be taken in full shift increments.
	 
	 	 	 	 
	

	 	c)
	 	Each employee who completes five (5) or more years of continuous
service will be granted one-hundred twenty (120) hours of vacation per
year. Such vacation may be taken at any time during the vacation year
in which the employee reaches the fifth (5th) year of continuous
service. After receiving a first vacation of one-hundred twenty (120)
hours, the employee will accrue ten (10) hours vacation per month of
service or a maximum of one-hundred twenty (120) hours per year.
	 
	 	 	 	 
	

	 	d)
	 	Each employee who completes ten (10) or more years of continuous
service will be granted one-hundred sixty (160) hours of vacation per
year. Such vacation may be taken at any time during the vacation year
in which the employee reaches the tenth (10th) year of continuous
service. After receiving a first vacation of one hundred sixty (160)
hours, the employee will accrue thirteen and one-third (13-1/3) hours
of vacation per month of service or a maximum of one hundred sixty
(160) hours per year.
	 
	 	 	 	 
	

	 	e)
	 	Each employee who completes twenty (20) or more years of continuous
service will be granted two-hundred (200) hours of vacation per year.
Such vacation may be taken at any time during the vacation year in
which the employee reaches the twentieth (20th) year of continuous
service. After receiving a first vacation of two-hundred (200) hours,
the employee will accrue sixteen and two-thirds (16-2/3) hours of
vacation per month of service or a maximum of two-hundred (200) hours
per year.
	 
	 	 	 	 
	

	 	f)
	 	Each employee who completes thirty (30) or more years of continuous
service will be granted two-hundred forty (240) hours of vacation per
year. Such vacation may be taken at any time during the vacation year
in which the employee reaches the thirtieth (30th) year of continuous
service. After receiving a first vacation of two-hundred forty (240)
hours, the employee will accrue twenty (20) hours of vacation per month
of service or a maximum of two-hundred forty (240) hours per year.
	 
	 	 	 	 
	

	 	g)
	 	The vacation pay for employees entitled to vacation is computed on
the basis of rate of pay per hour at the time of vacation at
straight-time.
	 
	 	 	 	 
	

	 	h)
	 	Vacation period shall be from January 1 through December 31 each
year.
	 
	 	 	 	 
	

	 	i)
	 	The employee with the greatest bargaining unit seniority within the
group or craft, wherever possible, shall be allowed preference as to
time of vacation within each department and within each maintenance
zone. When an employee elects to split their vacation, then they shall
be allowed seniority preference only on one (1) portion of the split
vacation until all employees have exercised their seniority preference.
	 
	 	 	 	 
	

	 	j)
	 	Prior to January 1st, employees shall designate their choices of
dates for their vacations and a vacation schedule for the year will be
made up in accordance with other provisions of this article.
	 
	 	 	 	 
	

	 	k)
	 	An employee may place up to eighty (80) hours (ten days) of their
vacation in a vacation bank prior to January 1 with such days to be
taken at any time during the vacation year on a first-come basis in an
individual operating unit, in a maintenance craft within a zone, or in
any other department. Five (5) bank days may be taken with one (1)
hour’s notice. Twenty-two (22) hours’ notice for the other five (5)
bank days will be required except in cases of emergencies. All normal
requests for bank days must be made to the employee’s supervisor.
Emergency requests will be subject to approval by the department head
or designee. Bank days will be granted only when, in the judgment of
the COMPANY, such days do not conflict or impair plant operations.
Bank days will be taken in any combination of whole days without

-8-

 

	 	 	 	 	 
	

	 	 	 	restriction by vacation splits. All bank days must be taken during the
vacation year and shall not be cumulative. When, in the opinion of the
COMPANY, it appears that vacation bank days are accumulating in a
group, department or craft and will create a problem near the end of
the vacation year, employees will be requested to schedule their
remaining bank days in order not to conflict with or impair plant
operations.
	 
	 	 	 	 
	

	 	l)
	 	Vacation may be split into as many periods as the employee has weeks
of vacation. In calculating vacation splits, the bank days will
constitute one split. Employees with ten (10) or more years of service
will be eligible for one (1) additional split. Vacation schedules
established by January 1st will not be altered after this date to give
preference to the senior employee. Employees shall be permitted to
begin or end their vacations on a regularly scheduled day off.
	 
	 	 	 	 
	

	 	m)
	 	Vacations shall be given employees on such dates or as near as may
be practicable when, in the judgment of the COMPANY, such dates do not
conflict with or impair plant operations.
	 
	 	 	 	 
	

	 	n)
	 	Vacation during any vacation period must be taken during the
vacation period and shall not be cumulative. Requests for exceptions
to this requirement will be considered by management on a case by case
basis.
	 
	 	 	 	 
	

	 	o)
	 	For the purpose of taking extended vacation, employees with five (5)
or more years of service will be permitted, one (1) time during the
life of this contract to elect to hold over forty (40) hours of
vacation from one (1) vacation period and take it during the next
vacation period in conjunction with the full vacation due that vacation
period. Employees desiring to exercise this option will so advise the
COMPANY during the vacation-scheduling period in the year in which they
desire to hold over the forty (40) hours.
	 
	 	 	 	 
	

	 	p)
	 	Employees with ten (10) to nineteen (19) years of service have the
option to hold over forty (40) hours of vacation from one (l) vacation
period and take it during the next vacation period. Employees desiring
to exercise this option must notify the COMPANY by November 1st prior
to the end of the vacation year in which it was originally expected to
be taken. This request does not increase the number of bank days.
	 
	 	 	 	 
	

	 	q)
	 	An employee who is “Combo 80” (minimum age 55 with 80 points) or who
has at least 20 years of COMPANY service, may carry over from one
vacation period to the next up to eighty (80) hours of vacation in
forty (40) hour increments. A maximum of two hundred forty (240) hours
may be carried over in this manner.
	 
	 	 	 	 
	

	 	r)
	 	Any employee leaving the service of the COMPANY entering State or
Federal military service shall so notify the COMPANY, and shall be paid
the vacation credits earned up to the time of induction. Such employee
shall not be taken off the payroll until actually inducted in military
service, State or Federal.
	 
	 	 	 	 
	

	 	s)
	 	In calculating time for vacation credits, no vacation will accrue
after the sixth month of sick leave or otherwise while not actively at
work.
	 
	 	 	 	 
	

	 	t)
	 	In case an employee is dismissed or leaves the COMPANY’S service
voluntarily, they will receive vacation pay to the extent of the
credits accumulated at the time of their dismissal or voluntary
separation.
	 
	 	 	 	 
	

	 	u)
	 	In case an employee resigns without notice or is discharged for
cause, they will receive only pay for vacation earned during the
previous year but not taken. Such employees will not be eligible to
receive vacation accrued in the current vacation year up to the time of
their removal from the payroll.
	 
	 	 	 	 
	

	 	v)
	 	When a holiday is observed on an employee’s scheduled vacation day,
they will have the option of an extra day vacation or an extra eight
(8) hours’ pay at their regular straight-time rate.
	 
	 	 	 	 
	

	 	w)
	 	When a day of vacation falls on a holiday and the employee elects to
take an extra day of vacation, they may elect to take it the last
working day immediately prior to their scheduled vacation.
	 
	 	 	 	 
	

	 	x)
	 	When an employee transfers from one craft or group to another, the
employee will carry with them their vacation as scheduled for that
year. The transfer of this vacation schedule will not interfere with
the rights of any other employee to their vacation as previously
scheduled.

-9-

 

	y)	 	Back-to-back vacations from one vacation year to the next will be allowed under the following
conditions:

	1)	 	The period of vacation must be for six or more weeks.
	 
	2)	 	The employees who desire to schedule vacation in a continuous period beginning in one vacation
year and ending in another vacation year must schedule such vacation prior to January 1 of the first
vacation year.
	 
	3)	 	If, on the basis of seniority, they will be allowed to schedule their vacation immediately prior
to the end of the vacation year, then they shall be granted vacation preference for the continuous
portion of the vacation, which ends the next vacation year.

	z)	 	For employees hired before January 1, 1996, vacation year allotment will be based on years of
service accrued by March 31 following the end of the vacation year. For all other employees,
vacation year allotment will be based on years of service accrued by December 31 of the vacation
year.

ARTICLE 6

SENIORITY

	25	 	Section 1 — Definitions

	a)	 	By the term “seniority” is meant the status of the employee’s length of service as such.
	 
	b)	 	Four types of seniority shall be recognized:

	1)	 	Group Seniority. This shall consist of the seniority accumulated by an employee working in any
of the groups listed below.
	 
	2)	 	Department Seniority. For matters directly affecting any of the departments in Group 1,
employees in their respective operating departments shall be listed on the Seniority List by order
of Group 1 seniority within their respective department.
	 
	3)	 	Maintenance Craft Seniority. This shall consist of the seniority accumulated by an employee in
the particular maintenance craft in which the employee is working.
	 
	4)	 	Bargaining Unit Seniority. This shall consist of seniority accumulated by an employee in any of
the groups or crafts listed below.

	c)	 	For purposes of paragraph (b) above, group, department, and maintenance craft seniority shall
cover the following:

	1)	 	Group Seniority

	i)	 	Group 1 - All hourly employees in the following operating departments and any others which may be
added and which are designated as operating departments by the COMPANY: Styrene, Nitriles,
Acetic/Methanol/Plasticizers, and Utilities.
	 
	ii)	 	Group 2 - All hourly employees of the Laboratory.
	 
	iii)	 	Group 4 - All hourly employees of the Materials Handling Department.

	2)	 	Department Seniority

	i)	 	For matters directly affecting departments in Group 1, employees in the various operating
departments shall be listed on department seniority lists by Group 1 seniority within their
respective departments. Any reference to departmental seniority in other sections of the contract
will refer to the Group 1 seniority of employees within the department.

-10-

 

	3)	 	Maintenance Craft Seniority

	i)	 	All hourly employees in each of the maintenance crafts. The maintenance crafts shall include,
but shall not be limited to the following titles:

	 	 	 
	Pipefitters

	 	Carpenters
	Asbestos Workers

	 	Instrument/Electrical
	Boilermakers/ Ironworkers

	 	Machinists
	Painters

	 	Operating Engineers
	Laborers
	 	 

	26	 	Section 2 — Commencement

	a)	 	All new employees shall be required to work a trial or probationary period of one-hundred eighty
(180) calendar days continuous service before the seniority rules outlined herein shall apply to
them, and after such period, the new employee’s seniority shall be retroactive to the date they were
employed.
	 
	b)	 	Straight-day employment shall be determined on the basis of senior qualified. New employees
will be required to go on shift within not more than ninety (90) days after employment.
	 
	c)	 	When employees are hired into a group or craft on the same date, their order on the seniority
lists shall be determined by “lot”.

	 
	d)	 	In a situation where departmental seniority is equal, the group seniority shall govern, and when
group or craft seniority are equal, seniority on the first day worked in the bargaining unit shall
govern.

	27	 	Section 3 — Seniority Lists

	a)	 	The COMPANY agrees to compile and furnish the UNION a seniority list quarterly, showing the
seniority of each employee in bargaining unit, and the COMPANY further agrees that it will add names
and the seniority status of all employees to said list after they have completed their probationary
period and are considered regular employees.

	28	 	Section 4 — When Seniority Does Not Apply or Is Not Affected

	a)	 	Seniority privileges shall not apply to probationary
employees.
	 
	b)	 	The Seniority of an employee shall not be affected when they are promoted to a supervisory
classification unless they remain in that capacity for a period in excess of one hundred thirty-five
(135) calendar days after which time they shall lose their seniority as a member of the bargaining
unit.
	 
	c)	 	The seniority of an employee shall not be affected when they are promoted temporarily to a
supervisory classification unless they remain in that capacity for a period in excess of one-hundred
and eighty (180) working days in a calendar year, after which time they shall lose their seniority
as a member of the bargaining unit.
	 
	d)	 	Employees, other than temporary employees, who are called into active military service with any
branch of the U. S. government, shall not lose their seniority rights or their status with the
COMPANY. Such employees, however, shall file an application with the COMPANY for reinstatement,
within ninety (90) days after they have received an Honorable Discharge from such service and if
their physical and mental condition is satisfactory, such employee shall be reinstated to their
former position or one to which their seniority entitles them, unless the COMPANY’S circumstances
have so changed as to make it impossible or unreasonable to do so.

-11-

 

	29	 	Section 5 — When Group, Department, Craft and Bargaining Unit Seniority is Lost

	a)	 	An employee under the following circumstances shall lose all seniority:

	1)	 	When the COMPANY discharges them.
	 
	2)	 	
When they quit the service of the COMPANY of their own volition.
	 
	3)	 	When they are laid off for a period exceeding eighteen (18) months without being recalled.
	 
	4)	 	When an employee overstays their leave of absence without notifying the COMPANY and receiving
an extension of time.

	30	 	Section 6 — When Group, Department, Craft, and Bargaining Unit Seniority is Not Broken

	a)	 	Seniority of the employee shall not be broken because of: (1) layoffs (except as provided in
Section 5 a) 3) of this article); (2) authorized leaves of absence; (3) absences on account of
occupational or non-occupational sick leave not exceeding a period of twelve (12) months; (4) any
cessation of work at the COMPANY’S plant which is beyond the control of the employee not
exceeding a period of eighteen (18) months.

	31	 	Section 7 — Consolidation of Departments

	a)	 	When two or more departments are consolidated, the employees of these departments may claim
seniority in the consolidated department, it being understood, however, that no employee may
claim a classification in the consolidated department higher than the one occupied in the
department in which the employee was previously employed.

	32	 	Section 8 — Promotions

	a)	 	When a new vacancy or new job occurs in a department or craft, such vacancy or new job shall
be filled from employees within that department or craft. When skill and ability are
approximately equal, then the senior qualified employee shall fill the vacancy. If departmental
seniority is equal, group seniority shall govern.
	 
	b)	 	It is understood and agreed, however, that where skill and ability are questioned, a senior
employee may request the opportunity to fill such vacancy or new job, in which event, the COMPANY
agrees to consult with the UNION concerning the matter. If it is determined that the request has
merit, the employee will be given a trial period of thirty (30) working days to prove to the
satisfaction of the COMPANY their skill and ability in such position.

	33	 	Section 9 — Job Bidding Procedure

	a)	 	When a permanent vacancy must be filled from outside the group or craft in which the vacancy
exists and no layoff exists for such group or craft, then the job will be posted and filled in
accordance with the following procedure:

	1)	 	Job Posting — The job vacancy will be posted for seven (7) calendar days at each of the main
gates and on departmental bulletin boards within the plant.
	 
	2)	 	Job Bidding — Each employee who desires to bid for the posted job may do so by going to the
Human Resources Department and signing a job bidding form within the seven (7) day period.

	i.)	 	 Any employee who knows that they will be absent from the plant (for reasons such as vacation,
jury duty, etc.) may submit to the Human Resources Department a pre-bid indicating those jobs
they desire should a vacancy be posted during their absence. The employee submitting a pre-bid
will be considered for a vacancy only if their pre-bid is received prior to the seven (7) day
period

-12-

 

outlined in the job vacancy announcement. Each pre-bid shall be effective only for the
duration of the individual’s specific absence.

	b)	 	Selection — Posted vacancies will be filled by the qualified bidder with the greatest
bargaining unit seniority. Successful bidders will be transferred to their new job within 120
calendar days following the date of notification of successful bid unless the COMPANY
demonstrates, subject to the grievance and arbitration provisions of the contract, that to move
said successful bidder would create a situation where the employee’s job cannot be manned in a
safe manner.

	1)	 	The successful bidder will enter the new job classification at the appropriate rate as
indicated on the job vacancy announcement.
	 
	2)	 	The provisions of Section 11 of this Article will apply to employees who are transferred from
one group or craft to another in accordance with the job bidding procedure.

	c)	 	Bidding Rules

	1)	 	If the COMPANY determines that the senior employee bidding on a posted job is not qualified,
the employee may file a grievance contesting such determination at Step 2 of the grievance
procedure, which may, if not satisfactorily resolved, be submitted to arbitration in accordance
with the arbitration procedure as outlined in Article 28. Nothing contained herein shall
interfere with the filling of the vacancy with another employee or with a new hire, pending
settlement of a grievance.
	 
	2)	 	Employees whose bids have been denied on the basis of qualifications will not be considered
again for transfer to the same group or craft until they have shown proof that their
qualifications now fit the requirements of the job.
	 
	3)	 	A successful bidder will not be eligible for another transfer until they have reached the top
rate of their classification and served an additional period of time equal to the time required
to reach the top rate.
	 
	4)	 	A successful bidder who refuses to accept a tendered transfer will not be reconsidered for any
other transfer for a period of one (1) year after date of refusal.

	d)	 	An employee who has been returned to their last previous group or craft for inability to
perform work of the new classification as provided in Section 11, Article 6 of the Articles of
Agreement will not be considered for any further transfer for a period of one (1) year from the
date of return to their last previous group or craft.
	 
	e)	 	An employee shall be limited to one transfer to a group or craft having a lower top rate or
one transfer to group or craft having an equal top rate. Subsequent lateral or downward transfer
to another group or craft shall be approved only when in the best interest of the employee and by
mutual agreement of COMPANY and UNION.
	 
	f)	 	No Qualified Bidders — If none of the bidders are qualified for a posted job, or if there are
no bidders, the COMPANY shall have the right to fill the job as it sees fit.
	 
	g)	 	Associate Operators — Associate operators will be selected based on criteria determined at
management discretion.

	34	 	Section 10 — Transfers

	a)	 	When surplus Group 1 employees exist in one operating department and openings exist in
another, transfers from the surplus department will be on a volunteer-by-seniority basis. Those
employees with the most Group 1 seniority in the department being destaffed who wish to transfer
out of the department to another operating department will be allowed to volunteer. If not
enough employees volunteer to transfer, then the necessary number will be destaffed by moving the
junior employee based on Group 1 seniority within the department being destaffed. In either
case, the employee may be recalled to their original

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departments at the COMPANY’S discretion for
up to one year from the date of transfer. If employees are recalled to their original
departments, those transferred involuntarily will be recalled first, according to Group 1
seniority; those who transferred voluntarily will be recalled in inverse order of Group 1
seniority.

	b)	 	If an operating unit is shut down or temporarily under reduced operation resulting in an
excess of employees in any group, the UNION and the COMPANY will meet and discuss a plan whereby
these employees may be put to work so as to prevent layoff. Employees in these groups may be
assigned as helpers in maintenance or in other groups.
	 
	c)	 	A General Mechanic classification is established to increase the skill level of existing
Carpenters, Asbestos Workers, Laborers, Painters, and Stores Clerk. All current employees in
these classifications are eligible to receive training to qualify for transfer into this
classification.

	35	 	Section 11 — Layoffs

	a)	 	Layoffs in all groups and maintenance craft departments shall be in inverse order of group, or
craft seniority, depending on the need for employees in that particular group or craft, it being
understood that in any group or craft the top classification will not be filled by an employee
not having both skill and ability and group or craft seniority.
	 
	b)	 	An employee transferred from one group or craft shall retain seniority in their former group
or craft but will not be allowed to exercise their seniority, nor shall the COMPANY be allowed to
transfer the employee back to their old group or craft unless the employee is being laid off for
reduction in force or because their work performance has been such that the employee would be
laid off for inability to perform the work.
	 
	c)	 	Employees being laid off for reduction in force may exercise the retained seniority in their
old group or craft to forestall layoff provided that they meet the current qualification
requirements of their previous job.
	 
	d)	 	An employee being laid off for inability to perform the work prior to reaching top pay in the
classification in the group or craft to which they were transferred will be considered to have
accumulated seniority in their old group or craft up to the time they were declared unable to
perform such work and will be allowed to exercise that seniority in their old group or craft to
forestall layoff. An employee transferring to a one rate job will be given a trial period of
ninety (90) days and, if unable to perform the work, will be considered to have accrued seniority
in their old group or craft during that period. They will be allowed to exercise such seniority
in order to forestall layoff.
	 
	e)	 	Discharge for cause or termination for any reason other than those referred to above will not
be reason for the employee to exercise their seniority rights in the old group or craft.

	36	 	Section 12 — Rehiring

	a)	 	Rehiring shall be in inverse order of layoffs. Employees being recalled shall be notified by
registered letter, return receipt requested, mailed to the last address on record in the
COMPANY’S files. If the COMPANY does not receive a reply to said letter from the employee,
within ten (10) days from the date of its delivery as shown on the return receipt, stating that
they will return to work within ten (10) days from said delivery date; or, if they fail to so
return to work although they have sent such a reply, the next eligible employee will be placed in
the vacancy.
	 
	b)	 	In special cases, an employee, when replying within ten (10) days to the COMPANY’S notice
requesting them to return to work, may be given an extension of time by the COMPANY beyond the
ten (10) day limit specified above. Failure to so reply or failure to so report to work will
abrogate all rehiring and seniority rights on the part of said employee. In case of an
emergency, the COMPANY may temporarily fill any vacancy without waiting for any period of time to
expire. After the emergency has expired, such vacancies will be filled according to the regular
procedure.
	 
	c)	 	Where the period of recall is in the best judgment of the COMPANY to be less than ninety (90)
calendar days, the recalled employees may decline recall and not lose subsequent recall rights.

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	d)	 	If the period of recall is less than a 40 hour work week, the COMPANY is not obliged to recall
an employee for such assignment.

	37	 	Section 13 — Grievances

	a)	 	In all cases where the UNION or the employee claims that the principle of seniority has been
violated, such grievance must be taken up within ten (10) days of the alleged violation and shall
be handled according to the procedure set out in Article 27 hereof. In the event the employee
grieved is not actively working on the day of such violation, the period of limitation shall
begin on the day the employee returns to work.

ARTICLE 7

SUPERVISORS DOING HOURLY WORK

	 	 	 	 	 
	38

	 	a)
	 	Anyone employed by the COMPANY in the capacity of a foreman or a supervisor will be permitted
to perform work that is normally performed by bargaining unit employees, except as limited by
Article 7 (b), below.

	b)	 	Foremen and supervisors will not be permitted to perform work normally performed solely by
bargaining unit employees, if bargaining unit employees are laid off as a direct or indirect
result or if the direct or indirect result is that employees on the recall list are prevented
from being recalled. It is expressly agreed that work that is normally performed both by
bargaining unit employees and by foremen or supervisors is not “work that is normally performed
solely by bargaining unit employees” and consequently is not covered by the preceding sentence.
The management of the COMPANY will determine, in its sound discretion, whether employees would be
laid off and whether recalls would be prevented as a result of the performance by foremen or
supervisors of “work normally performed solely by bargaining unit employees.”

ARTICLE 8

WORK CLASSIFICATIONS

	 	 	 	 	 
	39

	 	a)
	 	Wage rates for all classifications of work within the bargaining unit shall be mutually agreed
to between the COMPANY and the UNION, set forth separately, and attached to this Agreement and
marked “Exhibit B”.

ARTICLE 9

STAFFING OF NEW UNITS

	 	 	 	 	 
	40

	 	a)
	 	The COMPANY agrees to consult with the UNION in connection with the staffing of new units or
consolidation of departments in the operating section.

ARTICLE 10

STEWARDS

	 	 	 	 	 
	41

	 	a)
	 	The UNION may designate for each Department in Operations and each craft in Maintenance, a
Shop Steward who shall call to the attention of the foreman or supervisor any questions of
working conditions that may arise in their department or craft.

	b)	 	Discussion between the Shop Steward and Foreman and/or the Supervisor shall be at such time
and place as not to interfere with work in the department or craft.

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	c)	 	If the Shop Steward and Foreman or Supervisor are unable to agree,
the matter will be referred to the department head involved in
accordance with procedure for handling grievances as set out in
Article 27, it being agreed that the Shop Steward shall suffer no loss
in pay for acting in that capacity.
	 
	d)	 	Any employee called in for discussion that might result in
disciplinary action or any entry to be made in their personnel file
may be permitted to have a Steward present.
	 
	e)	 	One person within the bargaining unit designated by the Business
Manager of the UNION may be named to act in the capacity as a Benefits
Steward for hourly employees. This Steward shall be provided with a
locked file cabinet in a suitable location within the plant in which
to file records and information. All medical, dental, disability, and
other benefit forms and associated correspondence presented or
received by the COMPANY are confidential and private information and
the COMPANY is required to treat it as such. Any confidential records
and information sought by the UNION shall be obtained directly from
the concerned employee or, with written permission by the employee,
from the Human Resources Department.
	 
	f)	 	Nothing in this agreement shall be construed as preventing any
employee so represented from dealing directly with the COMPANY’S Human
Resources personnel.

ARTICLE 11

CONTRACT WORK

	 	 	 	 	 
	42

	 	a)
	 	The COMPANY reserves the right to utilize independent contractors
for any purpose, including the performance of any amount of work
normally performed by employees in the bargaining unit, provided
employees in Groups 1 and 4, and the Instrument/Electrical and
Machinist crafts are not laid off as a direct or indirect result of
such work being contracted out; nor shall any such work contracted
prevent the recall of laid off employees from these groups. It is
further agreed that (consistent with the terms of the parties’
previous collective bargaining agreements and past practices) the
performance of such work under any circumstances by contractor
personnel shall not result in such personnel becoming part of the
bargaining unit or in the application of the terms of this Agreement
to such personnel, whether they are deemed to be jointly employed by
Sterling or otherwise.
	 
	 	 	 	 
	

	 	 	 	Employees laid off on or before 5/1/05 as a result of the above
provisions will be entitled to 1.5 times the severance allowance
provided in Article 19.

ARTICLE 12

PAY DAY

	 	 	 	 	 
	43

	 	a)
	 	All regular employees covered by this Agreement shall be paid in
full, once every two weeks on regular paydays established by the
COMPANY except that when a holiday falls on a payday, the employees
will be paid the day before the holiday. Each employee on paydays
shall be provided with an itemized statement of gross earnings and all
deductions for any purpose.

	b)	 	Paychecks may be directly deposited with the financial institution
of the employee’s choice, if possible, and if the individual
bargaining unit employee signs a statement so indicating and holding
the COMPANY harmless if their financial institution has not credited
their account in a timely manner.
	 
	c)	 	The COMPANY further agrees that if any questions arise concerning
time credited or pay received by an employee, the time cards and other
pertinent records will be made available for examination to the
employee and the Shop Steward. In the event the difficulty cannot be
resolved at that time, then the same shall be considered a grievance
and handled according to the regular grievance procedure.
	 
	d)	 	A pay error of less than eight (8) hours pay will be corrected on
the next regular paycheck. An error of eight (8) or more hours pay
will be corrected via a special make-up check.

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ARTICLE 13

PHYSICAL EXAMINATIONS

	 	 	 	 	 
	44

	 	a)
	 	An applicant for employment, before being hired, must meet certain
minimum standards of health and physical fitness. A licensed
physician employed by the COMPANY will give the physical examination.

	b)	 	Periodic examinations of employees will be carried on with the
principal idea of helping employees improve their own health condition
and to enable COMPANY to guard the health of its employees.
	 
	c)	 	Employees who become physically unfit to perform one or more of the
essential functions of their assigned classification, may be assigned
other work, if available, and until, in the opinion of the doctor
retained by the COMPANY, the employee is able to resume the work of
their designated classification.
	 
	d)	 	The COMPANY agrees to continue notification and to send a copy of
such individual test results to employees who fall outside the normal
medical limits and to provide a copy to an employee who comes to the
Heath Services Department and requests such information.
	 
	e)	 	When an employee is scheduled for a chest x-ray as part of their
physical, the COMPANY will provide for the x-ray to be read by a
“B-Reader”. For employees in the Insulator Craft, a second x-ray,
read by a “B-Reader”, will be provided at six (6) month intervals at
the request of an insulator.

ARTICLE 14

DISCRIMINATION

	 	 	 	 	 
	45

	 	a)
	 	No members of a signatory union shall be discriminated against,
discharged or harassed on account of their activities or interest in
their UNION while carrying out in good faith the terms of this
Agreement.

	b)	 	Charges of such discrimination, discharge or harassment, if any,
shall be handled according to the regular grievance procedure.

ARTICLE 15

UNION REPRESENTATIVES

	 	 	 	 	 
	46

	 	a)
	 	When in the opinion of a Steward or Plant Committeeman, or the
COMPANY, the counsel of a business representative of the Texas City,
Texas Metal Trades Council, or any of the organizations signatory to
this Agreement, is advisable or necessary to aid in the resolving of a
grievance that has arisen, such business representative shall be
permitted to enter the premises of the COMPANY, subject to the
regulations governing visitors to this plant.

ARTICLE 16

JURY SERVICE

	47	 	Employees kept away from work because of reporting for jury service or
for service as a witness under court subpoena will be paid their
regular straight-time hourly rate, exclusive of any overtime or other
premium pay, subject to the following provisions.
	 
	48	 	Section 1 — Morning Court Appearance

	a)	 	Employees working days are not required to report back for work if
dismissed from court duty at or after 12:00 p.m. Employees dismissed
before 12:00 p.m. are required to report for work and complete the
workday.

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	b)	 	Employees on the 10:30 p.m. to 6:30 a.m. (or 11:30 p.m. to 7:30
a.m.) shift shall not be required to work the shift on the calendar
day of their first day in court, nor any other 10:30 p.m. to 6:30 a.m.
(11:30 p.m. to 7:30 a.m.) shift falling on a day they are scheduled to
be in court.
	 
	c)	 	Employees scheduled to work the 2:30 p.m. to 10:30 p.m. or 3:30
p.m. to 11:30 p.m. shift are not required to report for their shift if
they are released from court after 10:00 a.m.
	 
	d)	 	Employees scheduled to work the 10:30 p.m. to 6:30 a.m. (or 11:30
p.m. to 7:30 a.m.) shifts are not required to report for work on these
shifts if dismissed from court duty at or after 12:00 p.m. If released
before noon, they are expected to work their scheduled shifts.

	49	 	Section 2 — Afternoon Court Appearance

	a)	 	Employees working days are required to report for work at the
beginning of their shift and will be released a reasonable period of
time prior to their court appearance.
	 
	b)	 	Employees scheduled to work the 2:30 p.m. to 10:30 p.m. (or 3:30
p.m. to 11:30 p.m.) shift are not required to report for work prior to
an appearance in court which begins after the start of their scheduled
shift and before 6:30 p.m. Employees scheduled to work the 2:30 to
10:30 p.m. (or 3:30 p.m. to 11:30 p.m.) shift who serve three (3) or
more hours in court or who are dismissed from court at or after 6:30
p.m. are not required to work the remainder of their scheduled shift
on that payroll day.
	 
	c)	 	Employees scheduled to work the 10:30 p.m. to 6:30 a.m. (or 11:30
p.m. to 7:30 a.m.) shift whose court appearance begins before 3:00
p.m. are not required to work their graveyard shift on that calendar
day. Employees scheduled to work the 10:30 p.m. to 6:30 a.m. (or
11:30 p.m. to 7:30 a.m.) shift are not required to work the shift
falling on the payroll day of an appearance in court if released from
court at or after 3:00 p.m.

	50	 	Section 3

	a)	 	Employees are required to furnish proof from the court of such
service, showing the date and time served and amount paid for their
services. With regard to jury service, the COMPANY agrees to treat
the documented release time the same for standby as for court
appearances.

	51	 	Section 4

	a)	 	An employee who is to report for court duty in the afternoon shall
be given a reasonable period of time to go home, change clothes, etc.,
eat and then drive to the courthouse for duty; or that an employee
released from court duty before 12:00 p.m. shall be given reasonable
time to go home, change clothes, eat and drive to the plant.

ARTICLE 17

ELECTION DAY REGULATIONS

	 	 	 	 	 
	52

	 	a)
	 	It is further agreed that arrangements shall be made so that all
employees working days or day shifts who are requested to work
overtime, shall have sufficient time off to vote on election days
covering City, State, and National elections, and such time off shall
not be deducted from the employee’s wage.

	b)	 	An employee appointed as an election judge or observer or those
elected as delegates to political conventions shall be granted (a)
vacation bank days if eligible; or (b) an excused absence. The
request must be made in advance and must not conflict with or impair
plant operation.

-18-

 

ARTICLE 18

REPLACEMENT OF CLOTHING

	 	 	 	 	 
	53

	 	a)
	 	Any employee required to perform work which results in the damage to clothes or shoes by
chemical or fire action, to such an extent they are no longer suitable for wear, shall be
furnished with suitable clothing or be given a cash replacement allowance provided the damage
did not occur due to the employee’s failure to wear proper PPE when required; reimbursement is
to be at replacement cost less depreciation for normal wear. Replacement cost shall mean the
cost to replace the clothing at the time it is ruined.

	b)	 	All employees required to perform work which results in damage to clothes and shoes by
chemical or fire action will be furnished proper protective clothing and equipment which is
appropriate under the conditions prevailing. All such clothing and equipment shall be
returned, as directed by the COMPANY, at the completion of an assignment or shift, whichever is
applicable.

ARTICLE 19

LAYOFF NOTICE — SEPARATION ALLOWANCE

	 	 	 	 	 
	54

	 	a)
	 	Whenever it is necessary to lay off an employee or employees because of lack of work due to
curtailment of production, process changes, changing requirements of craft work, or any other
reason beyond control of the COMPANY, such employee or employees shall be given ten (10)
working days’ notice of such layoff. The COMPANY shall have the option of paying for their
time in lieu of notice.

	b)	 	In the event of a hurricane evacuation, acts of God or other situations beyond the
reasonable and direct control of the COMPANY, the notice provisions of this Article will not
apply.
	 
	c)	 	If it is necessary to lay off employees because of any labor dispute preventing normal
operations of the plant, three (3) calendar days’ notice will be given. The COMPANY shall have
the option of paying for this time in lieu of notice.
	 
	d)	 	Hourly paid employees, who are laid off as a result of economic curtailment, will be
eligible for a separation allowance in keeping with the following provisions:

	55	 	Section 1 — Mode of Compensation

	a)	 	The Separation Allowance is computed on the basis of years of continuous service with the
COMPANY. Continuous service for the purpose of this agreement is defined as time spent working
for the COMPANY computed from the employee’s last date of hire. The maximum allowance for any
given period of layoff shall be as follows:

ALLOWANCE SCHEDULE

	 	 	 
	Years of Continuous Service
	 	Pay Allowance

	Under 1 year
	 	2 weeks
	1 through 4
	 	4 weeks
	5 through 9
	 	8 weeks
	10 or more
	 	12 weeks plus 1/2 week
	 
	 	for each year in excess of 10

	56	 	Section 2 — Method of Payment

	a)	 	The Separation Allowance will be paid in bi-weekly installments at their regular bi-weekly
pay amount until the maximum allowance specified above is reached, provided the employee
continues to meet the eligibility requirements.

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	b)	 	Should an employee be recalled to active employment before exhausting this maximum
allowance, payments will cease as of the effective date of recall. Any remaining balance will
be available for payment in the event the employee is subsequently laid off before meeting the
full reinstatement requirement specified below. However, in the event the employee meets the
requirements for full allowance reinstatement, the payments will not exceed those specified in
Section (1) above.
	 
	c)	 	Any employee who is recalled to regular active employment after exhausting the maximum
allowance payments will be ineligible for further separation payments until they have completed
78 continuous weeks of active employment, at which time they will again become eligible for
full benefits under Section (1) above.
	 
	d)	 	All monies paid as Separation Allowance will be subject to applicable taxes and other
required withholdings.

	57	 	Section 3 — Eligibility

	a)	 	Separation Allowance is not payable to any employee who:

	1)	 	Resigns or abandons employment for any reason.
	 
	2)	 	Becomes deceased.
	 
	3)	 	Elects normal or early retirement.
	 
	4)	 	Is discharged.
	 
	5)	 	Accepts a position in Sterling that is not within this bargaining unit.
	 
	6)	 	Is receiving either occupational or non-occupational disability benefits until said benefits
are exhausted, and only then, provided the employee is still on layoff status.
	 
	7)	 	Receives total and permanent (Long-Term Disability) disability benefits.
	 
	8)	 	Is recalled from layoff.
	 
	9)	 	Is offered a position with an acquiring company, of equivalent pay and benefits at the Texas
City Plant.

	b)	 	The above Separation Allowance shall not be paid in the event that the lack of work is due
to a labor dispute or to fire, flood, water, or power failure, or other act of God.

ARTICLE 20

LEAVE OF ABSENCE

	 	 	 	 	 
	58

	 	a)
	 	The COMPANY shall grant leave of absence, up to ninety (90) days length, for personal
reasons upon request and explanation by the employee, provided that, in the opinion of the
COMPANY, the reason for the request is worthy and such leave shall not be used, except with the
permission of the COMPANY, for the purpose of accepting other employment and such leave shall
not affect the seniority status of said employee and/or employees.

	b)	 	The COMPANY shall, upon at least ten (10) days notice given by the UNION, grant leaves of
absence not to exceed thirty (30) days, to employees to attend UNION conventions or meetings,
provided not more than a total of three (3) employees from the plant or one (1) employee from a
department shall be away for that purpose at any one time.

	 
	c)	 	The COMPANY shall, upon at least two (2) weeks notice given by the UNION, grant leaves of
absence not to exceed one (1) year in length to a maximum of two (2) employees during any one
period for

-20-

 

purposes of accepting employment with a union signatory to this Agreement.
Employees on such leaves of absence will maintain their seniority status while on leave
providing they maintain continuous service with said union. Such leaves of absence will be
automatically extended on a year-by-year basis for the duration of the Agreement, upon receipt
by the COMPANY, of a written request from the UNION at least two (2) weeks prior to the
expiration of each one (1) year period. Employees desiring to return from such leaves will
give the COMPANY at least two (2) weeks notice in writing, and upon return will be required to
take a pre-employment physical as if they were new employees.

	d)	 	Unpaid leave to care for a newborn child will be administered under the guidelines of the
Family and Medical Leave Act.
	 
	e)	 	Employees elected or appointed to public office will be allowed an excused absence, without
pay, providing their absences do not create a cost to the COMPANY or impair normal operations.

ARTICLE 21

SANITATION AND SAFETY

	 	 	 	 	 
	59

	 	a)
	 	Operating Engineers (Local 450), and other employees who, in order to perform their normal
duties, are required by state law to possess either a commercial or chauffeur’s license shall
be reimbursed the cost of these licenses.

	b)	 	Inspection of any job for safety purpose may be secured upon the request of any employee
assigned to that job; such inspection to be made by a member of the Plant Safety Department or
other supervision with the employee involved. If the result of this inspection indicates an
unsafe condition, the job will be postponed until proper steps have been taken to remedy the
condition unless, in the opinion of the supervisor, postponing the job creates a greater
hazard.
	 
	c)	 	When an employee accompanies an OSHA representative, while on COMPANY time during an
in-plant investigation, said employee shall not suffer any loss of pay.

	60	 	Prescription Safety Glasses -

	a)	 	The COMPANY agrees to pay up to eighty-five dollars ($85.00) applicable to the lenses for
one pair of prescription safety glasses purchased through the Safety Department. Such glasses
may be tinted or clear. Where the employee’s prescription is from a licensed physician and
states that the employee’s eye condition makes it mandatory that they wear dark glasses during
daylight hours, the COMPANY will agree to pay up to an additional eighty-five dollars ($85.00)
for the purchase of an additional pair of shaded glasses. It is also understood that the
COMPANY will pay up to eighty-five dollars ($85.00) applicable to the lenses for the purchase
of new safety glasses when an employee’s prescription is changed.
	 
	b)	 	The COMPANY agrees to provide one pair of colored prescription safety glasses for Operating
Engineers required to operate hoisting equipment. The parties recognize that this is a unique
requirement for that craft and that such provision is not intended to be the beginning of a
colored safety glass program for other groups.
	 
	c)	 	The COMPANY will pay 100% for the initial eye exam from an approved provider. The COMPANY
will pay 75% for subsequent eye exams in two (2) year intervals from an approved provider.

	 
	d)	 	Additionally, up to two (2) pair of non-prescription safety sunglasses will be provided each
year from an approved list.
	 
	e)	 	The COMPANY payment toward frames for prescription safety glasses is $35.00.
	 
	f)	 	The COMPANY agrees to provide one (1) pair of prescription glasses for welders. If
additional glasses are needed, requests will be evaluated and processed by the Plant Safety
Department on a case by case basis.

-21-

 

	g)	 	Up to two pairs of clip-on glasses per year shall be furnished by the COMPANY to the
Operating Engineers, Local 450 members only. Clip-on glasses may be purchased at cost by other
employees at the Safety Supply section. Additionally, the COMPANY agrees to provide one pair
of colored prescription safety glasses for Operating Engineers required to operate hoisting
equipment.

	61	 	Safety Shoes -

	a)	 	The COMPANY will provide to each bargaining unit employee up to two (2) pairs of approved
chemical resistant safety shoes per contract year at the COMPANY’s expense up to a maximum of
$85.00 per pair. Employees will be allowed to opt, instead, for one (1) pair of more expensive
safety shoes per contract year at COMPANY expense up to a maximum of $150.00 per pair. In
either case, the employee will pay the additional cost above the maximum COMPANY dollar
contribution where applicable.

ARTICLE 22

BULLETIN BOARDS

	 	 	 	 	 
	62

	 	a)
	 	It is further agreed that the COMPANY shall provide an electronic bulletin board for the
posting of UNION notices. This board shall be used for the display of the following notices:
	

	 	 	 	UNION meetings, UNION appointments, UNION elections, and UNION social affairs. All notices to
be posted on said board must first have the approval of the Plant Manager or his designee. It
is agreed that no UNION matter of any kind shall be posted in and about the plant except on
said board. In addition, postings must be supplied in the form of a scanable document.
Approved postings will be removed after 10 days.

ARTICLE 23

COMPANY RULES

	 	 	 	 	 
	63

	 	a)
	 	It is further agreed by both parties to this Agreement that fair treatment, good service,
and due diligence in observance of the rules as promulgated by the COMPANY are essential to the
maintenance of satisfactory working conditions and wages described in this Agreement and for
efficient production provided that such rules as may be promulgated by the COMPANY shall not in
any way conflict with the terms of this Agreement.

ARTICLE 24

PRODUCTIVITY STATEMENT

	 	 	 	 	 
	64

	 	a)
	 	The COMPANY and the Texas City Metal Trades Council agree that a profitable and highly
competitive Texas City plant enhances the job security of all plant employees. Both parties
recognize the necessity of making productivity improvements to ensure the future profitability
and competitiveness of the plant.

	b)	 	While acknowledging their respective rights and obligations, the COMPANY and the UNION
further recognize that in today’s rapidly changing business environment a cooperative versus a
confrontational approach to labor relations matters is vital to the plant’s success.
Specifically, the parties have endorsed the following principles to reinforce their emphasis on
this productive collaboration:

	1)	 	A working environment that fosters increased effectiveness, efficiency and productivity of
plant operations is a highly desirable goal all employees should contribute to achieving.
	 
	2)	 	Timely, effective two-way communications are basic to productive plant operations.

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	3)	 	As appropriate, problem solving groups, as well as participative
concepts such as quality circles, may be facilitated. Productivity
improvement plans, programs and results will be periodically reviewed
with the Plant Union Committee.

	c)	 	The COMPANY and the UNION recognize that it is desirable and
mutually beneficial to set up an annual meeting to review Work
Practices vs. Best of Class in Industry. The purpose of these
meetings would be to identify possible areas of improvement that could
enhance the COMPANY’S competitiveness within the industry.
	 
	d)	 	During such meetings, possible areas of improvement identified
which would require modifying, amending, or waiving any of the
provisions of this Labor Agreement shall be implemented only by mutual
consent of both the COMPANY and the UNION.

ARTICLE 25

FUNERAL LEAVE

	 	 	 	 	 
	65

	 	a)
	 	Employees with ninety (90) days of continuous service will be given
a three (3) day leave of absence to attend the funeral of their
spouse, child, parent, brother, sister, parent-in-law, brother-in-law,
sister-in-law, son-in-law, daughter-in-law, grandparent, grandchild,
stepchild, stepmother, stepfather, or spouse’s grandparent. These
shall be three (3) consecutive calendar days, one (1) of which must be
the day of the funeral. Employees will be paid for any such days lost
from work at their regular straight-time hourly rate, exclusive of any
overtime or other premium pay, provided such are their
regularly-scheduled work days. No employee shall receive funeral
leave pay for any day that is not a regularly-scheduled workday nor
for any day on which they are absent from work or on leave for any
other purpose.

	b)	 	Upon the death of a relative of an employee or employee’s spouse
where said relative has been a long term resident of the employee’s
household immediately prior to death and/or confinement to a health
facility, funeral leave provisions shall apply the same as that which
applies to the death of a person defined above within the immediate
family.
	 
	c)	 	The COMPANY agrees that when a death in an employee’s immediate
family, as defined above, occurs while the employee is on vacation,
the employee, with sufficient notice to the COMPANY may stop their
vacation and start their funeral leave in accordance with this
article.
	 
	d)	 	An employee absent from their regular work schedule due to the
imminent death of a listed relative may receive funeral leave provided
such lost time occurs within the three-day period selected by the
employee as funeral leave under this article.
	 
	e)	 	The COMPANY agrees to double the allotted Funeral Leave when two or
more listed family members die concurrently.
	 
	f)	 	Upon return to work, employees shall complete and sign a COMPANY
“Funeral Leave Pay” form and submit satisfactory proof of relationship
to the deceased and of actual attendance at the funeral.
	 
	g)	 	An employee will be excused without the loss of straight time
earnings to serve as an active pallbearer on the day of the funeral of
an employee or retired employee of the Texas City Plant. The request
for the employee to serve must be from a member of the deceased
employee’s immediate family and no more than six (6) employees may be
excused for such pallbearer service at any one funeral. Where the
employee or employees to be excused would result in the impairment of
plant operations, the COMPANY reserves the right to limit the number
of employees absent.

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ARTICLE 26

STRIKES AND LOCKOUTS

	 	 	 	 	 
	66

	 	a)
	 	All members of the UNION agree to conform to the rules and
regulations of the COMPANY insofar as they do not violate the
conditions of these Articles of Agreement. No member of the UNION
employed by the COMPANY shall be discriminated against for upholding
UNION principles not inconsistent with the terms of this Agreement.
The COMPANY and the UNION desire that production shall continue
without interruptions. The COMPANY and the UNION further agree that
good employer/employee relations cannot exist unless there is a
serious effort on the part of both the COMPANY and the UNION to settle
in a peaceable manner all disputes that may arise. Therefore, as a
means of promoting continued production and employment and improved
employer/employee relationships, the COMPANY and the UNION agree that
the grievance procedure and arbitration procedure provided in this
Contract shall be used to peaceably settle without strike disputes
that are covered by such grievance and arbitration procedure.

	b)	 	It is agreed that there will be no lockout by the COMPANY or strike
or work stoppage by the UNION.
	 
	c)	 	In the event of such strike or work stoppage, there shall be no
liability on the part of the UNION, its officers or agents, if such
strike or work stoppage was not authorized, encouraged or condoned by
the UNION.
	 
	d)	 	The UNION agrees to cooperate with the COMPANY and use means at its
disposal to settle such strike or work stoppage and request such
employees to return to work.
	 
	e)	 	This provision shall no longer be binding on the COMPANY or the
UNION if either party has served proper notice requesting changes or
modifications of this Agreement in accordance with the terms of
Article 32 and either party has given written notice that is
discontinuing negotiations.

ARTICLE 27

GRIEVANCE PROCEDURE AND DISCIPLINE RECORDS

	 	 	 	 	 
	67

	 	a)
	 	The parties to this Agreement agree that any dispute, complaints,
or grievance, except those pertaining to discharge, arising out of the
interpretation or application of the terms of this Agreement, shall be
settled promptly in accordance with the following procedure:

	1)	 	It is understood and agreed that no complaint, dispute, or
grievance shall be submitted to either the COMPANY or UNION after a
lapse of ten (10) days from the time the incident causing the
complaint, dispute, or grievance shall have occurred or become known
to the employee.
	 
	2)	 	Step 1 — Any employee or group of employees either individually or
with, or through, their Steward, may discuss with the immediate
supervisor any complaint or other matter which they feel requires
clarification. The supervisor shall have five (5) days in which to
render a verbal decision to said employee(s) and the Steward involved,
if any. Should the decision fail to bring about a satisfactory
settlement in the matter, it may become a grievance and may be handled
in accordance with Step 2.

	i)	 	It is understood that when a group of employees desire a
clarification on a matter in which they are commonly involved, one
employee in the group, with or through the steward, if desired, shall
be designated by the group to discuss the matter with the supervisor.
Matters which do not affect the employees as a group in a common
manner, or which may require individual adjustment, shall be presented
on an individual basis.

	3)	 	Step 2 — Within five (5) days of receipt of the verbal decision at Step 1, the employee or group of employees,
either individually or through their steward, may file the grievance, on forms provided by the COMPANY and the UNION,
through the immediate supervisor to their department head.

-24-

 

	 	 	Within five (5) days of receipt of the grievance, the
department’s supervision, and a representative of the Human Resources
Department shall meet with the employee, their steward, the
appropriate Plant/Union Committeeman and the Business Manager of the
UNION or designee, for the purpose of discussing the grievance.
Supervision shall have five (5) days in which to render a decision.
If the decision brings about a satisfactory settlement of the matter,
it shall be reduced to writing and shall be delivered to the employee,
the steward and the UNION.

	i)	 	If the decision fails to bring about a satisfactory settlement, it
may be appealed in writing by the employee or group of employees,
either individually, or through their Steward, to the Plant Manager or
designee, within ten (10) days of the decision and will be handled in
accordance with Step 3.

	4)	 	Step 3 — A grievance appealed to Step 3 will be entered on the
agenda of the next meeting of the Plant/Union and the Plant Management
Committees if the appeal is received at least ten (10) days prior to
its scheduled meeting. If received within the ten (10) day period
prior to a meeting, it shall be placed on the agenda for the following
meeting.
	 
	5)	 	An employee having a grievance in regard to contractual sick pay
benefits may file a grievance directly with the Human Resources
Department, who shall have five (5) days’ time in which to investigate
and answer the grievance. Should the answer fail to bring about a
satisfactory settlement to the grievance, then the employee may,
within five (5) days, appeal the grievance directly to Step 3 of the
grievance procedure.
	 
	6)	 	After discussion of the grievance by the Plant/Union and Plant
Management Committees, it shall be answered, in writing, to the UNION
within ten (10) days. If the grievance is settled at Step 3, the
answer shall reflect the settlement. If the grievance has not been
settled, then the COMPANY’S answer shall state why the grievance is
denied.

	b)	 	The COMPANY and the UNION recognize that it is desirable and
mutually beneficial to have regular monthly meetings for the purpose
of discussing any grievances placed on the agenda for the respective
meeting. For this purpose, the representatives of the UNION shall
consist of a committee designated by the UNION and shall be called the
Plant/Union Committee (PUC), of which there shall be seven (7)
employee members. Employees in the probationary period of employment
shall not be eligible for membership on the PUC.
	 
	c)	 	If an employee is discharged, the COMPANY, within three (3) days of
the discharge, shall, on request of the employee provide the employee
with a written statement of the reason or reasons for the action
taken. If the UNION desires to protest the discharge, the UNION,
instead of following the procedure set forth in Steps 1 and 2 of the
Article, may, within ten (10) days after the discharge in question,
file directly with the COMPANY, a written request for a hearing. Such
hearing shall be held within two (2) days after receipt by the COMPANY
of such written request. At such hearing, evidence may be presented on
behalf of the one discharged and by the COMPANY.
	 
	d)	 	If the evidence presented by the UNION to the COMPANY warrants the
reinstatement of the discharged employee or employees, such
reinstatement shall be to their former position without loss of
seniority or vacation credits. All other terms of the reinstatement
may be agreed upon between the COMPANY and the UNION at this time. If
the COMPANY and the UNION cannot agree that the discharge was
justified, the dispute may be referred to arbitration in accordance
with the procedure set forth below.
	 
	e)	 	If a grievance or discharge protest cannot be settled to the mutual
satisfaction of the COMPANY and UNION in Steps 1 through 3 or as
otherwise provided above, the UNION shall have forty-five (45) days
during which to notify the COMPANY of their desire to arbitrate the
dispute.
	 
	f)	 	Except where stated otherwise, all time limits noted in this
Article are exclusive of Saturdays, Sundays and holidays as listed in
Article 4, Sec. 3 (a). Extensions of time limits as set forth in this
Article, may be requested by either the COMPANY or the UNION to take
care of unusual cases.

-25-

 

	 	g) 	Whenever a supervisory employee places charges or letters of
reprimand on an employee’s record, a copy of such charges or letters
of reprimand must be furnished to such employee. Any charges or
letters of reprimand made against an employee may be referred by the
employee to the grievance procedure for handling if the employee feels
the charges or letters of reprimand are unfounded or not justified.
	 
	 	h) 	If an employee has gone a period of twenty-four (24) months without
receiving a letter of warning or reprimand, no letters issued to the
employee previously (except those which involved disciplinary
suspension) will be used for the purpose of further disciplinary
action. Disciplinary suspension will be limited to five (5) years for
the purpose of further disciplinary action.

ARTICLE 28

ARBITRATION PROCEDURE

	68	a) 	If a grievance has not been settled to the mutual satisfaction of
the COMPANY and UNION after completing Step 3 of the grievance
procedure provided above, the UNION shall have forty-five (45) days
during which to notify the COMPANY of their desire to arbitrate the
dispute. A panel of five (5) neutral arbitrators shall be requested
in writing from the Federal Mediation and Conciliation Service (FMCS),
a copy of such letter will be given to the other party. Upon receipt
of the panel of arbitrators, the parties shall alternately strike
same, with the first strike determined by flip of a coin.
	 
	 	b) 	Grievances appealed to arbitration but not scheduled for hearing
within 12 months of the appeal are considered to be dropped.
	 
	 	c) 	The COMPANY and the UNION shall bear the expenses of their
respective advocates. All other expenses of the arbitration shall be
borne by and divided equally between the UNION and the COMPANY.
	 
	 	d) 	The arbitrator selected shall have no power or authority to amend,
alter or modify this Agreement, including any appendices hereto, but
shall be limited to deciding whether or not a violation of its express
terms has been committed. The decision of the arbitrator shall be
final, conclusive and binding upon all employees, the UNION and the
COMPANY. The arbitrator shall have no power to establish wage scales,
rates for new jobs, or to change any wage. He shall have no power to
substitute his discretion for that of the COMPANY in cases where the
COMPANY has retained discretion or the right to act under this
Agreement. The arbitrator shall, in his decision, specify whether or
not the decision is retroactive or the effective date thereof.
	 
	 	e) 	Time limits: If the UNION or Grievant fails to observe the time
limits set forth in the Grievance or Arbitration Procedures, the
grievance shall be considered closed and no further proceeding thereon
shall lie. If the COMPANY fails to meet the time limits set forth,
the grievance may be appealed to the next step of the grievance or
arbitration procedures.

ARTICLE 29

ABROGATION OF CONTRACT ARTICLES

	69	 	Should any part hereof, or any provisions herein contained, be
rendered or declared invalid by reason of any existing or subsequently
enacted legislation or by a decree of a court of competent
jurisdiction, such invalidation of such part or portion of this
Agreement shall not invalidate the remaining portion hereof and they
shall remain in full force and effect.

-26-

 

ARTICLE 30

OCCUPATIONAL & NON-OCCUPATIONAL

ACCIDENT AND SICKNESS PLAN

	70	 	Section 1

	a)	 	This Benefit Plan is provided to aid employees in meeting their expenses while
suffering from an illness or accident in accordance with the following schedule:

	 	 	 
	 	 	Maximum Number
	Plant Service Credit
	 	of Weeks Benefit

	Six months to 1 year

	 	12 weeks
	Over 1 year

	 	26 weeks

	b)	 	Plant Service Credit shall mean employment with the COMPANY, which is credited to the
employee from the records of the COMPANY and shall start with the employee’s hiring date
with the COMPANY. No credit shall be given for absence due to leave of absence, layoff
or strikes.

	71	 	Section 2

	a)	 	Maximum Number of Weeks Benefits is determined by the employee’s Plant Service Credit,
and all disability periods occurring within the Plant Service Credit year will be totaled
for the purpose of computing the Maximum Benefits allowed for that year.
	 
	b)	 	Unused benefits during a Plant Service Credit year may not be carried over to the next
Plant Service Credit year.
	 
	c)	 	An employee whose continuous absence due to an illness or injury extends from one (1)
service year to another shall be entitled to a maximum of twenty-six (26) weeks benefits
for that disability. An employee whose continuous absence exceeds such Maximum Benefits
must return to work for a period of sixty (60) days for a related disability or one (1)
day for an unrelated disability in order to receive further benefits to which they may be
entitled. Total benefits will not exceed twenty-six (26) weeks in a Plant Service Credit
year.

	72	 	Section 3

	a)	 	The Plan provides benefits based on a normal workweek of forty (40) hours and a normal
day of eight (8) hours. In case the number of hours in the normal workweek or workday is
changed, the benefits listed below will be changed in direct proportion to the change in
the scheduled working hours.
	 
	b)	 	The benefits provided for herein shall be less any amount or amounts of disability
benefits which may be provided for through the State or Federal legislation, Workers
Compensation, or benefits provided in the Hourly Disability Benefit Plan.

	73	 	Section 4

	a)	 	This Benefit Plan will provide benefit payments based on the employee’s base hourly
rate, exclusive of all premium pay. Benefit payments will be made for an employee’s
disability for each scheduled workday up to the maximum number of weeks for which the
employee is eligible according to the schedule in Section 1.
	 
	b)	 	The COMPANY will provide benefits in an amount equal to 90% of an employee’s base
straight-time earnings for workdays lost due to non-occupational disability and up to
100% of an employee’s base straight-time earnings for workdays lost due to occupational
disability.
	 
	c)	 	An employee who has completed the probationary period but has less than six (6)
month’s service and

-27-

 

	 	 	otherwise is qualified for benefits from this Plan on a holiday will
be guaranteed up to eight (8) hours pay.

	74	 	Section 5

	a)	 	An employee must present evidence satisfactory to the COMPANY, showing that an absence
is due to illness or accident within the meaning of this Plan on forms provided by the
COMPANY.
	 
	b)	 	The employee, the doctor, or a member of the family must report an employee’s absence
to the Health Services Department by the third day of absence. Failure to comply will be
considered an absence without leave.
	 
	c)	 	Additionally, an employee’s occupational injury or illness must be reported to
supervision as soon as it becomes known to the employee or it will be considered a late
report and subject to disciplinary action.
	 
	d)	 	Employees must adopt such remedial measures as may be commensurate with their
disability and permit such reasonable examinations and inquiries by the COMPANY’S Health
Services Department representative as, in its judgment, may be necessary to ascertain the
employee’s condition.

	75	 	Section 6

	a)	 	Payments will not be made for:

	1)	 	Any period of disability during which the employee is not under treatment by a
licensed physician or a licensed chiropractor.
	 
	2)	 	Any disability caused directly or indirectly by war or riot.
	 
	3)	 	Any sickness or injury due to the employee’s

	i)	 	Willful intention to injure oneself or another;
	 
	ii)	 	Intoxication or the use of drugs except when in an EAP approved treatment program for
substance abuse.

	4)	 	Any disability occurring while the employee is working for wages or profit.
	 
	5)	 	Any disability due to misconduct.
	 
	6)	 	Any disability when an employee is absent because of layoffs, strikes, or leave of
absence or on vacation. Any employee who is injured or becomes sick during vacation and
is unable to return to work at the end of the vacation shall qualify for benefits in
accordance with the Plan.

	b)	 	All benefits under this plan shall cease immediately when employment with the COMPANY
is terminated for any reason.

	76	 	Section 7

	a)	 	The COMPANY reserves the right to withhold benefit payments to any employee who is
guilty of submitting a false claim or of abuse of the privileges covered and may take
disciplinary action including discharge.

	77	 	Section 8

	a)	 	Employees receiving sick benefits under this Article at the time a work stoppage
occurs will continue to be covered under this Article until certified able to return to
work. Employees whose illness or injury occurs after a work stoppage begins will not
receive benefits, as set forth in this Article, until the settlement of the work
stoppage.

-28-

 

	78	 	Section 9

	 	a) 	The COMPANY agrees that when an employee becomes ill or is injured while on vacation
and is certified as disabled by a licensed physician, they will be able to cancel
subsequent full weeks of vacation beyond the week in which they become certified as
disabled upon proper notification to the COMPANY.
	 
	 	b) 	The COMPANY agrees that if an employee is hospitalized while on vacation, the
employee’s vacation may be canceled and the employee placed on sick leave on the day of
hospitalization. For purposes of this paragraph, the day is defined as the payroll day
appropriate to the employee’s regular work schedule.

ARTICLE 31

WORK ASSIGNMENTS

	79	a) 	There is no jurisdiction. Work will be assigned on the basis of skill and ability
taking into account that the needed skills will be represented.
	 
	 	b) 	Bargaining Unit employees will not be required to train non-Sterling personnel.

ARTICLE 32

CONTRACT PERIOD

	80	a)  	This agreement shall become effective on the date of signing and shall remain in
effect until 4:00 p.m. on May 1, 2007, and the same shall automatically renew itself from
year to year thereafter unless either party shall have given the other written notice of
desired changes or termination at least sixty (60) days before the anniversary date.
	 
	 	b) 	This Agreement is in full settlement of all contractual issues in dispute between the
COMPANY and the UNION. The parties acknowledge that during the negotiations which
resulted in this Agreement, each had the unlimited right and opportunity to make demands
and proposals with respect to any subject or matter not removed by law from the area of
collective bargaining, and that the understanding and agreements arrived at by the
parties after the exercise of that right and opportunity are set forth in this Agreement.
	 
	 	c) 	The COMPANY and UNION also agree that any subsequent agreement reached within the
duration of this Agreement will be in compliance with applicable Federal laws,
regulations, guidelines and standards.
	 
	 	d) 	The UNION and Sterling agree that all pending and unsettled grievances will be subject
to the Grievance and Arbitration Process (including all timeliness and other defenses
permitted by the either the expired or new Agreement) and will not be affected in any way
by Article 32(b) of the Agreement. The parties further agree that all pending unfair
labor practice charges will not be affected in any way by Article 32(b) of the Agreement.
The parties further agree that the Return to Work agreement dated September 11, 2002
will not be rendered unenforceable by the terms of this Article.

-29-

 

	 	 	 
	81

	 	   Contract Period: May 27, 2004 to May 1, 2007
	 
	 	 
	

	 	   STERLING CHEMICALS, INC.
	 
	 	 
	

	 	

	

	 	   Plant Manager
	 
	 	 
	

	 	

	

	 	   Human Resources Manager
	 
	 	 
	

	 	   TEXAS CITY, TEXAS METAL TRADES COUNCIL AFL-CIO
	 
	 	 
	

	 	

	

	 	   President
	 
	 	 
	

	 	

	

	 	   Business Manager
	 
	 	 
	

	 	   Electrical Workers Local No. 527
	 
	 	 
	By
	 	 
	

	 	

	 
	 	 
	

	 	   Operating Engineers No. 347
	 
	 	 
	By
	 	 
	

	 	

	 
	 	 
	

	 	   Painters and Paperhangers No. 1008
	 
	 	 
	By
	 	 
	

	 	

	 
	 	 
	

	 	   Bridge, Structural, Ornamental & Reinforcing Iron Workers No. 135
	 
	 	 
	By
	 	 
	

	 	

	 
	 	 
	

	 	   International Association of Machinists No. 6
	 
	 	 
	By
	 	 
	

	 	

-30-

 

	 	 	 
	

	 	   Contract Period: May 27, 2004 to May 1, 2007
	 
	 	 
	

	 	   Sheet Metal Workers No. 54
	 
	 	 
	By
	 	 
	

	 	

	 
	 	 
	

	 	   Teamsters Local No. 968
	 
	 	 
	By
	 	 
	

	 	

	 
	 	 
	

	 	   Carpenters Local No. 973
	 
	 	 
	By
	 	 
	

	 	

	 
	 	 
	

	 	   International Brotherhood of Boilermakers, Iron Ship Builders,
Blacksmiths, Forgers and Helpers No. 132
	 
	 	 
	By
	 	 
	

	 	

	 
	 	 
	

	 	   Heat & Frost Insulators and Asbestos Workers No. 22
	 
	 	 
	By
	 	 
	

	 	

	 
	 	 
	

	 	   Pipefitters Local No. 211
	 
	 	 
	By
	 	 
	

	 	

	 
	 	 
	

	 	   Operating Engineers No. 450
	 
	 	 
	By
	 	 
	

	 	

-31-

 

EXHIBIT A

TWELVE-HOUR SHIFT AGREEMENT

A-i

 

 

EXHIBIT A

TWELVE-HOUR SHIFT AGREEMENT

This Agreement is applicable to Groups 1, 2, and 4 employees assigned to the 12H Shift Schedule (designated 12H). In addition, only those Articles, Appendices and Letters of Understanding
specifically cited herein are modified by this Agreement. Those provisions in the basic agreement not addressed here remain effective for all employees affected by this Agreement as well as all
other represented employees.

The COMPANY will not relinquish its rights to determine hours and schedules of work except as specifically limited in the Articles of Agreement. It is expressly provided, however, that the COMPANY
for legitimate business cause, may cause the discontinuance of the use of the 12H Shift with at least ninety (90) days notice of the effective date of such discontinuance.

Day Jobs

Straight day employment shall be determined on the basis of senior qualified.

Extra Operators

Employees in excess of the department’s minimum staffing needs may be defined as “extra”. Extra employees will not receive pay at time-and-one-half (1-1/2) premium for shift changes where notice
was received more than twenty-four (24) hours in advance of the start of the new shift.

Wages

The hourly wage rate of an employee assigned to the 12H Rotating Shift Schedule must be adjusted so as to provide the annual earnings under the 12H Shift arrangement which shall equal that which
the employee would have earned under the 8-Hour Rotating Schedule if he/she worked an equal number of hours.

This adjustment is necessary due to the requirement of paying overtime hours over eight (8) in a scheduled work day, and on holidays.

Under the 12H Schedule, an employee will work eight (8) hours at the straight time rate and four (4) hours at the time and one-half premium rate. To make the earnings for 12 hours of work equal
to that which the employee would have earned at the straight time rate, the eight-hour (regular negotiated) rate must be reduced by multiplying said rate by a factor of 0.8685, and then rounding
to the nearest penny.

The contractual wage rate of the various classifications affected by the 12H Shift arrangement shall, as applies to those regularly assigned to the 12H Schedule, be reduced by a factor of 0.8685.
Calculation of the 0.8685 factor and the application of the adjusted rate are attached at the end of this Exhibit. Premium pay practices for holidays and shift differential, and pay continuation
practice for vacation, jury duty, etc. are attached in order by Article and Section.

Employee Benefit Plans

The COMPANY will make SIP matching contributions for 12H shift employees in accordance with Exhibit D.

Life Insurance, and Disability Benefits will be calculated on 2080 annual hours at the unadjusted rate with no benefit payment difference for an 8-hour or 12H Shift employee with similar service
for the COMPANY.

Under the Pension Plan, the scheduled 104 hours of overtime in the 12 Hour Shift Schedule are applied in the calculation for bargaining unit average overtime.

Overtime

Operation on the 12H Shift (versus the 8 hour shift) prevents employees from covering a vacant shift by holding over one-half of the shift and by the next shift coming in early (total of 18
hours), or doubling over both shifts (total of 24 hours). Therefore, the majority of overtime will have to be covered by employees on the their days off.

The Overtime Agreement will be used throughout all the affected groups, including day workers in those areas where 12H Shift employees work

A-ii

 

 

EXHIBIT A

TWELVE-HOUR SHIFT AGREEMENT

Overtime coverage will be provided on a voluntary basis as described below until an overtime group fails to meet its commitment to staff its respective unit around-the-clock. If a voluntary
system fails to provide the necessary coverage, an alternate system will be initiated as required. A mandatory on-call system will be implemented if the voluntary system fails to produce the
number of people required for overtime coverage.

	•	 	The 12H Shift will make some changes necessary in the overtime procedures.
	 
	•	 	Normally, it will be necessary to cover vacant shift with persons on the off shifts.
	 
	•	 	Overtime procedures are included in the document for all affected groups.
	 
	•	 	The UNION agrees to a firm commitment to staff the plant.

As a general practice, overtime will be pre-scheduled however practical by scheduling the off shift for all known overtime before each shift’s days off. If there are no volunteers, the low person
will be forced to work overtime. The COMPANY will attempt up to twelve (12) hours before overtime is to begin to get the lower off shift person.

Employees who are forced out on overtime and work up to or into their regular shift, shall be excused from work on their regular shift without pay, once the employee has performed twelve (12)
hours of continuous work if the employee so requests.

It is recognized that with a 12 Hour Schedule, it is no longer possible for an employee to “hold over” one-half (1/2) the shift and another employee to come in early one-half (1/2) the shift
(total of 18 hours each), or “double over” (total of 24 hours). An employee cannot be forced to work more than sixteen (16) consecutive hours.

Operators who work 8-hour day shift schedules in the overtime group, will comply with this procedure on weekends and holidays.

When it is necessary to provide overtime coverage by calling in an employee, a change in the overtime procedure is necessary to ensure adequate staffing of the plant. A call-in list would provide
names of employees eligible to work the 12 hours (i.e., capable of working the full shift without interfering with their next scheduled shift). The employee with the lowest number of hours would
be contacted first, and on through the list.

An employee who accepts an overtime assignment, can later turn it down; however, he/she will still be required to work unless another qualified employee (not the standby or forced person)
volunteers to work. Volunteers will not be sought later than four (4) hours prior to the start of the shift.

When it is necessary to provide overtime coverage by calling in an employee, the following procedure shall be followed:

	1)	 	Call the low person off shift who is eligible to perform the job. The first person contacted by telephone may refuse the assignment, but if he/she refuses, he/she will be informed that he/she
is in the “forced” position. If subsequent calls to other persons fail to produce volunteers, then the “forced” persons will be required to report to work.
	 
	2)	 	If the list of low persons off shift fails to produce the staffing necessary, the following procedure shall be followed:

	a)	 	Force the on shift low person(s) on holdover for up to four (4) hours.
	 
	b)	 	Force out low person on-coming shift for up to four (4) hours.
	 
	c)	 	When necessary to do this, the middle four (4) hours will be covered as the COMPANY sees fit.
	 
	d)	 	This constitutes a breakdown in the voluntary system and may lead to the Mandatory Procedure.

	3)	 	In those situations where it is anticipated that the overtime required on a job shall not exceed eight (8) hours duration, the overtime will be offered to those employees present in the plant
or to the on-coming shift rather than calling out the off shift.

A-iii

 

 

EXHIBIT A

TWELVE-HOUR SHIFT AGREEMENT

Mandatory Overtime Procedure

Should the voluntary overtime system fail to provide coverage for overtime in an overtime area, the COMPANY will review the circumstances and decide if the voluntary system will continue to fail.
If so determined, then the following Mandatory Overtime Procedure and standby system will be initiated.

	1)	 	The primary shift (shift on short days off) and the secondary shift (shift on 8-day long change) will provide the needed personnel for standby. A volunteer list will be posted for employees
desiring to stand by for overtime on shift as they desire.
	 
	2)	 	The number of standby personnel will be determined by management, dependent on training, job flexibility and the number of jobs per overtime area, but will be kept to the minimum necessary.
Standby duties shall be rotated on an equitable basis among all employees of the overtime group and will be for the entire off period. It is preferred that different standby personnel be
scheduled for coverage of the day and night shift, of an off period. Standby lists will be posted prior to the beginning of the employee’s days off.
	 
	3)	 	The personnel on standby will not be scheduled for known overtime.
	 
	4)	 	It will be the responsibility of the person(s) on standby to be available by phone between 3:30 a.m. and 6:30 a.m. and/or 3:30 p.m. and 6:30 p.m. If the standby personnel are not at home, it
is their responsibility to let the appropriate on-duty person know where they can be reached. Standby personnel may, at the employee’s option, check out a pager prior to the start of their
standby period in order to facilitate communication. However, when pagers are unavailable, the standby employee will comply with the mandatory overtime procedure. The employee is responsible for
verifying that the pager is working.
	 
	5)	 	The person(s) on standby should be prepared to report to work by the beginning of the shift.

Charging of Overtime

An employee, who is contacted and refuses overtime, will be charged the total hours paid for such overtime.

ARTICLE 3

HOURS OF WORK

Section 1

Work day will be defined as a consecutive twenty-four (24) hour period beginning at 6:30 a.m.

12H Shift Workers

Twelve (12) consecutive hours of work per day shall constitute a days work. Day shift will be from 6:30 a.m. to 6:30 p.m. and night shift will be from 6:30 p.m. to 6:30 a.m. The payroll week for
employees on the 12H Shift starts at 6:30 p.m. Thursday, and runs until 6:30 p.m. the following Thursday. The payroll day starts at 6:30 p.m. and runs until 6:30 p.m. of the following day. Shift
workers are permitted sufficient time to eat during their shift without loss of pay for such period.

The 12H Shift Schedule will be as follows:

	 	 	 
	Four

	 	12-Hour Days
	Two Days Off
	Three

	 	12 Hour Nights
	Two Days Off
	Three

	 	12-Hour Days
	Two Days Off
	Four

	 	12-Hour Nights
	Eight

	 	Days Off

A-iv

 

 

EXHIBIT A

TWELVE-HOUR SHIFT AGREEMENT

ARTICLE 4

OVERTIME AND HOLIDAYS

Section 1

	a)	 	An employee shall be paid at the rate of one and one-half (1-1/2) times his adjusted rate for hours worked over eight (8) and up to twelve (12) and at a rate of one and one-half (1-1/2) times
his unadjusted rate for hours worked in excess of twelve (12) within a given twenty-four (24) hour payroll day.
	 
	b)	 	For 12H Shift Workers, time worked in excess of their weekly scheduled hours (36 or 48), shall be paid at the rate of one and one-half (1-1/2) times the unadjusted base rate of pay.

Section 3

Holiday and Holiday Pay

All holidays listed in the Articles of Agreement will be recognized. Holiday Pay provisions begin at 6:30 a.m. on the day of the holiday.
Employees assigned to the 12H Shift Schedule shall receive the following pay for holidays:

	1)	 	For holiday not worked: 8 hours times a premium factor of 1.151 times the adjusted hourly rate.
	 
	2)	 	For all regularly scheduled hours worked on a holiday: 2.879 times the employee’s adjusted hourly rate.

	a)	 	For holiday hours worked outside the regular schedule, when it occurs on the same shift as the last regularly scheduled shift worked: 1.5 times the unadjusted rate times hours worked
during the first 8 hours of the shift, plus 2.5 times the unadjusted rate times hours worked during the last four hours of the shift, plus Item No. 1 above.
	 
	b)	 	For holiday hours worked outside the regular schedule, when it occurs on the opposite shift as the last regularly scheduled shift worked: 2.5 times the unadjusted rate plus Item No. 1
above.

All other provisions in the Articles of Agreement concerning holidays and holiday pay shall continue to apply.

Section 5

Shift Differential

For employees assigned to the 12H Shift, the contractual rate of shift differential will be amended to provide:

	•	 	6:30 a.m. to 6:30 p.m. — no differential

	•	 	6:30 p.m. to 6:30 a.m. — $1.00 differential (adjusted where applicable — 87.7 cents)

Employees assigned to the 12H Shift Schedule shall receive the following shift differential pay for holidays and when working outside the regular 12H Schedule:

	•	 	For regularly scheduled hours worked on the night shift of a holiday: 2.879 times the adjusted shift differential rate of 87.7 cents.

	•	 	For hours worked on the night shift outside the schedule on a holiday: 2.5 times the contractual rate of $1.00.

	•	 	For all hours worked on the night shift outside the regular schedule, excluding holidays: 1.5 times $1.00.

	•	 	For holidays not worked: No shift differential.

A-v

 

 

EXHIBIT A

TWELVE-HOUR SHIFT AGREEMENT

	•	 	For the night shift of the last scheduled day of rest worked (if all days of rest worked): 2.0 times $1.00.

ARTICLE 5

VACATION

The vacation policy will allow 8-hours excused absence to be taken during a 48-hour work week in conjunction with 40 hours vacation to fill out the period between days off.

Remnant hours (4 or 8 hours remaining at the end of the vacation year) may be used, at the employee’s discretion as follows:

	a)	 	Take off with pay in conjunction with time off without pay, totaling 12 hours. This does not constitute an additional bank day.
	 
	b)	 	Take pay in lieu of vacation (at the adjusted hourly rate).
	 
	c)	 	A twelve (12) hour shift employee may opt to work his/her shift and take remnant hours (four (4) or eight (8) hours) at the beginning or end of their respective shift. This must be scheduled
in advance to allow for proper coverage of the shift. This does not constitute an additional bank day.
	 
	d)	 	When it becomes known in advance that an employee has remnant vacation hours he/she may request to schedule these prior to the end of the vacation year, but only if all other vacation has been
used.

Section b)

The vacation pay, for employees entitled to vacation, is computed on the basis of eight (8) hours times the adjusted hourly rate plus four (4) hours at time and one-half the adjusted hourly rate
for each twelve-hour shift taken as vacation.

Section e)

An employee may place up to six (6) shifts (72 hours) of their vacation in a vacation bank prior to January 1 with such days to be taken at any time during the vacation year when requested by the
employee. Three (3) bank days (36 hours) may be taken with one (1) hours notice. Thirty (30) hours notice for the other three (3) bank days (36) hours will be required except in cases of
emergencies.

An employee will be allowed to convert one (1) 12 H bank day to three (3) four hour bank days to be taken at the beginning or end of a shift, within a vacation year. All three (3) four hour bank
days must be used or lost. They cannot be treated as remnants. These bank days must be scheduled with thirty (30) hours notice and supervisor approval. No overtime meals will be granted for
employees covering four hour bank days.

The employee exercising the four hour bank day will be responsible for finding coverage for the opening within the overtime guidelines.

This will be implemented for a one (1) year trial period and after that year will be continued with agreement between the UNION and the COMPANY.

An employee is entitled to one split for each forty (40) hours of vacation earned.

Section m)

When a holiday is observed on an employee’s scheduled vacation day, they will have the option of an extra day vacation or eight (8) hours pay at 1.151 times the adjusted hourly rate.

A-vi

 

 

EXHIBIT A

TWELVE-HOUR SHIFT AGREEMENT

ARTICLE 6

SENIORITY

Section 9

Job Bidding Procedure

Job Posting: The job vacancy will be posted for eleven (11) calendar days at each of the main gates and on departmental bulletin boards within the plant.

ARTICLE 16

JURY SERVICE

Employees on the day shift (6:30 a.m. to 6:30 p.m.) are not required to report back to work if dismissed from court duty at or after 12:30 p.m. Employees dismissed before 12:30 p.m. are required
to report for work and complete the work day. COMPANY has the option to utilize the overtime replacement or to send them home. Employees on the night shift (6:30 p.m. to 6:30 a.m.) are not
required to report for work if jury service commences less than eight (8) hours from the end of the last shift, or if jury service is terminated less than eight (8) hours before the beginning of
the next shift.

Jury duty pay for hours excused as provided above shall be: first eight (8) hours of a shift excused shall be at the adjusted rate and all hours excused after eight (8) hours shall be at one and
one-half (1-1/2) times the adjusted rate.

ARTICLE 25

FUNERAL LEAVE

Employees will be given up to three (3) consecutive 12-hour days off, one (1) of which must be the day of the funeral. Employees will be paid for funeral leave days at eight (8) hours times the
adjusted hourly rate plus four (4) hours at time and one-half (1-1/2) the adjusted hourly rate.

ARTICLE 30

OCCUPATIONAL & NON-OCCUPATIONAL

ACCIDENT AND SICKNESS PLAN

Section 4

The plan will provide benefit payments for 12H Shift employees, based on the unadjusted hourly rate, exclusive of all premium pay, times 0.9524.

The COMPANY will provide benefits to a 12H Shift employee in an amount to equal 90% of the employee’s adjusted base earnings for work time lost due to non-occupational disability. The adjusted
base will be calculated by multiplying 0.9524 times the unadjusted hourly rate times the hours lost. The benefits for occupational disability will be equal to 100% of the employee’s adjusted base
earnings for work time lost.

WAGE ADJUSTMENT

Wage Adjustment

The intent of wage adjustment is to adjust hourly wage rate and shift differential so the 12H schedule can be paid within contractual premium agreements and:

	1)	 	Cause the employee no loss of earnings.
	 
	2)	 	Pay the employee at least a 1.5 premium for the additional 104 hours per year in the 12H schedule versus the existing 8-hour schedule, and
	 
	3	 	Keep the total cost of the 12H schedule at approximately the same cost of the 8-hour schedule.

A-vii

 

 

EXHIBIT A

TWELVE-HOUR SHIFT AGREEMENT

Hours Worked and Paid Under 8-Hour and 12-Hour Shift Schedule

Presently, shift employees are scheduled to work an average of 2080 hours per year. With a 12H shift, employees will be scheduled to work an average of 2,184 hours per year. Therefore, pay
practices for the 12H shift must be calculated as if the employee were working an additional 104 hours at least a 1.5 premium.

	A)	 	Average annual earnings on the present 8-hour schedule, based on 2080 hours worked.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Hours	 	Premium	 	Hours
	Type
	 	Worked
	 	Factor
	 	Paid

	Total S/T Worked (excl. holidays)
	 	 	2,017.1	 	 	 	1.0	 	 	 	2,017.1	 
	Scheduled Holiday (Avg. = 7.86 days)
	 	 	62.9	 	 	 	2.5	 	 	 	157.1	 
	Holiday Off Hours (Avg. = 3.14 days)
	 	 	(25.1	)	 	 	1.0	 	 	 	25.1	 
	 
	 	 	
 	 	 	 	 	 	 	 	
 	 
	 
	 	 	2,080.0	 	 	 	 	 	 	 	2,199.3	 

	 	 	Earnings = 2,199.3 ($16.73) = $36,794.29

	B)	 	Average annual earnings under an 8-hour, 2,184-hour schedule:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Hours	 	Premium	 	Hours
	Type
	 	Worked
	 	Factor
	 	Paid

	Total S/T Worked (excl. holidays)
	 	 	2,017.1	 	 	 	1.0	 	 	 	2,017.1	 
	Additional hours at 1.5 premium
	 	 	100.9	 	 	 	1.5	 	 	 	151.4	 
	Scheduled Holiday (Avg. = 8.25 days)
(includes 3.1 additional hours)
	 	 	66.0	 	 	 	2.5	 	 	 	165.0	 
	Holiday Off Hours (Avg. = 2.75 days)
	 	 	(22.0	)	 	 	1.0	 	 	 	22.0	 
	 
	 	 	
 	 	 	 	 	 	 	 	
 	 
	 
	 	 	2,184.0	 	 	 	 	 	 	 	2,355.5	 

	 	 	Earnings = 2,355.5 ($16.73) = $39,407.52

	C)	 	Average annual earnings under the 12H, 2,184-hour schedule:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Hours	 	Premium	 	Hours
	Type
	 	Worked
	 	Factor
	 	Paid

	Scheduled S/T (excl. holidays)
	 	 	1,412	 	 	 	1.0	 	 	 	1,412.0	 
	Scheduled O/T (excl. holidays)
	 	 	706	 	 	 	1.5	 	 	 	1,059.0	 
	Holiday Hours (Avg. 5.5 days)
	 	 	66	 	 	 	2.879	 	 	 	190.0	 
	Holiday Off Hours (Avg. 5.5 days)
	 	 	(44	)	 	 	1.151	 	 	 	50.6	 
	 
	 	 	
 	 	 	 	 	 	 	 	
 	 
	 
	 	 	2,184	 	 	 	 	 	 	 	2,711.6	 

	 	 	Annual earnings are the same as in Case B = $39,407.52

	 	 	 	 	 	 	 	 	 
	Wage Rate

	 	=
	 	$39,407.52
	 	=
	 	$14.53
	
	 	 	 	
 	 	 	 	 
	
	 	 	 	2,711.6	 	 	 	 

	 	 	Ratio of 12H rate to 8-hour rate =

	 	 	 	 	 	 	 	 	 	 	 
	$16.73
	 	=
	 	1.151
	 	$14.53
	 	=
	 	0.8685
	
 
	 	 	 	 	 	
 	 	 	 	 
	$14.53
	 	 	 	 	 	$16.73	 	 	 	 

	 	 	Earnings 2,711.6 ($14.53) = $39,399.55

A-viii

 

 

EXHIBIT A
TWELVE-HOUR
SHIFT AGREEMENT

Shift Differential

Currently, shift employees
receive shift differential for working
the evening and midnight shifts. When premium rates apply to
hours worked, the same premium is applied to shift differential.

Under the 12H shift, shift differential will be paid for
the night shift only, therefore, the rate must be adjusted to
keep annual earnings the same. Shift differential will continue to be
increased by premium rates, and will continue to be paid only for hours worked.

	 	A)	 	Average Annual Shift Differential under the present 8-hour schedule, based on 2,080 hours worked:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Hours	 	Premium	 	Hours	 	 	 	 
	Type
	 	Worked
	 	Factor
	 	Paid
	 	Rate
	 	Earnings

	Eve Shift (excl. holidays)
	 	 	672.4	 	 	 	1.0	 	 	 	672.4	 	 	$	0.50	 	 	$	336.20	 
	Mid Shift (excl. holidays)
	 	 	672.4	 	 	 	1.0	 	 	 	672.4	 	 	$	1.00	 	 	$	672.40	 
	Holiday Eve Shift
	 	 	21.0	 	 	 	2.5	 	 	 	52.5	 	 	$	0.50	 	 	$	26.25	 
	Holiday Mid Shift
	 	 	21.0	 	 	 	2.5	 	 	 	52.5	 	 	$	l.00	 	 	$	52.50	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	1,087.35	 

	 	B)	 	Average Annual Earnings on the present 8-hour schedule, based on 2,184 hours worked:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Hours	 	Premium	 	Hours	 	 	 	 
	Type
	 	Worked
	 	Factor
	 	Paid
	 	Rate
	 	Earnings

	Eve Shift S/T (excl. holidays)
	 	 	672.4	 	 	 	1.0	 	 	 	672.4	 	 	$	0.50	 	 	$	336.20	 
	Eve Shift O/T (excl. holidays)
	 	 	33.6	 	 	 	1.5	 	 	 	50.4	 	 	$	0.50	 	 	$	25.20	 
	Mid Shift S/T (excl. holidays)
	 	 	672.4	 	 	 	1.0	 	 	 	672.4	 	 	$	1.00	 	 	$	672.40	 
	Mid Shift O/T (excl. holidays)
	 	 	33.6	 	 	 	1.5	 	 	 	50.4	 	 	$	1.00	 	 	$	50.40	 
	Holiday Eve Shift
	 	 	22.0	 	 	 	2.5	 	 	 	55.0	 	 	$	0.50	 	 	$	27.50	 
	Holiday Mid Shift
	 	 	22.0	 	 	 	2.5	 	 	 	55.0	 	 	$	l.00	 	 	$	55.00	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	1,166.70	 

	 	C)	 	Average Annual Shift Differential on the 12H shift schedule, based on 2,184 hours worked:
	 
	 	 	 	The 12H shift differential rate (unadjusted) is calculated as follows:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	8-Hour Schedule
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	12H Scheduled

	Days
	 	$0.00/hr. * 8	 	 	=	 	 	$	0.00	 	 	Days	 	 	—	 	 	No differential
	Eves.
	 	$0.50/hr. * 8	 	 	=	 	 	$	4.00	 	 	Nights	 	 	—	 	 	$12.12 hr. = $1.00/hr
	Mid
	 	$1.00/hr. * 8	 	 	=	 	 	$	8.00	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	$	12.00/day	 	 	 	 	 	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Hours	 	Premium	 	Hours	 	 	 	 
	Type
	 	Worked
	 	Factor
	 	Paid
	 	Rate
	 	Earnings

	S/T Night Shift (excl. holidays)
	 	 	706	 	 	 	1.0	 	 	 	706.0	 	 	$	1.00	 	 	$	706.00	 
	O/T Night Shift (excl. holidays)
	 	 	353	 	 	 	1.5	 	 	 	529.5	 	 	$	1.00	 	 	$	529.50	 
	Holiday Night Shift
	 	 	33	 	 	 	2.879	 	 	 	95.0	 	 	$	1.00	 	 	$	95.00	 
	 
	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	
 	 
	 
	 	 	 	 	 	 	 	 	 	 	1,330.5	 	 	 	 	 	 	$	1,330.50	 

A-ix

 

 

EXHIBIT A

TWELVE-HOUR SHIFT AGREEMENT

          Therefore, the negotiated shift differential must be adjusted by:

	 	 	 	 	 	 	 
	 
	 	$1,166.70	 	=	 	0.877
	 
	 	
 	 	 	 	 
	 
	 	$1,330.50	 	 	 	 

          to keep annual earnings the same.

          Annual Earnings = $1,330.5 (0.877) $1,166.85

Summary — Combined Annual Earnings

	 	 	 	 	 	 	 	 	 
	 	A	)	 	Under present 8-Hour (2,080 hours) schedule:
	 	 	 	 
	 	 	 	 	Straight Time, O/T & Holiday Wages
	 	$	36,794.29	 
	 	 	 	 	Shift Differential
	 	 	1,087.35	 
	 	 	 	 	 
	 	 	
 	 
	 	 	 	 	 
	 	$	37,881.64	 
	 	B	)	 	Under an 8-hour (2,184 hours) schedule:
	 	 	 	 
	 	 	 	 	S/T, O/T & Holiday Wages
	 	$	39,407.52	 
	 	 	 	 	Shift Differential
	 	 	1,166.70	 
	 	 	 	 	 
	 	 	
 	 
	 	 	 	 	 
	 	$	40,574.22	 
	 	C	)	 	Under the 12H (2,184 hours) schedule:
	 	 	 	 
	 	 	 	 	S/T, O/T & Holiday Wages
	 	$	39,399.55	 
	 	 	 	 	Shift Differential
	 	 	1,166.85	 
	 	 	 	 	 
	 	 	
 	 
	 	 	 	 	 
	 	$	40,566.40	 

Pay Rates

Premiums under the 12-hour schedule will be as follows:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	A)	 	Straight time hours as part
	 	1.0	 	x	 	12 hour base	 	 	 	 	 	 
	 	 	of the regular schedule
	 	1.0	 	x	 	$14.53	 	=	 	$	14.53	 
	B)	 	Overtime hours as part
	 	1.5	 	x	 	12 hour base	 	 	 	 	 	 
	 	 	of the regular schedule
	 	1.5	 	x	 	$14.53	 	=	 	$	21.80	 
	C)	 	Hours worked beyond 12.
	 	1.5	 	x	 	$16.73	 	=	 	$	25.10	 
	 	 	or
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Hours worked outside regular schedule.
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	or
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Hours worked for schedule change
outside contract notice.
	 	 	 	 	 	 	 	 	 	 	 	 
	D)	 	Hours worked on last schedule day of
	 	2.0	 	x	 	$16.73	 	=	 	$	33.46	 
	 	 	rest (if all days of rest worked that
week).
	 	 	 	 	 	 	 	 	 	 	 	 
	E)	 	Hours worked on scheduled
	 	2.879	 	x	 	12 hour base	 	 	 	 	 	 
	 	 	holiday up to 12 hours.
	 	2.879	 	x	 	$14.53	 	=	 	$	41.83	 
	F)	 	Hours worked on holiday outside
	 	2.5	 	x	 	$16.73	 	=	 	$	41.83	 
	 	 	regular schedule
	 	 	 	 	 	 	 	 	 	 	 	 
	G)	 	Vacation Pay, Jury Duty,
	 	8 Hrs.	 	x	 	12-Hour base	 	 	 	 	 	 
	 	 	Funeral Pay, etc.
	 	+ 4 Hrs.	 	x	 	1.5 x 12-Hour base	 	 	 	 	 	 
	H)	 	Holiday not worked (8 hours)
	 	1.151	 	x	 	$14.53	 	=	 	$	16.72	 

A-x

 

 

EXHIBIT A

TWELVE-HOUR SHIFT AGREEMENT

EXAMPLE OF SICKNESS PLAN CALCULATIONS

	 	 	 	 	 	 	 	 	 
	Basis: 2-Week Sickness
	 	 	 	 	 	 	 	 
	Ratio of 8-Hour to 12-Hour Schedules
	 	 	 	 	 	 	 	 
	80-Hours/2
Weeks
	 	 	=	 	 	 	0.9524	 
	84-Hours/2 Weeks
	 	 	 	 	 	 	 	 
	40-Hour Weeks — Current Schedule
	 	 	 	 	 	 	 	 
	40 x 2 x $16.73 x 0.90
	 	 	=	 	 	$	1,204.56	 
	36/48-Hour Weeks - 12H Schedule
	 	 	 	 	 	 	 	 
	(36 + 48) x $16.73 x 0.9524 x 0.90
	 	 	=	 	 	$	1,204.58	 
	 
	 	 	 	 	 	 	
 	 
	Difference
	 	 	=	 	 	$	0.02	 
	 
	 	 	 	 	 	 	
 	 

A-xi

 

 

EXHIBIT A

TWELVE-HOUR SHIFT AGREEMENT

January 31, 1991

Interpretation of Attachment E

12 Hour Shift, Operations Overtime Agreement

Page 20 applies to scheduled overtime, and

Page 21 applies to call-out overtime

SCHEDULED OVERTIME, Attachment E Page 20

It is our intent to inform people, by their last work day, of any scheduled
overtime needs known to exist during their off days. Adequate notice should be
provided when scheduled overtime wants to be turned down so that coverage can
be arranged no later than 12 hours prior to the start of the overtime period.
If no replacement can be arranged, the employee remains scheduled for the
overtime assignment.

CALL-OUT OVERTIME, Attachment E Page 21

It is our intent to arrange for overtime coverage as far in advance as
possible, once a need has been identified. Less than a 4-hour notice should be
necessary only when short notice illness, emergency, or 1-hour day bank day
requests are received. Therefore, a crew on off days will be contacted as soon
as possible once a vacancy exists. Each department can determine an
appropriate method to contact people for overtime coverage.

If a person accepts a call-out overtime assignment, he can later turn it down,
if coverage can be arranged no later than 4 hours prior to the start of the
overtime period.

	 	 	 
	      /s/ P. J. Pollock

	 	/s/ Wayne R. Parker
	
 

	 	
 
	FOR THE UNION

	 	FOR THE COMPANY
	 
	 	 
	      6/2/93

	 	      6/2/93
	
 

	 	
 
	DATE

	 	DATE

A-xiii

 

 

EXHIBIT B

WAGE RATES

Top Rates

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	1	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Ratification	 	 	 	 	 	2	 	 	 	 	 	3
	 	 	 	 	 	 	Date
	 	 	 	 	 	05/01/05
	 	 	 	 	 	05/01/06

	Instrument &
Electrical
	 	 	3.0	%	 	$	26.22	 	 	 	3.0	%	 	$	27.01	 	 	 	3.0	%	 	$	27.82	 
	Machinist
	 	 	2.5	%	 	$	26.01	 	 	 	3.0	%	 	$	26.79	 	 	 	3.0	%	 	$	27.60	 
	Boilermaker
	 	Freeze	 	$	24.52	 	 	 	0.0	%	 	$	24.52	 	 	 	0.0	%	 	$	24.52	 
	Pipefitter
	 	Freeze	 	$	24.52	 	 	 	0.0	%	 	$	24.52	 	 	 	0.0	%	 	$	24.52	 
	Operating Engineer
	 	Freeze	 	$	24.52	 	 	 	0.0	%	 	$	24.52	 	 	 	0.0	%	 	$	24.52	 
	General Mechanic
	 	Freeze	 	$	24.52	 	 	 	0.0	%	 	$	24.52	 	 	 	0.0	%	 	$	24.52	 
	Lab Analyst
	 	Freeze	 	$	24.52	 	 	 	0.0	%	 	$	24.52	 	 	 	0.0	%	 	$	24.52	 
	Outside Operator
	 	Freeze	 	$	24.52	 	 	 	3.0	%	 	$	25.26	 	 	 	3.0	%	 	$	26.01	 
	Pumper Gauger
	 	Freeze	 	$	24.52	 	 	 	0.0	%	 	$	24.52	 	 	 	0.0	%	 	$	24.52	 

Note:

The Company will allow a voluntary severance payout in accordance with Article
19 for employees in the following crafts: Boilermaker, Pipefitter, Operating
Engineer, Carpenter, Painter, Insulator and Laborer. Employees wishing to opt
for the voluntary severance must submit to the Company, in writing, a letter of
resignation no later than 12/31/04.

A lump sum of $1000 (gross pay) will be paid within 30 days of ratification of
this agreement to all employees who are frozen in year 1.

New Hire Progressions*

		
	     * Note: 	The COMPANY will determine the appropriate starting point within the related progression
for each new hire based on the individual’s experience level and education.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Ratification	 	 	 	 
	 	 	Date
	 	05/01/05
	 	05/01/06

	Outside Operator:
	 	 	 	 	 	 	 	 	 	 	 	 
	Start
	 	 	17.16	 	 	 	17.68	 	 	 	18.21	 
	End of 12 Months
	 	 	19.62	 	 	 	20.20	 	 	 	20.81	 
	End of 24 Months
	 	 	22.07	 	 	 	22.73	 	 	 	23.41	 
	End of 36 Months

(Journeyman Rate)
	 	 	24.52	 	 	 	25.26	 	 	 	26.01	 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Ratification	 	 	 	 
	 	 	Date
	 	05/01/05
	 	05/01/06

	Pumper Gauger:
	 	 	 	 	 	 	 	 	 	 	 	 
	Start
	 	 	17.16	 	 	 	17.16	 	 	 	17.16	 
	End of 12 Months
	 	 	19.62	 	 	 	19.62	 	 	 	19.62	 
	End of 24 Months
	 	 	22.07	 	 	 	22.07	 	 	 	22.07	 
	End of 36 Months

(Journeyman Rate)
	 	 	24.52	 	 	 	24.52	 	 	 	24.52	 

B-i

 

 

EXHIBIT B

WAGE RATES

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Ratification	 	 	 	 
	 	 	Date
	 	05/01/05
	 	05/01/06

	Lab Analyst:
	 	 	 	 	 	 	 	 	 	 	 	 
	Start
	 	 	17.16	 	 	 	17.16	 	 	 	17.16	 
	End of 12 Months
	 	 	19.62	 	 	 	19.62	 	 	 	19.62	 
	End of 24 Months
	 	 	22.07	 	 	 	22.07	 	 	 	22.07	 
	End of 36 Months

(Journeyman Rate)
	 	 	24.52	 	 	 	24.52	 	 	 	24.52	 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Ratification	 	 	 	 
	 	 	Date
	 	05/01/05
	 	05/01/06

	Machinist:
	 	 	 	 	 	 	 	 	 	 	 	 
	Start
	 	 	18.21	 	 	 	18.76	 	 	 	19.32	 
	End of 12 Months
	 	 	20.16	 	 	 	20.77	 	 	 	21.39	 
	End of 24 Months
	 	 	22.11	 	 	 	22.78	 	 	 	23.46	 
	End of 36 Months
	 	 	24.06	 	 	 	24.79	 	 	 	25.53	 
	End of 48 Months

(Journeyman Rate)
	 	 	26.01	 	 	 	26.79	 	 	 	27.60	 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Ratification	 	 	 	 
	 	 	Date
	 	05/01/05
	 	05/01/06

	Instrument & Electrical:
	 	 	 	 	 	 	 	 	 	 	 	 
	Start
	 	 	18.36	 	 	 	18.91	 	 	 	19.47	 
	End of 12 Months
	 	 	19.93	 	 	 	20.53	 	 	 	21.14	 
	End of 24 Months
	 	 	21.50	 	 	 	22.15	 	 	 	22.81	 
	End of 36 Months
	 	 	23.08	 	 	 	23.77	 	 	 	24.48	 
	End of 48 Months
	 	 	24.65	 	 	 	25.39	 	 	 	26.15	 
	End of 60 Months

(Journeyman Rate)
	 	 	26.22	 	 	 	27.01	 	 	 	27.82	 

B-ii

 

 

EXHIBIT C

EMPLOYEE BENEFITS

Except as modified below, the COMPANY agrees to continue to provide employee
benefits under the plans listed below as in effect on April 1, 2002. These
benefits will last for the duration of this agreement and will be subject to
change as negotiated in future contracts.

      Sterling Chemicals, Inc. Medical Benefits Plan for Hourly-Paid Employees
     
Sterling Chemicals, Inc. Prescription Drug Benefits Plan for Hourly-Paid Employees
     
Sterling Chemicals, Inc. Dental Assistance Plan for Hourly-Paid Employees
     
Sterling Chemicals, Inc. Hourly Employees’ Flexible Spending Account Plan
     
Sterling Chemicals, Inc. Disability Benefits Plan for Hourly-Paid Employees
     
Sterling Chemicals, Inc. Group Life Insurance Plan for Hourly-Paid Employees
     
Sterling Chemicals, Inc. Hourly-Paid Employees’ Pension Plan
     
Sterling Chemicals, Inc. Savings and Investment Plan

Nothing in this Agreement shall restrict the COMPANY from changing the language
in the official plan documents or changing the providers of plan benefits as
long as the benefits provided are not changed (unless required by law.)

Savings and Investment Plan (SIP): The COMPANY will provide matching
contributions equal to 50% of the first 7% of contributions made on base pay.
Effective October 1, 2002, installment payments will no longer be available.
As soon as administratively feasible after contract ratification, three
withdrawals per year will be allowed for all participants. Fees for SIP loans
will be paid by the individual participant. Employees who are not eligible to
participate in the Hourly Paid Employees’ Pension Plan because they were hired
(or rehired) on or after the effective date of this Agreement will be eligible
for a matching contribution equal to 100% of the first 6% of contributions made
on base pay. This match is in lieu of the “regular” match (50% of 7%) and is
not in addition to it.

Hourly Paid Employees’ Pension Plan: The maximum pension factor is $60.
Employees hired on or after the effective date of this Agreement will not be
eligible to participate in the Hourly Paid Employees’ Pension Plan (or any
other defined benefit pension plan sponsored by the COMPANY). Employees
rehired on or after the effective date of this Agreement who were participants
in the Hourly Paid Employees’ Pension Plan during a prior period of employment
with the COMPANY will not be reinstated in the plan.

Life Insurance and Accidental Death & Dismemberment Insurance (AD&D) Benefits:
The COMPANY will not provide retiree life insurance benefits. Effective the
first of the month following return to work, the COMPANY agrees to provide
$75,000 of AD&D insurance to all active employees.

Dental Premiums: Employee dental premiums will be increased 5% on every January
1st beginning in 2007 through the expiration of this contract. After-tax
payment of premiums is not allowed.

Medical Premiums: Effective January 1, 2005, active employee medical premiums
will equal 20% of projected expenses and be based on the medical claims,
prescription drug claims and stop-loss insurance premiums attributable to
participants in the active medical plan. After-tax payment of premiums is not
allowed.

PPO Medical Plan: (1) Change coordination of benefits from standard to
carve-out. This means that in situations where the Sterling Medical Plan is
secondary, total benefits from both plans will be limited to the amount the
Sterling Medical Plan would have paid had it been primary. (2) The COMPANY
will increase the hearing aid maximum from $500 to $750. (3) Effective January
1, 2003, the COMPANY agrees to increase the lifetime medical maximum from
$1,000,000 to $1,500,000 per participant. Notwithstanding the foregoing, any
medical plan participant who has already received $1,000,000 in medical
benefits prior to January 1, 2003, will not be eligible for these additional
benefits. Additionally, any participant for whom the COMPANY is unable to
obtain stop loss insurance coverage from the low cost stop loss insurance
provider without additional cost will not be eligible for these additional
benefits.

HMO Medical Plan: The COMPANY shall make available an HMO for employees.
Employee premiums shall equal 15% of the billed cost to the COMPANY by the HMO.
If the COMPANY should decide to provide HMO benefits on a self-insured basis
at a later date, the COMPANY agrees to use a similar methodology to calculate
HMO employee premiums as is used for the PPO plan.

C-i

 

 

EXHIBIT C

EMPLOYEE BENEFITS

Prescription Drugs: The prescription drug co-pay for current employees and
employees who retire during the term of this agreement will be 10% on generic
drugs and 20% on brand name drugs.

Disability Insurance: Disability income benefits for psychiatric and substance
abuse claims will not be payable beyond 30 months from the initial date of
disability.

Retiree Medical Benefits (including prescription drug coverage): Current
employees who retire after this agreement is ratified (“Future Retirees”) and
who at retirement are at least age 55 and who have at least 10 years of Vesting
Service (as defined in the Hourly Paid Employees’ Pension Plan), will be
eligible to participate in the Sterling Chemicals, Inc. Medical Benefits Plan
for Retirees and the Sterling Chemicals, Inc. Prescription Drug Benefits Plan
for Retirees (collectively the “Retiree Medical Plan”.) Medical premiums for
Future Retirees will equal 50% of projected expenses and be based upon the
medical claims, prescription drug claims and stop-loss insurance premiums
attributable to participants in the Retiree Medical Plan. This exception to
the reservation of rights provisions of the Sterling Chemicals, Inc. Medical
Benefits Plan for Retirees and the Sterling Chemicals, Inc. Prescription Drug
Benefits Plan for Retirees will last only for the duration of this agreement
and will be subject to change as negotiated between the UNION and the COMPANY
in future agreements or otherwise as permitted by this agreement or by law.

Effective January 1, 2005, the COMPANY’S contributions towards the cost
of retiree medical will be as follows:

	 	 	 	 	 
	Retiree and spouse both under age 65
	 	 	 	 
	Retiree only
	 	 	261.76	 
	Retiree plus spouse
	 	 	575.86	 
	Retiree plus child(ren)
	 	 	471.16	 
	Retiree plus family
	 	 	785.26	 
	Retiree and spouse both equal to or over age 65
	 	 	 	 
	Retiree only
	 	 	87.25	 
	Retiree plus spouse
	 	 	191.95	 
	Retiree plus child(ren)
	 	 	296.66	 
	Retiree plus family
	 	 	401.36	 
	Retiree or spouse under age 65, other one equal to or over age 65
	 	 	 	 
	Retiree plus spouse
	 	 	349.01	 
	Retiree plus family
	 	 	558.41	 

The COMPANY shall have the right to modify the prescription drug benefits
to take full advantage of the prescription drug provisions of Medicare.
The COMPANY shall be solely responsible for deciding whether, when and
how any changes to prescription drug coverage will take effect.

Employees hired (or rehired) on or after the effective date of this
agreement will not be eligible to participate in the Retiree Medical
Plan.

Voluntary Employee Benefit Association (VEBA): The COMPANY has the right to
use, in accordance with the terms of the VEBA, all of the funds in the VEBA to
pay medical and prescription drug claims as such claims are presented to the
COMPANY for payment without maintaining any minimum balance in the VEBA. If
all of the funds in the VEBA are used to pay such claims, the COMPANY shall not
be under any obligation to contribute additional funds to, or otherwise
continue the existence of, the VEBA.

Disclaimer as to Current Retirees: Except for the foregoing provision
regarding the use of VEBA funds, nothing contained in this Exhibit D (or the
new collective bargaining agreement of which it is a part) shall apply to
persons who retired before the new agreement was ratified. Any prior
contractual commitments, in prior collective bargaining agreements or
otherwise, creating exceptions to the Sterling Chemicals, Inc. Medical Benefits
Plan for Retirees or the Sterling Chemicals, Inc. Prescription Drug Benefits
Plan for Retirees, including but not limited to,

C-ii

 

 

EXHIBIT C

EMPLOYEE BENEFITS

medical premium contribution percentages for any individual who retired prior
to the ratification of this agreement, have expired and are not renewed by this
agreement. The COMPANY retains the right to modify, amend, or terminate the
Sterling Chemicals, Inc. Medical Benefits Plan for Retirees and the Sterling
Chemicals, Inc. Prescription Drug Benefits Plan for Retirees as provided in the
summary plan description and other plan documents.

C-iii

 

 

NO JURISDICTION

SUPPORTING INFORMATION

	1.	 	Operators perform CLAIR, TPM, and minor maintenance.
	 
	 	 	Examples:

	 	•	 	help Machinist pull and install pump
	 
	 	•	 	pull small pump and decontaminate
	 
	 	•	 	pull small control valve up to level of skill and ability
	 
	 	•	 	install and pull blinds for product changeover and to prepare equipment (small number of blinds)

	2.	 	Maintenance planners plan total hours to perform job.
	 
	3.	 	Maintenance foreman assigns jobs based on skill and ability. You could
have crews of all one craft or mixture of crafts. Crew would secure
permits, get necessary materials, communicate with foreman and operations.
	 
	4.	 	General Mechanic classification set up to increase skill level of
Painters, Laborers, Asbestos Workers, Carpenters, and Stores personnel who
choose to transfer to the Laborers. They would learn low, medium, and
some high skills of primary skill groups. Support personnel would be
trained, tested, and certified to become a General Mechanic. General
Mechanic would help primary skill craftsmen or perform the jobs outright
up to their level of skill and ability.
	 
	5.	 	Depending on jobs scheduled, General Mechanics may perform support
work by themselves or with help from primary group.

 

 

May 24, 2004

Hand Delivered on May 24, 2004

Mr. Jesse Sanchez

Texas City Metal Trades Council

P.O. Box 1149

Texas City, Texas 77592-1149

     Re: Revised Letter of Agreement for Company’s Revised May 21, 2004 Final
and Concluding Offer

Dear Mr. Sanchez:

This revised letter of agreement is submitted as part of the Company’s attached
Revised May 21, 2004 Final and Concluding Offer. The terms of this letter and
the attached offer will be withdrawn at 4 p.m. on Friday, May 28, 2004 if not
accepted and ratified by the Union by that time. If it is accepted and ratified
before this deadline, all terms of our offer, including this letter, will
become effective on the date of ratification.

The following additional terms are submitted as part of the attached Company’s
Revised May 21 Final and Concluding Offer:

1. Offers To Four Laid-Off Employees: Sterling will offer the four most senior
laid off employees (based on bargaining unit seniority) from among all of the
following combined maintenance crafts: Pipefitters, Asbestos Workers,
Boilermakers/Ironworkers, Painters, Laborers, Carpenters and Heavy Equipment
Operating Engineers, the opportunity to transfer into Group 4 Material Handling
positions. It is understood that only the four most senior employees who are
laid off from all such classifications in the aggregate will receive offers;
there will not be four offers to the senior laid-off employees from each
classification. The four offers may be accepted by written notice to Human
Resources within five (5) working days of the delivery to the union of notice
of layoff but not thereafter. It is understood that if any of the four most
senior employees fail timely to accept the offer to transfer, Sterling shall
have no obligation to extend such offers to any other bargaining unit
employees.

2. Post-strike Agreement: The Post-strike Agreement between Sterling
Chemicals, Inc. and Texas City Metal Trades Council signed by both parties on
May 10, 2004, will remain if effect for the duration of this contract period.

3. Dismissal Of Lawsuit: The Union will promptly dismiss with prejudice its
lawsuit against Sterling [Civil Action No. G-04-302, in the United States
District Court], in which the union seeks an order compelling Sterling to
arbitrate the “Contractor vs. Bargaining Unit” and “Alleged Contractor Recall
Rights” grievances and damages resulting from Sterling’s refusal to arbitrate
them. The Union also releases Sterling from any alleged liability based on the
allegations contained in those two grievances.

 

 

4. Resolution and Clarification of Company Proposal #16-A and Union Committee
Support For Ratification: It is acknowledged that Company’s proposal #16-A was
the only previously un-resolvable issue between the parties. The Union and
Company have discussed in good faith all possible alternate solutions to the
unresolved #16-A and neither party knows of any other concession that it is
willing to make on #16-A or any other issue that might enable the parties to
reach agreement, other than what is represented and agreed to within this
Letter of Agreement and attached Revised Final and Concluding Offer. It is
further agreed that agreement to the terms of this offer has been reached after
good faith bargaining, in which the union representatives and each member of
the union’s bargaining committee has agreed to recommend ratification to the
membership.

5. Bargaining unit employees laid off pursuant to Article 11 on or before May
1, 2005 who are between the ages of 54 and 55 on May 1, 2004 and who would have
reached COMBO 80 by May 1, 2005 if their employment had not been terminated
will be entitled to the following: 1) no early retirement reduction applied to
their pension benefit, 2) eligibility to enroll in the retiree medical plan
beginning the first of the month after attainment of age 55, 3) eligibility to
pay active employee medical plan premiums for COBRA medical coverage until age
55.

If you accept our Revised Final and Concluding Offer which includes our May 21
proposal and this letter agreement, and it is timely ratified by the members,
please sign below and return a copy to me upon ratification.

Sincerely,

Rick Turner

Human Resources Manager

Sterling Chemicals, Inc.

Accepted:

Jesse Sanchez

Texas City Metal Trades Council

Cc: P. Palacio, FMCS<PAGE>
                                                                     EXHIBIT 4.3

                                 GREY WOLF, INC.

                                       AND

                                   [TRUSTEE],
                                     TRUSTEE

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

                                    INDENTURE

                                   DATED AS OF

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

                             SENIOR DEBT SECURITIES

<PAGE>

                                 GREY WOLF, INC.

           RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939
                   AND INDENTURE DATED AS OF _________________

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

<Table>
<Caption>
SECTION OF TRUST                                              SECTION(S) OF
INDENTURE ACT OF 1939                                          OF INDENTURE
---------------------                                         --------------
<S>                                                           <C>
Section 310 (a)(1)........................................................609
            (a)(2)........................................................609
            (a)(3).............................................Not Applicable
            (a)(4).............................................Not Applicable
            (b)......................................................608, 610
Section 311 (a)...........................................................613
            (b)...........................................................613
            (c)................................................Not Applicable
Section 312 (a)......................................................701, 702
            (b)...........................................................702
            (c)...........................................................702
Section 313 (a)...........................................................703
            (b)...........................................................703
            (c)...........................................................703
            (d)...........................................................703
Section 314 (a)......................................................704, 105
            (b)................................................Not Applicable
            (c)(1)........................................................102
            (c)(2)........................................................102
            (c)(3).............................................Not Applicable
            (d)................................................Not Applicable
            (e)...........................................................102
Section 315 (a)...........................................................601
            (b)...........................................................602
            (c)...........................................................601
            (d)...........................................................601
            (d)(1)..................................................603(a)(8)
            (d)(2)........................................................601
            (d)(3)........................................................601
            (e)...........................................................514
Section 316 (a)(1)(A).....................................................512
            (a)(1)(B).....................................................513
            (a)(2).............................................Not Applicable
            (a)(last sentence)............................................101
            (b)...........................................................508
Section 317 (a)(1)........................................................503
            (a)(2)........................................................504
            (b)..........................................................1003
Section 318 (a)...........................................................107
</Table>

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

Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.

                                       1

<PAGE>

                                 TRUST INDENTURE

                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                                                               PAGE
<S>                                                                                                            <C>
ARTICLE ONE DEFINITIONS ..........................................................................................1
   Section 101.          Definitions..............................................................................1
   Section 102.          Compliance Certificates and Opinions.....................................................7
   Section 103.          Form of Documents Delivered to Trustee...................................................8
   Section 104.          Acts of Holders; Record Dates............................................................8
   Section 105.          Notices, Etc, to Trustee and Company....................................................10
   Section 106.          Notice to Holders; Waiver...............................................................10
   Section 107.          Conflict with Trust Indenture Act.......................................................11
   Section 108.          Effect of Headings and Table of Contents................................................11
   Section 109.          Successors and Assigns..................................................................11
   Section 110.          Separability Clause.....................................................................11
   Section 111.          Benefits of Indenture...................................................................11
   Section 112.          Governing Law...........................................................................11
   Section 113.          Legal Holidays..........................................................................12
   Section 114.          Language of Notices, Etc................................................................12
   Section 115.          Submission to Jurisdiction..............................................................12
   Section 116.          Corporate Obligation....................................................................12

ARTICLE TWO SECURITY FORMS.......................................................................................12
   Section 201.          Forms Generally.........................................................................12
   Section 202.          Form of Legend for Global Securities....................................................13
   Section 203.          Form of Trustee's Certificate of Authentication.........................................13
   Section 204.          Securities in Global Form...............................................................14

ARTICLE THREE THE SECURITIES.....................................................................................14
   Section 301.          Amount Unlimited; Issuable In Series....................................................14
   Section 302.          Denominations...........................................................................18
   Section 303.          Execution, Authentication, Delivery and Dating..........................................18
   Section 304.          Temporary Securities....................................................................19
   Section 305.          Registration, Registration of Transfer and Exchange.....................................20
   Section 306.          Mutilated, Destroyed, Lost and Stolen Securities........................................21
   Section 307.          Payment of Interest; Interest Rights Preserved..........................................21
   Section 308.          Persons Deemed Owners...................................................................23
   Section 309.          Cancellation............................................................................23
   Section 310.          Computation of Interest.................................................................23
   Section 311.          CUSIP Numbers...........................................................................23

ARTICLE FOUR SATISFACTION AND DISCHARGE..........................................................................24
   Section 401.          Satisfaction and Discharge of Indenture.................................................24
   Section 402.          Application of Trust Money..............................................................25
</Table>

                                       i
<PAGE>

<Table>
<Caption>
                                                                                                               PAGE
<S>                                                                                                            <C>
ARTICLE FIVE REMEDIES............................................................................................25
   Section 501.          Events of Default.......................................................................25
   Section 502.          Acceleration of Maturity; Rescission and Annulment......................................26
   Section 503.          Collection of Indebtedness and Suits for Enforcement by Trustee.........................27
   Section 504.          Trustee May File Proofs of Claim........................................................28
   Section 505.          Trustee May Enforce Claims Without Possession of Securities.............................29
   Section 506.          Application of Money Collected..........................................................29
   Section 507.          Limitation on Suits.....................................................................29
   Section 508.          Unconditional Right of Holders to Receive Principal, Premium and Interest...............30
   Section 509.          Restoration of Rights and Remedies......................................................30
   Section 510.          Rights and Remedies Cumulative..........................................................30
   Section 511.          Delay or Omission Not Waiver............................................................31
   Section 512.          Control by Holders......................................................................31
   Section 513.          Waiver of Past Defaults.................................................................31
   Section 514.          Undertaking for Costs...................................................................31
   Section 515.          Waiver of Stay or Extension Laws........................................................32

ARTICLE SIX THE TRUSTEE..........................................................................................32
   Section 601.          Certain Duties and Responsibilities.....................................................32
   Section 602.          Notice of Defaults......................................................................32
   Section 603.          Certain Rights of Trustee...............................................................32
   Section 604.          Not Responsible for Recitals or Issuance of Securities..................................34
   Section 605.          May Hold Securities.....................................................................34
   Section 606.          Money Held in Trust.....................................................................34
   Section 607.          Compensation and Reimbursement..........................................................34
   Section 608.          Conflicting Interests...................................................................35
   Section 609.          Corporate Trustee Required; Eligibility.................................................35
   Section 610.          Resignation and Removal; Appointment of Successor.......................................35
   Section 611.          Acceptance of Appointment by Successor..................................................37
   Section 612.          Merger, Conversion, Consolidation or Succession to Business.............................38
   Section 613.          Preferential Collection of Claims Against Company.......................................38
   Section 614.          Appointment of Authenticating Agent.....................................................38

ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY..................................................40
   Section 701.          Company to Furnish Trustee Names and Addresses of Holders...............................40
   Section 702.          Preservation of Information; Communications to Holders..................................40
   Section 703.          Reports by Trustee......................................................................41
   Section 704.          Reports by Company......................................................................41

ARTICLE EIGHT CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE...............................................41
   Section 801.          Company May Consolidate, Etc., Only on Certain Terms....................................41
   Section 802.          Successor Substituted...................................................................42
</Table>

                                       ii
<PAGE>

<Table>
<Caption>
                                                                                                               PAGE
<S>                                                                                                            <C>
ARTICLE NINE SUPPLEMENTAL INDENTURES.............................................................................43
   Section 901.          Supplemental Indentures Without Consent of Holders......................................43
   Section 902.          Supplemental Indentures With Consent of Holders.........................................44
   Section 903.          Execution of Supplemental Indentures....................................................45
   Section 904.          Effect of Supplemental Indentures.......................................................45
   Section 905.          Conformity with Trust Indenture Act.....................................................45
   Section 906.          Reference in Securities to Supplemental Indentures......................................45

ARTICLE TEN COVENANTS............................................................................................45
   Section 1001.         Payment of Principal, Premium and Interest..............................................45
   Section 1002.         Maintenance of Office or Agency.........................................................46
   Section 1003.         Money for Securities Payments to be Held in Trust.......................................46
   Section 1004.         Statement by Officers as to Default.....................................................47
   Section 1005.         Existence...............................................................................47
   Section 1006.         Waiver of Certain Covenants.............................................................48
   Section 1007.         Additional Amounts......................................................................48

ARTICLE ELEVEN REDEMPTION OF SECURITIES..........................................................................49
   Section 1101.         Applicability of Article................................................................49
   Section 1102.         Election to Redeem; Notice to Trustee...................................................49
   Section 1103.         Selection by Trustee of Securities to be Redeemed.......................................49
   Section 1104.         Notice of Redemption....................................................................50
   Section 1105.         Deposit of Redemption Price.............................................................51
   Section 1106.         Securities Payable on Redemption Date...................................................51
   Section 1107.         Securities Redeemed in Part.............................................................51
   Section 1108.         Purchase of Securities..................................................................51

ARTICLE TWELVE SINKING FUNDS.....................................................................................52
   Section 1201.         Applicability of Article................................................................52
   Section 1202.         Satisfaction of Sinking Fund Payments with Securities...................................52
   Section 1203.         Redemption of Securities for Sinking Fund...............................................52

ARTICLE THIRTEEN LEGAL DEFEASANCE AND COVENANT DEFEASANCE........................................................53
   Section 1301.         Company's Option to Effect Legal Defeasance or Covenant Defeasance......................53
   Section 1302.         Legal Defeasance and Discharge..........................................................53
   Section 1303.         Covenant Defeasance.....................................................................53
   Section 1304.         Conditions to Legal Defeasance or Covenant Defeasance...................................54
   Section 1305.         Deposited Money and Government Obligations to be Held in Trust; Other
                         Miscellaneous Provisions................................................................55
   Section 1306.         Reinstatement...........................................................................56
   Section 1307.         Deposited Money and Government Obligations to be Held in Trust..........................56

ARTICLE FOURTEEN MEETING OF HOLDERS OF SECURITIES................................................................56
   Section 1401.         Purposes for which Meetings may be Called...............................................56
   Section 1402.         Call, Notice and Place of Meetings......................................................56
</Table>

                                      iii
<PAGE>

<Table>
<Caption>
                                                                                                               PAGE
<S>                                                                                                            <C>
   Section 1403.         Persons Entitled to Vote at Meetings....................................................57
   Section 1404.         Quorum; Action..........................................................................57
   Section 1405.         Determination of Voting Rights; Conduct and Adjournment of Meetings.....................58
   Section 1406.         Counting Votes and Recording Action of Meetings.........................................59
</Table>

                                       iv

<PAGE>

         INDENTURE, dated as of _______________, 200__, between Grey Wolf, Inc.,
a corporation duly organized and existing under the laws of the State of Texas
(herein called the "COMPANY"), having its principal office at 10370 Richmond
Avenue, Suite 600, Houston, Texas 77042, and [ ], as Trustee (herein called the
"TRUSTEE").

                             RECITALS OF THE COMPANY

         The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"SECURITIES"), which may be convertible into or exchangeable for any securities
of any Persons (including the Company), to be issued in one or more series as in
this Indenture provided.

         All things necessary to make this Indenture a valid and legally binding
agreement of the Company, in accordance with its terms, have been done.

         NOW, THEREFORE, THIS INDENTURE WITNESSETH:

         For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities or of series thereof, as
follows:

                                  ARTICLE ONE

                                   DEFINITIONS

Section 101. Definitions.

         For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:

                  (1) the terms defined in this Article have the meanings
         assigned to them in this Article and include the plural as well as the
         singular;

                  (2) all other terms used herein which are defined in the Trust
         Indenture Act, either directly or by reference therein, have the
         meanings assigned to them therein;

                  (3) all accounting terms not otherwise defined herein have the
         meanings assigned to them in accordance with United States generally
         accepted accounting principles, the term "GENERALLY ACCEPTED ACCOUNTING
         PRINCIPLES" with respect to any computation required or permitted
         hereunder shall mean such accounting principles as are generally
         accepted as consistently applied by the Company at the date of such
         computation;

                  (4) unless the context otherwise requires, any reference to an
         "Article", a "Section" or an "Exhibit" refers to an Article, a Section
         or an Exhibit, as the case may be, of or to this Indenture; and

                                       1
<PAGE>

                  (5) the words "herein", "hereof" and "hereunder" and other
         words of similar import refer to this Indenture as a whole and not to
         any particular Article, Section or other subdivision.

         Certain terms, used principally in ARTICLE SIX and ARTICLE THIRTEEN,
are defined in those Articles.

         "ACT", when used with respect to any Holder, has the meaning specified
in SECTION 104.

         "AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

         "AUTHENTICATING AGENT" means any Person authorized by the Trustee
pursuant to SECTION 614 to act on behalf of the Trustee to authenticate
Securities of one or more series.

         "AUTHORIZED NEWSPAPER" means a newspaper, in the English language or in
an official language of the country of publication, customarily published on
each Business Day, whether or not published on Saturdays, Sundays or holidays,
and of general circulation in each place in connection with which the term is
used or in the financial community of each such place. Where successive
publications are required to be made in Authorized Newspapers, the successive
publications may be made in the same or in different newspapers in the same city
meeting the foregoing requirements and in each case on any Business Day.

         "BOARD OF DIRECTORS" means either the board of directors of the Company
or any duly authorized committee of that board.

         "BOARD RESOLUTION" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.

         "BUSINESS DAY", when used with respect to any Place of Payment, means
each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
or executive order to close.

         "COMMISSION" means the United States Securities and Exchange
Commission, from time to time constituted, created under the Exchange Act, or,
if at any time after the execution of this instrument the United States
Securities and Exchange Commission is not existing and performing the duties now
assigned to it under the Trust Indenture Act, then the body performing such
duties at such time.

         "COMPANY" means the Person named as the "COMPANY" in the first
paragraph of this Indenture until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"COMPANY" shall mean such successor Person.

                                       2
<PAGE>

         "COMPANY REQUEST" or "COMPANY ORDER" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President or a Vice President, and by its Treasurer,
an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.

         "CORPORATE TRUST OFFICE" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered,
which as of the date hereof is located at.

         "CORPORATION" means a corporation, association, company, joint-stock
company or business trust.

         "COVENANT DEFEASANCE" has the meaning specified in SECTION 1303.

         "DEFAULTED INTEREST" has the meaning specified in SECTION 307.

         "DEPOSITARY" means, with respect to Securities of any series issuable
in whole or in part in the form of one or more Global Securities, a clearing
agency registered under the Exchange Act that is designated to act as Depositary
for such Securities as contemplated by SECTION 301.

         "EVENT OF DEFAULT" has the meaning specified in SECTION 501.

         "EXCHANGE ACT" means the United States Securities Exchange Act of 1934
and any statute successor thereto, in each case as amended from time to time.

         "EXPIRATION DATE" has the meaning specified in SECTION 104.

         "GLOBAL SECURITY" means a Security that evidences all or part of the
Securities of any series and bears the legend set forth in SECTION 202 (or such
legend as may be specified as contemplated by SECTION 301 for such Securities).

         "GOVERNMENT OBLIGATION" has the meaning specified in SECTION 1304.

         "HOLDER" means the Person in whose name the Security is registered in
the Security Register.

         "INDENTURE" means this instrument as originally executed and as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively. The term "INDENTURE" shall also include the terms of particular
series of Securities established as contemplated by SECTION 301.

         "INTEREST", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.

                                       3
<PAGE>

         "INTEREST PAYMENT DATE", when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.

         "INVESTMENT COMPANY ACT" means the United States Investment Company Act
of 1940 and any statute successor thereto, in each case as amended from time to
time.

         "LEGAL DEFEASANCE" has the meaning specified in SECTION 1302.

         "MATURITY", when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.

         "NOTICE OF DEFAULT" means a written notice of the kind specified in
SECTION 501(4).

         "OFFICERS' CERTIFICATE" means a certificate signed by the Chairman of
the Board, a Vice Chairman of the Board, the President or a Vice President, and
by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary, of the Company, and delivered to the Trustee. One of the officers
signing an Officers' Certificate given pursuant to SECTION 1004 shall be the
principal executive, financial or accounting officer of the Company.

         "OPINION OF COUNSEL" means a written opinion of counsel, who may be
counsel for or an employee of the Company.

         "ORIGINAL ISSUE DISCOUNT SECURITY" means any Security which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to SECTION 502.

         "OUTSTANDING", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:

                  (1) Securities theretofore cancelled by the Trustee or
         delivered to the Trustee for cancellation;

                  (2) Securities for whose payment or redemption money in the
         necessary amount has been theretofore deposited with the Trustee or any
         Paying Agent (other than the Company) in trust or set aside and
         segregated in trust by the Company (if the Company shall act as its own
         Paying Agent) for the Holders of such Securities; provided that, if
         such Securities are to be redeemed, notice of such redemption has been
         duly given pursuant to this Indenture or provision therefor
         satisfactory to the Trustee has been made;

                  (3) Securities as to which legal defeasance has been effected
         pursuant to SECTION 1302; and

                  (4) Securities that have been paid pursuant to SECTION 1001 or
         in exchange for or in lieu of which other Securities have been
         authenticated and delivered pursuant to this Indenture, other than any
         such Securities in respect of which there shall have been presented to
         the Trustee proof satisfactory to it that such Securities are held by a
         bona

                                       4
<PAGE>

         fide purchaser in whose hands such Securities are valid obligations of
         the Company; provided, however, that in determining whether the Holders
         of the requisite principal amount of the Outstanding Securities have
         given, made or taken any request, demand, authorization, direction,
         notice, consent, waiver, or other action hereunder as of any date or
         whether a quorum is present at a meeting of Holders of Securities, (A)
         the principal amount of an Original Issue Discount Security which shall
         be deemed to be Outstanding shall be the amount of the principal
         thereof that would be due and payable as of such date upon acceleration
         of the Maturity thereof to such date pursuant to SECTION 502, (B) if,
         as of such date, the principal amount payable at the Stated Maturity of
         a Security is not determinable, the principal amount of such Security
         that shall be deemed to be Outstanding shall be the amount as specified
         or determined as contemplated by SECTION 301, (C) the principal amount
         of a Security denominated in one or more foreign currencies or currency
         units which shall be deemed to be Outstanding shall be the U.S. dollar
         equivalent, determined as of such date in the manner provided as
         contemplated by SECTION 301, of the principal amount of such Security
         (or, in the case of a Security described in clause (A) or (B) above, of
         the amount determined as provided in such clause), and (D) Securities
         owned by the Company or any other obligor upon the Securities or any
         Affiliate of the Company or of such other obligor shall be disregarded
         and deemed not to be Outstanding, except that, in determining whether
         the Trustee shall be protected in relying upon any such request,
         demand, authorization, direction, notice, consent, waiver, or other
         action, or upon any such determination as to the presence of a quorum,
         only Securities that a Responsible Officer of the Trustee actually
         knows to be so owned shall be so disregarded. Securities so owned that
         have been pledged in good faith may be regarded as Outstanding if the
         pledgee establishes to the satisfaction of the Trustee the pledgee's
         right so to act with respect to such Securities and that the pledgee is
         not the Company or any other obligor upon the Securities or any
         Affiliate of the Company or of such other obligor.

         "PAYING AGENT" means any Person, which may include the Company,
authorized by the Company to pay the principal of or any premium or interest on
any Securities on behalf of the Company.

         "PERSON" means any individual, corporation, partnership, limited
liability company, joint venture, trust, unincorporated organization or
government or any agency or political subdivision thereof.

         "PLACE OF PAYMENT", when used with respect to the Securities of any
series, means the place or places specified in accordance with SECTION 301 where
the principal of and any premium and interest on the Securities of that series
are payable.

         "PREDECESSOR SECURITY" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under SECTION 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.

                                       5
<PAGE>

         "REDEMPTION DATE", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.

         "REDEMPTION PRICE", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.

         "REGULAR RECORD DATE" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that purpose
as contemplated by SECTION 301.

         "RESPONSIBLE OFFICER", when used with respect to the Trustee, means any
vice president, the treasurer, any assistant treasurer, any trust officer or
assistant trust officer, the controller or any assistant controller or any other
officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of his or her knowledge of and familiarity with the particular
subject and who shall have responsibility for the administration of this
Indenture.

         "SECURITIES" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture provided, however, that if at any time there is more than
one Person acting as Trustee under this Indenture, "Securities" with respect to
the Indenture as to which such Person is Trustee shall have the meaning stated
in the first recital of this Indenture and shall more particularly mean
Securities authenticated and delivered under this Indenture, exclusive, however,
of Securities of any series as to which such Person is not Trustee.

         "SECURITIES ACT" means the United States Securities Act of 1933 and any
statute successor thereto, in each case as amended from time to time.

         "SECURITY REGISTER" and "SECURITY REGISTRAR" have the respective
meanings specified in SECTION 305.

         "SPECIAL RECORD DATE" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to SECTION 307.

         "STATED MATURITY", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.

         "SUBSIDIARY" means a corporation, limited liability company, limited
partnership, or other entity more than 50% of the outstanding voting stock of
which is owned, directly or indirectly, by the Company or by one or more other
Subsidiaries, or by the Company and one or more other Subsidiaries. For the
purposes of this definition, "voting stock" means the equity interest that
ordinarily has voting power for the election of directors, managers, trustees or
general partners of an entity, or persons performing similar functions, whether
at all times or only so long as no senior class of equity interest has such
voting power by reason of any contingency.

                                       6
<PAGE>

         "TRUST INDENTURE ACT" means the United States Trust Indenture Act of
1939 as in force at the date as of which this instrument was executed; provided,
however, that in the event the Trust Indenture Act of 1939 is amended after such
date, "TRUST INDENTURE ACT" means, to the extent required by any such amendment,
the Trust Indenture Act of 1939 as so amended.

         "TRUSTEE" means the Person named as the "TRUSTEE" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder, and
if at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect to
Securities of that series.

         "UNITED STATES ALIEN" means any Person who, for United States Federal
income tax purposes, is a foreign corporation, a non-resident alien individual,
a non-resident alien fiduciary of a foreign estate or trust, or a foreign
partnership one or more of the members of which is, for United States Federal
income tax purposes, a foreign corporation, a non-resident alien individual or a
non-resident alien fiduciary of a foreign estate or trust.

         "VICE PRESIDENT", when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "VICE PRESIDENT".

Section 102. Compliance Certificates and Opinions.

         Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of an
Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture.

         Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (except for certificates
provided for in SECTION 1004) shall include,

                  (1) a statement that each individual signing such certificate
         or opinion has read such covenant or condition and the definitions
         herein relating thereto;

                  (2) a brief statement as to the nature and scope of the
         examination or investigation upon which the statements or opinions
         contained in such certificate or opinion are based;

                  (3) a statement that, in the opinion of each such individual,
         he has made such examination or investigation as is necessary to enable
         him to express an informed opinion as to whether or not such covenant
         or condition has been complied with; and

                  (4) a statement as to whether, in the opinion of each such
         individual, such condition or covenant has been complied with.

                                       7
<PAGE>

Section 103. Form of Documents Delivered to Trustee.

         In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.

         Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.

         Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.

Section 104. Acts of Holders; Record Dates.

         Any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Indenture to be given, made or
taken by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing. Except as herein otherwise expressly provided, such action
shall become effective when such instrument or instruments are delivered to the
Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "ACT" of the Holders signing
such instrument or instruments, and shall be sufficient for any purpose of this
Indenture and (subject to SECTION 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.

         The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which the Trustee deems sufficient.

         The principal amount and serial numbers of Securities held by any
Person, and the date of holding the same, shall be proved by the Security
Register.

                                       8
<PAGE>

         Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.

         The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to
give, make or take any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given, made or taken by Holders of Securities of such series, provided, that the
Company may not set a record date for, and the provisions of this paragraph
shall not apply with respect to, the giving or making of any notice,
declaration, request or direction referred to in the next paragraph. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of the relevant series on such record date, and no other Holders,
shall be entitled to take the relevant action, whether or not such Holders
remain Holders after such record date; provided, that no such action shall be
effective hereunder unless taken on or prior to the applicable Expiration Date
by Holders of the requisite principal amount of Outstanding Securities of such
series on such record date. Nothing in this paragraph shall be construed to
prevent the Company from setting a new record date for any action for which a
record date has previously been set pursuant to this paragraph (whereupon the
record date previously set shall automatically and with no action by any Person
be cancelled and of no effect), and nothing in this paragraph shall be construed
to render ineffective any action taken by Holders of the requisite principal
amount of Outstanding Securities of the relevant series on the date such action
is taken. Promptly after any record date is set pursuant to this paragraph, the
Company, at its own expense, shall cause notice of such record date, the
proposed action by Holders and the applicable Expiration Date to be given to the
Trustee in writing and to each Holder of Securities of the relevant series in
the manner set forth in SECTION 106.

         The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to join
in the giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in SECTION 502, (iii) any request to institute
proceedings referred to in SECTION 507(2) or (iv) any direction referred to in
SECTION 512, in each case with respect to Securities of such series. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of such series on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction, whether or
not such Holders remain Holders after such record date; provided, that no such
action shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date. Nothing in this paragraph shall
be construed to prevent the Trustee from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be cancelled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities of the relevant
series on the date such action is taken. Promptly after any record date is set
pursuant to this paragraph, the Trustee, at the Company's expense, shall cause
notice of such record date, the proposed action by Holders and the applicable
Expiration Date to be given to the

                                       9
<PAGE>

Company in writing and to each Holder of Securities of the relevant series in
the manner set forth in SECTION 106.

         With respect to any record date set pursuant to this Section, the party
hereto that sets such record date may designate any day as the "EXPIRATION DATE"
and from time to time may change the Expiration Date to any earlier or later
day; provided that no such change shall be effective unless notice of the
proposed new Expiration Date is given to the other party hereto in writing, and
to each Holder of Securities of the relevant series in the manner set forth in
SECTION 106, on or prior to the existing Expiration Date. If an Expiration Date
is not designated with respect to any record date set pursuant to this Section,
the party hereto that set such record date shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph.

         Without limiting the foregoing, a Holder entitled hereunder to take any
action hereunder with regard to any particular Security may do so with regard to
all or any part of the principal amount of such Security or by one or more duly
appointed agents each of which may do so pursuant to such appointment with
regard to all or any part of such principal amount.

Section 105. Notices, Etc. to Trustee and Company.

         Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,

                  (1) the Trustee by any Holder or by the Company shall be
         sufficient for every purpose hereunder if made, given, furnished or
         filed in writing (which may be via facsimile) to or with the Trustee at
         its Corporate Trust Office, Attention: Corporate Trust Administration,
         or

                  (2) the Company by the Trustee or by any Holder shall be
         sufficient for every purpose hereunder (unless otherwise herein
         expressly provided) if in writing and mailed, first-class postage
         prepaid, to the Company addressed to it at the address of its principal
         office specified in the first paragraph of this instrument, Attention:
         Chief Financial Officer, or at any other address previously furnished
         in writing to the Trustee by the Company.

Section 106. Notice to Holders; Waiver.

         Except as otherwise expressly provided herein, where this Indenture
provides for notice of any event to Holders of Securities, such notice shall be
sufficiently given to Holders of Securities if in writing and mailed,
first-class postage prepaid, to each Holder of a Security affected by such
event, at the address of such Holder as it appears in the Security Register, not
later than the latest date (if any), and not earlier than the earliest date (if
any), prescribed for the giving of such notice.

         In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice to
Holders of Securities by mail, then such

                                       10
<PAGE>

notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder. In any case where notice
to Holders of Securities is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Holder of a
Security shall affect the sufficiency of such notice with respect to other
Holders.

         Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders of Securities shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.

Section 107. Conflict with Trust Indenture Act.

         This Indenture shall incorporate and be governed by the provisions of
the Trust Indenture Act that are required to be part of and to govern indentures
qualified under the Trust Indenture Act. If any provision hereof limits,
qualifies or conflicts with a provision of the Trust Indenture Act that is
required under such Act to be a part of and govern this Indenture, the latter
provision shall control. If any provision of this Indenture modifies or excludes
any provision of the Trust Indenture Act that may be so modified or excluded,
the former provision shall be deemed to apply to this Indenture as so modified
or to be excluded, as the case may be.

Section 108. Effect of Headings and Table of Contents.

         The Article and SECTION headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.

Section 109. Successors and Assigns.

         All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.

Section 110. Separability Clause.

         In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

Section 111. Benefits of Indenture.

         Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, and the Holders of Securities, any benefit or any legal or equitable
right, remedy or claim under this Indenture.

Section 112. Governing Law.

         This Indenture and the Securities shall be governed by and construed in
accordance with the law of the State of New York.

                                       11
<PAGE>

Section 113. Legal Holidays.

         In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the Securities
(other than a provision of any Security which specifically states that such
provision shall apply in lieu of this Section)) payment of interest or principal
(and premium, if any) need not be made at such Place of Payment on such date,
but may be made on the next succeeding Business Day at such Place of Payment
with the same force and effect as if made on the Interest Payment Date or
Redemption Date, or at the Stated Maturity.

Section 114. Language of Notices, Etc.

         Any request, demand, authorization, direction, notice, consent or
waiver required or permitted under this Indenture shall be in the English
language, except that any published notice may be in an official language of the
country of publication.

Section 115. Submission to Jurisdiction.

         The Company irrevocably submits to the non-exclusive jurisdiction of
any federal or state court in the City, County and State of New York, United
States, and any appellate court from any thereof, in any legal suit, action or
proceeding based on or arising under the Securities or this Indenture and agrees
that all claims in respect of such suit or proceeding may be determined in any
such court. The Company irrevocably waives to the fullest extent permitted by
law, any objection to any such suit, including actions, suits or proceedings
relating to the securities laws of the United States of America or any state
thereof, in such courts whether on the grounds of venue, residence or domicile
or the defense of an inconvenient forum or objections to personal jurisdiction
with respect to the maintenance of such legal suit, action or proceeding. The
Company agrees that the final judgment in any such suit, action or proceeding
brought in such court shall be conclusive and binding upon the Company and may
be enforced in any court to the jurisdiction of which the Company is subject by
a suit upon such judgment.

Section 116. Corporate Obligation.

         No recourse may be taken, directly or indirectly, against any
incorporator, subscriber to the capital stock, stockholder, officer, director or
employee of the Company or the Trustee or of any predecessor or successor of the
Company or the Trustee with respect to the Company's obligations on the
Securities or the obligations of the Company or the Trustee under this Indenture
or any certificate or other writing delivered in connection herewith.

                                  ARTICLE TWO

                                 SECURITY FORMS

Section 201. Forms Generally.

         The Securities of each series shall be in substantially the form or
forms as shall be established by or pursuant to a Board Resolution or in one or
more indentures supplemental

                                       12
<PAGE>

hereto, in each case with such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture, and may
have such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or Depositary therefor or as may, consistently herewith, be
determined by the officers executing such Securities as evidenced by their
execution thereof. If the form of Securities of any series is established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by SECTION 303 for the authentication and delivery of such
Securities (or any such temporary global Security).

         The definitive Securities shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as determined
by the officers executing such Securities, as evidenced by their execution of
such Securities.

Section 202. Form of Legend for Global Securities.

         Unless otherwise specified as contemplated by SECTION 301 for the
Securities evidenced thereby, every Global Security authenticated and delivered
hereunder shall bear a legend in substantially the following form:

         THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE
REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

Section 203. Form of Trustee's Certificate of Authentication.

         The Trustee's certificates of authentication shall be in substantially
the following form:

         "This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.

                                          [NAME OF TRUSTEE],
                                          As Trustee

                                          By:
                                             -----------------------------------
                                                Authorized Signatory
Dated:                           "
       --------------------------

                                       13
<PAGE>

Section 204. Securities in Global Form.

         If Securities of or within a series are issuable in global form, as
specified as contemplated by SECTION 301, then any such Security shall represent
such of the Outstanding Securities of such series as shall be specified therein
and may provide that it shall represent the aggregate amount of Outstanding
Securities from time to time endorsed thereon and that the aggregate amount of
Outstanding Securities represented thereby may from time to time be reduced to
reflect exchanges. Any endorsement of a Security in global form to reflect the
amount, or any increase or decrease in the amount, of Outstanding Securities
represented thereby shall be made by the Trustee in such manner and upon
instructions given by such Person or Persons as shall be specified therein or in
the Company Order to be delivered to the Trustee pursuant to SECTION 303 or
SECTION 304. Subject to the provisions of SECTION 303 and, if applicable,
SECTION 304, the Trustee shall deliver and redeliver any Security in permanent
global form in the manner and upon instructions given by the Person or Persons
specified therein or in the applicable Company Order. If a Company Order
pursuant to SECTION 303 or SECTION 304 has been, or simultaneously is,
delivered, any instructions by the Company with respect to endorsement or
delivery or redelivery of a Security in global form shall be in writing but need
not comply with SECTION 102 and need not be accompanied by an Opinion of
Counsel.

         The provisions of the last sentence of SECTION 303 shall apply to any
Security represented by a Security in global form if such Security was never
issued and sold by the Company and the Company delivers to the Trustee the
Security in global from together with written instructions (which need not
comply with SECTION 102 and need not be accompanied by an Opinion of Counsel)
with regard to the reduction in the principal amount of Securities represented
thereby, together with the written statement contemplated by the last sentence
of SECTION 303.

         Notwithstanding the provisions of SECTION 307, unless otherwise
specified as contemplated by SECTION 301, payment of principal of and any
premium and interest on any Security in permanent global form shall be made to
the Person or Persons specified therein.

                                 ARTICLE THREE

                                 THE SECURITIES

Section 301. Amount Unlimited; Issuable In Series.

         The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is unlimited.

         The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution and, subject to SECTION 303,
set forth, or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto, prior to the issuance
of Securities of any series,

                  (1) the title of the Securities of the series, including CUSIP
         numbers, if applicable (which shall distinguish the Securities of the
         series from Securities of any other series);

                                       14
<PAGE>

                  (2) any limit upon the aggregate principal amount of the
         Securities of the series which may be authenticated and delivered under
         this Indenture (except for Securities authenticated and delivered upon
         registration of transfer of, or in exchange for, or in lieu of, other
         Securities of the series pursuant to SECTION 304, 305, 306, 906 OR 1107
         and except for any Securities which, pursuant to SECTION 303, are
         deemed never to have been authenticated and delivered hereunder);

                  (3) the Trustees, Authenticating Agents, Paying Agents,
         Security Registrars or other agents with respect to the series;

                  (4) the Person to whom any interest on any Security of the
         series shall be payable, if other than the Person in whose name that
         Security (or one or more Predecessor Securities) is registered at the
         close of business on the Regular Record Date for such interest, the
         extent to which, or the manner in which, any interest payable on a
         temporary global Security on an Interest Payment Date will be paid if
         other than in the manner provided in SECTION 304;

                  (5) the date or dates on which the principal of the Securities
         of the series is payable;

                  (6) the ability to issue additional Securities in the same
         series;

                  (7) the price or prices at which the Securities will be sold;

                  (8) the right, if any, to extend the interest payment periods
         and the duration of any such deferral period, including the maximum
         consecutive period during which interest payment periods may be
         extended;

                  (9) provisions, if any, granting special rights to holders of
         the Securities upon the occurrence of specified events;

                  (10) the terms, if any, upon which Holders may convert or
         exchange (or upon which the Company may require Holders to convert or
         exchange) the Securities of the series into or for the common stock,
         preferred stock or other securities or property of the Company or of
         another Person (or upon which the Securities of the series shall
         automatically convert or be exchanged into or for such other securities
         or property);

                  (11) the rate or rates at which the Securities of the series
         shall bear interest, if any, which may be fixed or variable, or the
         method by which such rate shall be determined, the date or dates from
         which any such interest shall accrue, or the method by which such date
         or dates will be determined, the Interest Payment Dates on which any
         such interest shall be payable, and the Regular Record Date for the
         interest payable on any Securities on any Interest Payment Date;

                  (12) in the case of Original Issue Discount Securities, the
         rate of accretion of principal, which may be fixed or variable, or the
         method of determining such rate, and the date or dates from which
         principal will accrete or the method by which such date or dates will
         be determined;

                                       15
<PAGE>

                  (13) the place or places where, subject to the provisions of
         SECTION 1002, the principal of and any premium, if any, and interest,
         if any, on Securities of the series shall be payable, where any
         Securities of the series may be surrendered for registration of
         transfer, where Securities of the series may be surrendered for
         exchange, where Securities of the series that are convertible or
         exchangeable may be surrendered for conversion or exchange, as
         applicable, and notices and demands to or upon the Company in respect
         of the Securities of the series and this Indenture may be served;

                  (14) the period or periods within which, the price or prices
         at which and the terms and conditions upon which any Securities of the
         series may be redeemed, in whole or in part at the option of the
         Company and, if other than by a Board Resolution, the manner in which
         any election by the Company to redeem the Securities shall be
         evidenced;

                  (15) the obligation, if any, of the Company to redeem or
         purchase any Securities of the series pursuant to any sinking fund or
         analogous provisions or at the option of the Holder thereof and the
         period or periods within which, the price or prices at which and the
         terms and conditions upon which any Securities of the series shall be
         redeemed, repaid or purchased, in whole or in part, pursuant to such
         obligation;

                  (16) if other than denominations of $1,000 and any integral
         multiple thereof, the denominations in which any Securities of the
         series shall be issuable;

                  (17) whether the amount of payments of principal (or premium,
         if any) or interest, if any, on the Securities of the series may be
         determined with reference to an index, formula or other method (which
         index, formula or method may be based, without limitation, on one or
         more currencies, commodities, equity indices or other indices), and the
         manner in which such amounts shall be determined;

                  (18) the currency or currencies, including currency units or
         composite currencies, in which payment of the principal of and any
         premium and interest on any Securities of the series shall be payable
         if other than the currency of the United States of America and the
         manner of determining the equivalent thereof in the currency of the
         United States of America for purposes of the definition of
         "OUTSTANDING" in SECTION 101;

                  (19) if the principal of or any premium or interest on any
         Securities of the series is to be payable, at the election of the
         Company or the Holder thereof, in one or more currencies or currency
         units other than that or those in which such Securities are stated to
         be payable, the currency, currencies or currency units in which the
         principal of or any premium or interest on such Securities as to which
         such election is made shall be payable, the periods within which and
         the terms and conditions upon which such election is to be made and the
         amount so payable (or the manner in which such amount shall be
         determined);

                  (20) if other than the entire principal amount thereof, the
         portion of the principal amount of any Securities of the series which
         shall be payable upon declaration of acceleration of the Maturity
         thereof pursuant to SECTION 502;

                                       16
<PAGE>

                  (21) the collateral, if any, securing the Securities of the
         series, and the guarantors, if any, who will guarantee the Securities
         of the series, or the methods of determining such collateral, if any,
         and such guarantors, if any;

                  (22) whether the amount of principal, premium, if any, and
         interest on the Securities of the series may be determined by reference
         to an index, formula or other method, such as one or more currencies,
         commodities, equity indices or other indices, and the manner in which
         such amounts will be determined;

                  (23) if the principal amount payable at the Stated Maturity of
         any Securities of the series will not be determinable as of any one or
         more dates prior to the Stated Maturity, the amount which shall be
         deemed to be the principal amount of such Securities as of any such
         date for any purpose thereunder or hereunder, including the principal
         amount thereof which shall be due and payable upon any Maturity other
         than the Stated Maturity or which shall be deemed to be Outstanding as
         of any date prior to the Stated Maturity (or, in any such case, the
         manner in which such amount deemed to be the principal amount shall be
         determined);

                  (24) if applicable, that the Securities of the series, in
         whole or any specified part, shall be defeasible pursuant to SECTION
         1302 OR SECTION 1303 or both such Sections and, if other than by a
         Board Resolution, the manner in which any election by the Company to
         defease such Securities shall be evidenced;

                  (25) if applicable, that any Securities of the series shall be
         issuable in whole or in part in the form of one or more Global
         Securities and, in such case, the respective Depositaries for such
         Global Securities, the form of any legend or legends which shall be
         borne by any such Global Security in addition to or in lieu of that set
         forth in SECTION 202 and any circumstances in addition to or in lieu of
         those set forth in the legend set forth in SECTION 202 in which any
         such Global Security may be exchanged in whole or in part for
         Securities registered, and any transfer of such Global Security in
         whole or in part may be registered in the name or name of Persons other
         than the Depositary for such Global Security or a nominee thereof;

                  (26) any addition to or change in the Events of Default which
         apply to any Securities of the series and any change in the right of
         the Trustee or the requisite Holders of such Securities to declare the
         principal amount thereof due and payable pursuant to SECTION 502;

                  (27) any addition to or change in the covenants set forth in
         ARTICLE TEN which applies to Securities of the series, including any
         limitation on the Company's ability to incur debt, redeem stock or sell
         its assets;

                  (28) whether, under what circumstances and the currency in
         which the Company will pay additional amounts as contemplated by
         SECTION 1009 on the Securities of the series to any Holder who is not a
         United States Person(s) (including any modification to the definition
         of such term) in respect of any tax, assessment or governmental charge
         and, if so, whether the Company will have the option to redeem such
         Securities rather than pay such additional amounts (and the terms of
         any such option);

                  (29) provisions, if any, granting special rights to holders of
         Securities of the series upon the occurrence of specified events; and

                                       17
<PAGE>

                  (30) any other terms of the series (which terms shall not be
         inconsistent with the provisions of this Indenture, except as permitted
         by SECTION 901 OR 902);

All Securities of such series shall be substantially identical except as to
denomination and except as may otherwise be provided in or pursuant to the Board
Resolution or supplemental indenture referred to above and (subject to SECTION
303) set forth, or determined in the manner provided, in the Officers'
Certificate referred to above or in any such indenture supplemental hereto. If
any of the terms of the series are established by action taken pursuant to a
Board Resolution, a copy of an appropriate record of such action shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.

Section 302. Denominations.

         Unless otherwise provided as contemplated by SECTION 301 with respect
to the Securities of any series, any Securities of such series, other than
Securities issued in global form (which may be of any denomination), shall be
issuable in denominations of $1,000 and any integral multiple thereof.

Section 303. Execution, Authentication, Delivery and Dating.

         The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, its President or one of
its Vice Presidents, attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Securities may be
manual or facsimile.

         Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.

         At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities. If the
forms or terms of the Securities of the series have been established by or
pursuant to one or more Board Resolutions as permitted by SECTIONS 201 AND 301,
in authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and (subject to SECTION 601) shall be fully protected in
relying upon, an Opinion of Counsel stating,

                  (1) if the forms of such Securities have been established by
         or pursuant to Board Resolution as permitted by SECTION 201, that such
         forms have been established in conformity with the provisions of this
         Indenture;

                  (2) if the terms of such Securities have been established by
         or pursuant to Board Resolution as permitted by SECTION 301, that such
         terms have been established in conformity with the provisions of this
         Indenture; and

                                       18
<PAGE>

                  (3) that such Securities when authenticated and delivered by
         the Trustee and issued by the Company in the manner and subject to any
         conditions specified in such Opinion of Counsel, will constitute valid
         and legally binding obligations of the Company enforceable in
         accordance with their terms, subject to bankruptcy, insolvency,
         fraudulent transfer, reorganization, moratorium and similar laws of
         general applicability relating to or affecting creditors' rights and to
         general principles of equity.

The Trustee shall not be required to authenticate such Securities if the issue
of such Securities pursuant to this Indenture will affect the Trustee's own
rights, duties or immunities under the Securities and this Indenture or
otherwise in a manner that is not reasonably acceptable to the Trustee.

         Notwithstanding the provisions of SECTION 301 and of the two preceding
paragraphs, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to SECTION 301 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraphs at or prior to the
authentication of each Security of such series if such documents are delivered
at or prior to the authentication upon original issuance of the first Security
of such series to be issued.

         Each Security shall be dated the date of its authentication.

         No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered hereunder
but never issued and sold by the Company, and the Company shall deliver such
Security to the Trustee for cancellation as provided in SECTION 309, for all
purposes of this Indenture such Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.

Section 304. Temporary Securities.

         Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities.

         If temporary Securities of any series are issued, the Company will
cause definitive Securities of that series to be prepared without unreasonable
delay. After the preparation of definitive Securities of that series, the
temporary Securities of such series shall be exchangeable for definitive
Securities of such series upon surrender of the temporary Securities of such
series at the office or agency of the Company in a Place of Payment for that
series, without charge to

                                       19
<PAGE>

the Holder. Upon surrender for cancellation of any one or more temporary
Securities of any series the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor one or more definitive Securities
of the same series, of any authorized denominations and like aggregate principal
amount and tenor.

         Until exchanged in full as hereinafter provided, the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of the same series and of like
tenor authenticated and delivered hereunder.

Section 305. Registration, Registration of Transfer and Exchange.

         The Company shall cause to be kept at an office or agency to be
maintained by the Company in accordance with SECTION 1002 a register (being the
combined register of the Security Registrar and all transfer agents designated
pursuant to SECTION 1002 for the purpose of registration of transfer of
Securities and sometimes collectively referred to as the "SECURITY REGISTER") in
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Securities and the registration of
transfers of Securities. The Trustee is hereby appointed "SECURITY REGISTRAR"
for the purpose of registering Securities and transfers of Securities as herein
provided.

         Except as may be provided in SECTION 203, or as may be
provided as contemplated by SECTION 301, upon surrender for registration of
transfer of any Security of a series at the office or agency of the Company
maintained pursuant to SECTION 1002 for such purpose in a Place of Payment for
that series, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of the same series, of any authorized denominations and of like
tenor and aggregate principal amount.

         At the option of the Holder, Securities of any series may be exchanged
for other Securities of the same series, of any authorized denominations and of
like tenor and aggregate principal amount, upon surrender of the Securities to
be exchanged at such office or agency. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities that the Holder making the exchange is
entitled to receive.

         All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.

         Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Trustee or any transfer
agent) be duly endorsed, or be accompanied by a written instrument of transfer
in form satisfactory to the Company and the Security Registrar or any transfer
agent duly executed, by the Holder thereof or his attorney duly authorized in
writing.

         No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or

                                       20
<PAGE>

exchange of Securities, other than exchanges pursuant to SECTION 304, 906 OR
1107 not involving any transfer.

         If the Securities of any series (or of any series and specified tenor)
are to be redeemed in part, the Company shall not be required to issue, register
the transfer of or exchange any Securities of that series (or of that series and
specified tenor, as the case may be) during a period beginning at the opening of
business 15 days before any selection of Securities of that series to be
redeemed and ending at the close of business on the day of the mailing of the
relevant notice of redemption.

Section 306. Mutilated, Destroyed, Lost and Stolen Securities.

         If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.

         If there shall be delivered to the Company and the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Security and (ii)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of the same series and of like tenor and principal amount and bearing a number
not contemporaneously outstanding.

         Notwithstanding the provisions of the previous two paragraphs, in case
any such mutilated, destroyed, lost or stolen Security has become or is about to
become due and payable, the Company in its discretion may, instead of issuing a
new Security, pay such Security.

         Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.

         Every new Security of any series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series duly issued hereunder.

         The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.

Section 307. Payment of Interest; Interest Rights Preserved.

         Except as otherwise provided as contemplated by SECTION 301 with
respect to any series of Securities, interest on any Security which is payable,
and is punctually paid or duly provided

                                       21
<PAGE>

for, on any Interest Payment Date shall be paid to the Person in whose name that
Security (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest.

         Any interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "DEFAULTED INTEREST") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause (1) or (2) below:

                  (1) The Company may elect to make payment of any Defaulted
         Interest to the Persons in whose names the Securities of such series
         (or their respective Predecessor Securities) are registered at the
         close of business on a special record date (a "SPECIAL RECORD DATE")
         for the payment of such Defaulted Interest, which shall be fixed in the
         following manner. The Company shall notify the Trustee in writing of
         the amount of Defaulted Interest proposed to be paid on each Security
         of such series and the date of the proposed payment, and at the same
         time the Company shall deposit with the Trustee an amount of money
         equal to the aggregate amount proposed to be paid in respect of such
         Defaulted Interest or shall make arrangements satisfactory to the
         Trustee for such deposit prior to the date of the proposed payment,
         such money when deposited to be held in trust for the benefit of the
         Persons entitled to such Defaulted Interest as in this Clause provided.
         Thereupon the Trustee shall fix a Special Record Date for the payment
         of such Defaulted Interest which shall be not more than 15 days and not
         less than 10 days prior to the date of the proposed payment and not
         less than 10 days after the receipt by the Trustee of the notice of the
         proposed payment. The Trustee shall promptly notify the Company of such
         Special Record Date and, in the name and at the expense of the Company,
         shall cause notice of the proposed payment of such Defaulted Interest
         and the Special Record Date therefor to be given to each Holder of
         Securities of such series in the manner set forth in SECTION 106, not
         less than 10 days prior to such Special Record Date. Notice of the
         proposed payment of such Defaulted Interest and the Special Record Date
         therefor having been so mailed, such Defaulted Interest shall be paid
         to the Persons in whose names the Securities of such series (or their
         respective Predecessor Securities) are registered at the close of
         business on such Special Record Date and shall no longer be payable
         pursuant to the following Clause (2).

                  (2) The Company may make payment of any Defaulted Interest on
         the Securities of any series in any other lawful manner not
         inconsistent with the requirements of any securities exchange on which
         such Securities may be listed, and upon such notice as may be required
         by such exchange, if, after notice given by the Company to the Trustee
         of the proposed payment pursuant to this Clause, such manner of payment
         shall be deemed practicable by the Trustee.

Subject to the foregoing provisions of this Section and SECTION 305, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.

                                       22
<PAGE>

Section 308. Persons Deemed Owners.

         Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of and any premium
and (subject to SECTION 305 AND SECTION 307) any interest on such Security and
for all other purposes whatsoever, whether or not such Security be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.

Section 309. Cancellation.

         All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by it. The Company may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee (or to any other Person for delivery
to the Trustee) for cancellation any Securities previously authenticated
hereunder which the Company has not issued and sold, and all Securities so
delivered shall be promptly cancelled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as provided
in this Section, except as expressly permitted by this Indenture. All cancelled
Securities held by the Trustee shall be disposed of as directed by a Company
Order or in the Trustee's customary manner, which manner shall be communicated
in writing to the Company.

Section 310. Computation of Interest.

         Except as otherwise specified as contemplated by SECTION 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.

Section 311. CUSIP Numbers.

         The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use such "CUSIP" numbers in
notices of redemption as a convenience to Holders; provided that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company will notify the
Trustee of any change in "CUSIP" numbers.

                                       23
<PAGE>
                                  ARTICLE FOUR

                           SATISFACTION AND DISCHARGE

Section 401. Satisfaction and Discharge of Indenture.

         This Indenture shall upon Company Request cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Securities herein expressly provided for, and any right to receive additional
amounts, as provided in SECTION 1007), and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when

                  (1) either

                           (A) all Securities theretofore authenticated and
                  delivered (other than Securities which have been destroyed,
                  lost or stolen and which have been replaced or paid as
                  provided in SECTION 306 and Securities for whose payment money
                  has theretofore been deposited in trust or segregated and held
                  in trust by the Company and thereafter repaid to the Company
                  or discharged from such trust, as provided in SECTION 1003)
                  have been delivered to the Trustee for cancellation; or

                           (B) all such Securities not theretofore delivered to
                  the Trustee for cancellation:

                                    (i) have become due and payable, or

                                    (ii) will become due and payable at their
                           Stated Maturity within one year, or

                                    (iii) are to be called for redemption within
                           one year under arrangements satisfactory to the
                           Trustee for the giving of notice of redemption by the
                           Trustee in the name, and at the expense, of the
                           Company,

                  and the Company, in the case of (i), (ii) or (iii) above, has
                  deposited or caused to be deposited with the Trustee as trust
                  funds in trust for such purpose money in an amount sufficient
                  to pay and discharge the entire indebtedness on such
                  Securities not theretofore delivered to the Trustee for
                  cancellation, for principal and any premium and interest to
                  the date of such deposit (in the case of Securities which have
                  become due and payable) or to the Stated Maturity or
                  Redemption Date, as the case may be;

                  (2) the Company has paid or caused to be paid all other sums
         payable hereunder by the Company; and

                                       24
<PAGE>

                  (3) the Company has delivered to the Trustee an Officers'
         Certificate and an Opinion of Counsel, each stating that all conditions
         precedent herein provided for relating to the satisfaction and
         discharge of this Indenture have been complied with.

         Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under SECTION 607, the obligations of
the Trustee to any Authenticating Agent under SECTION 614 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section, the obligations of the Trustee under SECTION 402 and the last
paragraph of SECTION 1003 shall survive such satisfaction and discharge.

Section 402. Application of Trust Money.

         Subject to the provisions of the last paragraph of SECTION 1003, all
money deposited with the Trustee pursuant to SECTION 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and any premium and
interest for whose payment such money has been deposited with the Trustee.

                                  ARTICLE FIVE

                                    REMEDIES

Section 501. Events of Default.

         "EVENT OF DEFAULT", wherever used herein with respect to Securities of
any series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):

                  (1) default in the payment of any interest upon any Security
         of that series when it becomes due and payable, and continuance of such
         default for a period of 30 days; or,

                  (2) default in the payment of the principal of or any premium
         on any Security of that series at its Maturity and (if so established
         as contemplated by SECTION 301 in respect of that series), in the case
         of technical or administrative difficulties only if such default
         persists for a period of five days; or

                  (3) default in the deposit of any sinking fund payment, when
         and as due by the terms of a Security of that series; or

                  (4) default in the performance, or breach, of any covenant or
         warranty of the Company in this Indenture (other than a covenant or
         warranty a default in whose performance or whose breach is elsewhere in
         this Section specifically dealt with or which has expressly been
         included in this Indenture solely for the benefit of series of
         Securities other than that series), and continuance of such default or
         breach for a period of 90 days

                                       25
<PAGE>

         after there has been given, by registered or certified mail, to the
         Company by the Trustee or to the Company and the Trustee by the Holders
         of at least 25% in principal amount of the Outstanding Securities of
         that series a written notice specifying such default or breach and
         requiring it to be remedied and stating that such notice is a "NOTICE
         OF DEFAULT" hereunder; or

                  (5) the entry by a court having jurisdiction in the premises
         of (A) a decree or order for relief in respect of the Company in an
         involuntary case or proceeding under any applicable Federal or State
         bankruptcy, insolvency, reorganization or other similar law or (B) a
         decree or order adjudging the Company a bankrupt or insolvent, or
         approving as properly filed a petition seeking reorganization,
         arrangement, adjustment or composition of or in respect of the Company
         under any applicable Federal or State law, or appointing a custodian,
         receiver, liquidator, assignee, trustee, sequestrator or other similar
         official of the Company or of any substantial part of its property, or
         ordering the winding up or liquidation of its affairs, and the
         continuance of any such decree or order for relief or any such other
         decree or order unstayed and in effect for a period of 90 consecutive
         days; or

                  (6) the commencement by the Company of a voluntary case or
         proceeding under any applicable Federal or State bankruptcy,
         insolvency, reorganization or other similar law or of any other case or
         proceeding to be adjudicated a bankrupt or insolvent, of the consent by
         it to the entry of a decree or order for relief in respect of the
         Company in an involuntary case or proceeding under any applicable
         Federal or State bankruptcy, insolvency, reorganization or other
         similar law or to the commencement of any bankruptcy or insolvency case
         or proceeding against it, or the filing by it of a petition or answer
         or consent seeking reorganization or relief under any applicable
         Federal or State law, or the consent by it to the filing of such
         petition or to the appointment of or taking possession by a custodian,
         receiver, liquidator, assignee, trustee, sequestrator or other similar
         official of the Company or of any substantial part of its property, or
         the making by it of an assignment for the benefit of creditors, or the
         admission by it in writing of its inability to pay its debts generally
         as they become due; or

                  (7) any other Event of Default provided with respect to
         Securities of that series.

Section 502. Acceleration of Maturity; Rescission and Annulment.

         If an Event of Default (other than an Event of Default specified in
SECTION 501(5) OR 501(6)) with respect to Securities of any series at the time
Outstanding occurs and is continuing, then in every such case the Trustee or the
Holders of not less than 25% in principal amount of the Outstanding Securities
of that series may declare the principal amount of all the Securities of that
series (or, if any Securities of that series are Original Issue Discount
Securities, such portion of the principal amount of such Securities as may be
specified by the terms thereof) to be due and payable immediately, by a notice
in writing to the Company (and to the Trustee if given by Holders), and upon any
such declaration such principal amount (or specified amount) shall become
immediately due and payable. If an Event of Default specified in SECTION 501(5)
OR 501(6) with respect to Securities of any series at the time Outstanding
occurs, the principal amount of all the Securities of that series (or, if any
Securities of that series are Original Issue

                                       26
<PAGE>

Discount Securities, such portion of the principal amount of such Securities as
may be specified by the terms thereof) shall automatically, and without any
declaration or other action on the part of the Trustee or any Holder, become
immediately due and payable.

         At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if

                  (1) the Company has paid or deposited with the Trustee a sum
         sufficient to pay

                           (A) all overdue interest on all Securities of that
                  series,

                           (B) the principal of (and premium, if any, on) any
                  Securities of that series which have become due otherwise than
                  by such declaration of acceleration and any interest thereon
                  at the rate or rates prescribed therefor in such Securities,

                           (C) to the extent that payment of such interest is
                  lawful, interest upon overdue interest at the rate or rates
                  prescribed therefor in such Securities, and

                           (D) all sums paid or advanced by the Trustee
                  hereunder and the reasonable compensation, expenses,
                  disbursements and advances of the Trustee, its agents and
                  counsel; and

                  (2) all Events of Default with respect to Securities of that
         series, other than the non-payment of the principal of Securities of
         that series which has become due solely by such declaration of
         acceleration, have been cured or waived as provided in SECTION 513.

         No such rescission shall affect any subsequent default or impair any
right consequent thereon.

Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee.

         The Company covenants that if

                  (1) default is made in the payment of any interest on any
         Security when such interest becomes due and payable and such default
         continues for a period of 30 days, or

                  (2) default is made in the payment of the principal of (or
         premium, if any, on) any Security at the Maturity thereof,

the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and any premium and interest and, to the extent that
payment of such interest shall be legally enforceable,

                                       27
<PAGE>

interest on any overdue principal and premium and on any overdue interest, at
the rate or rates prescribed therefor in such Securities, and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances, of the Trustee, its agents and counsel.

         If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon such Securities, wherever
situated.

         If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series by
such appropriate judicial proceedings as the Trustee shall deem reasonably
necessary to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.

Section 504. Trustee May File Proofs of Claim.

         In case of the pendency of any receivership, insolvency, liquidation
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal (or lesser amount
in the case of Original Issue Discount Securities) of the Securities shall then
be due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Company
for the payment of overdue principal (and premium, if any), interest or any
additional amounts) shall be entitled and empowered, by intervention in such
proceeding or otherwise.

                  (1) to file and prove a claim for the whole amount of
         principal (or lesser amount in the case of Original Issue Discount
         Securities) (and premium, if any) and interest and any additional
         amounts owing and unpaid in respect of the Securities and to file such
         other papers or documents as may be necessary or advisable in order to
         have the claims of the Trustee (including any claim for the reasonable
         compensation, expenses, disbursements and advances of the Trustee, its
         agents and counsel) and of the Holders allowed in such judicial
         proceeding, and

                  (2) to collect and receive any monies or other property
         payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation,

                                       28
<PAGE>

expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under SECTION 607.

         Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceedings; provided, however,
that the Trustee may on behalf of the Holders, vote for the election of a
trustee in bankruptcy or similar official and be a member of a creditors' or
other similar committee.

Section 505. Trustee May Enforce Claims Without Possession of Securities.

         All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.

Section 506. Application of Money Collected.

         Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or any premium
or interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:

                  FIRST: To the payment of all amounts due the Trustee under
         SECTION 607;

                  SECOND: To the payment of the amounts then due and unpaid for
         principal of and any premium and interest on the Securities in respect
         of which or for the benefit of which such money has been collected,
         ratably, without preference or priority of any kind, according to the
         amounts due and payable on such Securities for principal and any
         premium and interest, respectively; and

                  THIRD: To the Company.

Section 507. Limitation on Suits.

         Subject to SECTION 508, no Holder of any Security of any series shall
have any right to institute any proceeding, judicial or otherwise, with respect
to this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless

                  (1) an Event of Default with respect to Securities of such
         series shall have occurred and be continuing and such Holder has
         previously given written notice to the Trustee of a continuing Event of
         Default with respect to the Securities of that series;

                                       29
<PAGE>

                  (2) the Holders of not less than 25% in principal amount of
         the Outstanding Securities of that series shall have made written
         request to the Trustee to institute proceedings in respect of such
         Event of Default in its own name as Trustee hereunder;

                  (3) such Holder or Holders have offered to the Trustee
         reasonable indemnity satisfactory to it against the costs, expenses and
         liabilities to be incurred in compliance with such request;

                  (4) the Trustee for 60 days after its receipt of such notice,
         request and offer of indemnity has failed to institute any such
         proceeding; and

                  (5) no direction inconsistent with such written request has
         been given to the Trustee during such 60-day period by the Holders of a
         majority in principal amount of the Outstanding Securities of that
         series;

it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.

Section 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest.

         Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and any premium and (subject to SECTIONS 305
AND 307) interest on such Security on the respective Stated Maturities expressed
in such Security (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.

Section 509. Restoration of Rights and Remedies.

         If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder; then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.

Section 510. Rights and Remedies Cumulative.

         Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities in the last paragraph of
SECTION 306, no right or remedy herein conferred upon or reserved to the Trustee
or to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy

                                       30
<PAGE>

hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.

Section 511. Delay or Omission Not Waiver.

         No delay or omission of the Trustee or of any Holder of any Securities
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.

Section 512. Control by Holders.

         With respect to the Securities of any series, the Holders of a majority
in principal amount of the Outstanding Securities of any series shall have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred on
the Trustee, provided that

                  (1) such direction shall not be in conflict with any rule of
         law or with this Indenture, and

                  (2) the Trustee may take any other action deemed proper by the
         Trustee which is not inconsistent with such direction.

Section 513. Waiver of Past Defaults.

         The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series and its consequences, except a default

                  (1) in the payment of the principal of or any premium or
         interest on any Security of such series, or

                  (2) in respect of a covenant or provision hereof which under
         Article Nine cannot be modified or amended without the consent of the
         Holder of each Outstanding Security of such series affected.

         Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.

Section 514. Undertaking for Costs.

         All parties to this Indenture agree and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed that in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken, suffered or omitted by it as Trustee, a court
may require any party litigant in such suit to file an undertaking

                                       31
<PAGE>

to pay the costs of such suit, and may assess costs including reasonable
attorneys' fees and expenses against any such party litigant, in the manner and
to the extent provided in the Trust Indenture Act; provided that neither this
Section nor the Trust Indenture Act shall be deemed to authorize any court to
require such an undertaking or to make such an assessment in any suit instituted
by the Company.

Section 515. Waiver of Stay or Extension Laws.

         The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.

                                  ARTICLE SIX

                                   THE TRUSTEE

Section 601. Certain Duties and Responsibilities.

         The Trustee, prior to the occurrence of an Event of Default and after
the curing or waiving of all Events of Default which may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in this Indenture. In case an Event of Default has occurred (which has
not been cured or waived), the Trustee shall exercise such of the rights and
powers vested in it by this Indenture, and use the same degree of care and
skill in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.

         No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:

                  (1) this subsection shall not be construed to limit the
effect of the first paragraph of this SECTION 601;

                  (2) prior to the occurrence of an Event
of Default with respect to the Securities of a series and after
the curing or waiving of all Events of Default with respect to
such series which may have occurred;

                           (a) the duties and obligations of the
Trustee with respect to Securities shall be determined
solely by the express provisions of this Indenture, and the Trustee
shall not be liable except for the performance of such duties and obligations
with respect to such series as are specifically set forth in this Indenture,
and no implied covenants or obligations with respect to such series shall be
read into this Indenture against the Trustee; and

                           (b) in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Trustee and conforming to the requirements of this
Indenture; but in the case of any such certificates or opinions which by any
provision hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether they
conform to the requirements of this Indenture;

                  (3) the Trustee shall not be liable for an error of judgment
made in good faith by a Responsible Officer, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts; and

                  (4) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a majority in aggregate principal
amount of the Outstanding Securities or of a series of Outstanding Securities
relating to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Indenture with respect to the Securities or a
series thereof.

         None of the provisions of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.

         Whether therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.

Section 602. Notice of Defaults

         The Trustee shall, within 90 days of an Event of Default known to it
with respect to a series of Securities, give to the Holders thereof, in the
manner provided in SECTION 106, notice of all Events of Default with respect to
such series known to the Trustee, unless such Events of Default shall have been
cured or waived before the giving of such notice; provided, however, that except
in the case of an Event of Default in the payment of the principal of, or
premium, if any, or interest on, any of the Securities of such series or in the
making of any sinking fund payment with respect to the Securities of such
series, the Trustee shall be protected in withholding such notice if and so long
as the board of directors, the executive committee or a committee of directors
or responsible officers of the Trustee in good faith determine that the
withholding of such notice is in the interests of the Holders thereof and
provided further that, in the case of any default as described in SECTION 501(4)
with respect to Securities of such series, no such notice to Holders of Debt
Securities of such series shall be given until the 90th day after the date of
the notice specified in such Section shall have been given,  Except with respect
to an Event of Default pursuant to SECTION 501(1), (2) or (3), the Trustee will
not be charged with knowledge of Event of Default unless written notice thereof
shall have been given to a Responsible Officer of the Corporate Trust Office by
the Company or a Holder and such notice references the Securities generally and
this Indenture.

Section 603. Certain Rights of Trustee.

         Subject to the provisions of SECTION 601:

                  (1) the Trustee may conclusively rely and shall be fully
         protected in acting or refraining from acting upon any resolution,
         certificate, statement, instrument, opinion,

                                       32
<PAGE>

         report, notice, request, direction, consent, order, bond, debenture,
         note, other evidence of indebtedness or other paper or document
         (whether in its original or facsimile form) believed by it to be
         genuine and to have been signed or presented by the proper party or
         parties;

                  (2) any request or direction of the Company mentioned herein
         shall be sufficiently evidenced by a Company Request or Company Order,
         and any resolution of the Board of Directors shall be sufficiently
         evidenced by a Board Resolution;

                  (3) whenever in the administration of this Indenture the
         Trustee shall deem it desirable that a matter be proved or established
         prior to taking, suffering or omitting any action hereunder, the
         Trustee (unless other evidence be herein specifically prescribed) may,
         in the absence of bad faith on its part, rely upon an Officers'
         Certificate;

                  (4) the Trustee may consult with counsel of its own selection
         and the written advice of such counsel or any Opinion of Counsel shall
         be full and complete authorization and protection in respect of any
         action taken, suffered or omitted by it hereunder in good faith and in
         reliance thereon;

                  (5) the Trustee shall be under no obligation to exercise any
         of the rights or powers vested in it by this Indenture at the request
         or direction of any of the Holders pursuant to this Indenture, unless
         such Holders shall have offered to the Trustee reasonable security or
         indemnity satisfactory to it against the costs, expenses and
         liabilities which might be incurred by it in compliance with such
         request or direction;

                  (6) the Trustee shall not be bound to make any investigation
         into the facts or matters stated in any resolution, certificate,
         statement, instrument, opinion, report, notice, request, direction,
         consent, order, bond, debenture, note, other evidence of indebtedness
         or other paper or document, but the Trustee, in its discretion, may
         make such further inquiry or investigation into such facts or matters
         as it may see fit, and, if the Trustee shall determine to make such
         further inquiry or investigation, it shall be entitled to examine the
         books, records and premises of the Company, personally or by agent or
         attorney;

                  (7) the Trustee may execute any of the trusts or powers
         hereunder or perform any duties hereunder either directly or by or
         through agents or attorneys and the Trustee shall not be responsible
         for any misconduct or negligence on the part of any agent or attorney
         appointed with due care by it hereunder;

                  (8) the Trustee shall not be liable for any action taken,
         suffered, or omitted to be taken by it in good faith and reasonably
         believed by it to be authorized or within the discretion or rights or
         powers conferred upon it by this Indenture;

                  (9) for all purposes under this Indenture, the Trustee shall
         not be deemed to have notice or knowledge of an Event of Default (other
         than under Section 501(1),(2) or (3) unless written notice of such
         Event of Default is received by a Responsible Officer at the Corporate
         Trust Office from the Company or a Holder, and such notice references
         the Securities generally and this Indenture; and

                                       33
<PAGE>

                  (10) the rights, privileges, protections, immunities and
         benefits given to the Trustee, including, without limitation, its right
         to be indemnified, are extended to, and shall be enforceable by, the
         Trustee in each of its capacities hereunder, and each agent, custodian
         and the Person employed to act hereunder.

Section 604. Not Responsible for Recitals or Issuance of Securities.

         The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and neither the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Securities. Neither the
Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of Securities or the proceeds thereof.

Section 605. May Hold Securities.

         The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to SECTIONS
608 and 613, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.

Section 606. Money Held in Trust.

         Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.

Section 607. Compensation and Reimbursement.

         The Company agrees

                  (1) to pay to the Trustee from time to time reasonable
         compensation for all services rendered by it hereunder (which
         compensation shall not be limited by any provision of law in regard to
         the compensation of a trustee of an express trust);

                  (2) except as otherwise expressly provided herein, to
         reimburse the Trustee upon its request for all reasonable expenses,
         disbursements and advances incurred or made by the Trustee in
         accordance with any provision of this Indenture (including the
         reasonable compensation and the expenses and disbursements of its
         agents and counsel), except any such expense, disbursement or advance
         as shall be determined to have been caused by its own negligence or bad
         faith; and

                  (3) to indemnify the Trustee for, and to hold it harmless
         against, any loss, liability claim, damage or expense incurred without
         negligence or bad faith on its part, arising out of or in connection
         with the acceptance or administration of the trust or trusts hereunder,
         including the costs and expenses of defending itself against any claim
         or

                                       34
<PAGE>

         liability in connection with the exercise or performance of any of its
         powers or duties hereunder.

         The obligations of the Company under this SECTION 607 to compensate
the Trustee and to pay or reimburse the Trustee for expenses, disbursements and
advances shall constitute additional indebtedness hereunder and shall survive
the satisfaction and discharge of this Indenture. Such additional indebtedness
shall be secured by a lien prior to that of the Securities upon all property and
funds held or collected by the Trustee, as such, except funds held in trust for
the payment of principal of, and premium, if any, or interest on, Securities.

         When the Trustee incurs expenses or renders services after an Event of
Default specified in SECTION 501(5) or (6) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any bankruptcy, insolvency, reorganization or other
similar law.

Section 608. Conflicting Interests.

         If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture. To the extent
permitted by the Trust Indenture Act, the Trustee shall not be deemed to have a
conflicting interest by virtue of being a trustee under this Indenture with
respect to Securities of more than one series.

Section 609. Corporate Trustee Required; Eligibility.

         There shall at all times be one (and only one) Trustee hereunder with
respect to the Securities of each series, which may be Trustee hereunder for
Securities of one or more other series. Each Trustee shall be a Person that is
eligible pursuant to the Trust Indenture Act to act as such and has a combined
capital and surplus of at least $50,000,000 and has its Corporate Trust Office
or another office customarily used as a place of payment of securities in New
York, New York. If any such Person publishes reports of condition at least
annually, pursuant to law or to the requirements of its supervising or examining
authority, then for the purposes of this Section and to the extent permitted by
the Trust Indenture Act, the combined capital and surplus of such Person shall
be deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee with respect to the
Securities of any series shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.

Section 610. Resignation and Removal; Appointment of Successor.

         No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of SECTION 611.

         The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by SECTION 611 shall
not have been delivered to the resigning Trustee within 30 days after the giving
of such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Securities of such series.

         The Trustee may be removed at any time with respect to the Securities
of any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to the
Company.

         If at any time:

                                       35
<PAGE>

                  (1) the Trustee shall fail to comply with SECTION 608 after
         written request therefor by the Company or by any Holder who has been a
         bona fide Holder of a Security for at least six months, or

                  (2) the Trustee shall cease to be eligible under SECTION 609
         and shall fail to resign after written request therefor by the Company
         or by any such Holder, or

                  (3) the Trustee shall become incapable of acting or shall be
         adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
         property shall be appointed or any public officer shall take charge or
         control of the Trustee or of its property or affairs for the purpose of
         rehabilitation, conservation or liquidation,

then, in any such case, (A) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (B) subject to SECTION 514, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.

         If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, with respect
to the Securities of one or more series, the Company, by a Board Resolution,
shall promptly appoint a successor Trustee or Trustees with respect to the
Securities of that or those series (it being understood that any such successor
Trustee may be appointed with respect to the Securities of one or more or all of
such series and that at any time there shall be only one Trustee with respect to
the Securities of any particular series) and shall comply with the applicable
requirements of SECTION 611. If, within one year after such resignation, removal
or incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Securities of any series shall be appointed by Act of the Holders
of a majority in principal amount of the Outstanding Securities of such series
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment in accordance
with the applicable requirements of SECTION 611, become the successor Trustee
with respect to the Securities of such series and to that extent supersede the
successor Trustee appointed by the Company. If no successor Trustee with respect
to the Securities of any series shall have been so appointed by the Company or
the Holders of Securities of such series and accepted appointment in the manner
required by SECTION 611, any Holder who has been a bona fide Holder of a
Security of such series for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities of such
series.

         The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment of
a successor Trustee with respect to the Securities of any series to all Holders
of Securities of such series in the manner provided in SECTION 106. Each notice
shall include the name of the successor Trustee with respect to the Securities
of such series and the address of its Corporate Trust Office.

                                       36
<PAGE>

Section 611. Acceptance of Appointment by Successor.

         In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder.

         In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates.

         Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts referred to in the
first or second preceding paragraph, as the case may be.

         No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.

                                       37
<PAGE>

Section 612. Merger, Conversion, Consolidation or Succession to Business.

         Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.

Section 613. Preferential Collection of Claims Against Company.

         If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of SECTION 311 of the Trust Indenture Act, but only to the extent
therein specified, regarding the collection of claims against the Company (or
any such other obligor). For purposes of SECTION 311(b)(4) AND (6) of such Act,
the following terms shall mean:

                           (a) "CASH TRANSACTION" means any transaction in which
                  full payment for goods or securities sold is made within seven
                  days after delivery of the goods or securities in currency or
                  in checks or other orders drawn upon banks or bankers and
                  payable upon demand; and

                           (b) "SELF-LIQUIDATING PAPER" means any draft, bill of
                  exchange, acceptance or obligation which is made, drawn,
                  negotiated or incurred by the Company for the purpose of
                  financing the purchase, processing, manufacturing, shipment,
                  storage or sale of goods, wares or merchandise and which is
                  secured by documents evidencing title to, possession of, or a
                  lien upon, the goods, wares or merchandise or the receivables
                  or proceeds arising from the sale of the goods, wares or
                  merchandise previously constituting the security, provided the
                  security is received by the Trustee simultaneously with the
                  creation of the creditor relationship with the Company arising
                  from the making, drawing, negotiating or incurring of the
                  draft, bill of exchange, acceptance or obligation.

Section 614. Appointment of Authenticating Agent.

         The Trustee may appoint an Authenticating Agent or Agents with respect
to one or more series of Securities which shall be authorized to act on behalf
of the Trustee to authenticate Securities of such series issued upon original
issue and upon exchange, registration of transfer or partial redemption thereof
or pursuant to SECTION 306, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Any such appointment
shall be evidenced by an instrument in writing signed by a Responsible Officer
of the Trustee, and a copy of such instrument shall be promptly furnished to the
Company. Wherever reference is made in this

                                       38
<PAGE>

Indenture to the authentication and delivery of Securities by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.

         Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.

         An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give notice of such
appointment in the manner provided in SECTION 106 to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.

         The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of SECTION 607.

         If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:

                  "This is one of the Securities of the series designated
         therein referred to in the within-mentioned Indenture.

                                       39
<PAGE>

                                          [Name of Trustee],
                                          As Trustee

                                          By:
                                              -------------------------------
                                              As Authenticating Agent

                                          By:
                                              -------------------------------
                                              Authorized Officer"

         If all of the Securities of a series may not be originally issued at
one time, and if the Trustee does not have an office capable of authenticating
Securities upon original issuance located in a Place of Payment where the
Company wishes to have Securities of such series authenticated upon original
issuance, the Trustee, if so requested by the Company in writing (which writing
need not comply with SECTION 102 and need not be accompanied by an Opinion of
Counsel), shall appoint in accordance with this Section an Authenticating Agent
having an office in a Place of Payment designated by the Company with respect to
such series of Securities.

                                 ARTICLE SEVEN

                HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

Section 701. Company to Furnish Trustee Names and Addresses of Holders.

         With respect to each series of the Securities, the Company will furnish
or cause to be furnished to the Trustee

                  (1) semi-annually, not later than 15 days after each Regular
         Record Date or in the case of any series of Securities on which
         semi-annual interest is not payable, not more than 15 days after such
         semi-annual dates specified by the Trustee, a list, in such form as the
         Trustee may reasonably require, of the names and addresses of the
         Holders of Securities of each series as of the Regular Record Date or
         such semi-annual date, as the case may be, and

                  (2) at such other times as the Trustee may request in writing,
         within 30 days after the receipt by the Company of any such request, a
         list of similar form and content as of a date not more than 15 days
         prior to the time such list is furnished;

provided, that so long as the Trustee is the Security Registrar, the Company
shall not be required to furnish or cause to be furnished such a list to the
Trustee. The Company shall otherwise comply with Section 310(a) of the Trust
Indenture Act.

Section 702. Preservation of Information; Communications to Holders.

         The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in SECTION 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
SECTION 701 upon receipt of a new list so furnished.

                                       40
<PAGE>

         The rights of Holders to communicate with other Holders with respect to
their rights under this Indenture or under the Securities, and the corresponding
rights and privileges of the Trustee, shall be as provided by the Trust
Indenture Act.

         Every Holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any agent of either of them shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the Holders
in accordance with this SECTION 702, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under this
SECTION 702. The Company, the Trustee, the Security Registrar and any other
Person shall have the protection of Section 312(c) of the Trust Indenture Act.

Section 703. Reports by Trustee.

         The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto,
including Sections 313(a), 313(b), 313(c) and 313(d) of the Trust Indenture Act.

         A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when any Securities are listed on any stock exchange or
delisted therefrom.

Section 704. Reports by Company.

         (1) The Company covenants and agrees, and any obligor hereunder shall
covenant and agree, to file with the Trustee and the Holders, (in the manner
and to the extent provided in SECTION 703), within 15 days after the Company or
such obligor, as the case may be, is required to file the same with the
Commission, copies of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations prescribe) which the
Company or such obligor, as the case may be, may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Exchange Act, or if
the Company or such obligor, as the case may be, is not required to file
information, documents or reports pursuant to either of such Sections, then to
file with the Trustee and the Holders (in the manner and to the extent provided
in SECTION 703) and the Commission, in accordance with the rules and
regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Exchange Act in respect of a security
listed and registered on a national securities exchange as may be prescribed
form time to time in such rules and regulations.

         (2) The Company covenants and agrees, and any obligor hereunder shall
covenant and agree, to file with the Trustee and the Holders (in the manner
and to the extent provided in SECTION 703) and the Commission, in accordance
with the rules and regulations prescribed from time to time by the Commission,
such additional information, documents and reports with respect to compliance
by the Company or such obligor, as the case may be, with the conditions and
covenants provided for in this Indenture as may be required from time to time
by such rules and regulations.

         (3) Delivery of such reports, information and documents to the Trustee
pursuant to this SECTION 704 is for informational purposes only and the
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on the Officers'
Certificates).

                                 ARTICLE EIGHT

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

Section 801. Company May Consolidate, Etc., Only on Certain Terms.

         The Company shall not consolidate with or merge into any other Person
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person (other than a direct or indirect wholly-owned subsidiary
of the Company) and the Company shall not permit any Person (other than a direct
or indirect wholly-owned subsidiary of the Company) to consolidate with or merge
into the Company, unless:

                  (1) the Company is the surviving corporation or, in case the
         Company shall consolidate with or merge into another Person or convey,
         transfer or lease its properties

                                       41
<PAGE>

         and assets substantially as an entirety to any Person, the Person
         formed by such consolidation or into which the Company is merged or the
         Person which acquires by conveyance or transfer, or which leases, the
         properties and assets of the Company substantially as an entirety shall
         be a corporation, limited liability company, partnership or trust,
         organized and validly existing under the laws of the United States of
         America, any State thereof or the District of Columbia and shall
         expressly assume, by an indenture supplemental hereto, executed and
         delivered to the Trustee, in form reasonably satisfactory to the
         Trustee, the due and punctual payment of the principal of and any
         premium and interest (including all additional amounts, if any payable
         pursuant to SECTION 1007) on all the Securities and the performance or
         observance of every covenant of this Indenture on the part of the
         Company to be performed or observed;

                  (2) immediately after giving effect to such transaction and
         treating any indebtedness which becomes an obligation of the Company or
         any Subsidiary as a result of such transaction as having been incurred
         by the Company or such Subsidiary at the time of such transaction, no
         Event of Default, and no event which, after notice or lapse of time or
         both, would become an Event of Default, shall have happened and be
         continuing;

                  (3) if, as a result of any such consolidation or merger or
         such conveyance, transfer or lease, properties or assets of the Company
         would become subject to a mortgage, pledge, lien, security interest or
         other encumbrance which would not be permitted by this Indenture, the
         Company or such successor Person, as the case may be, shall take such
         steps as shall be necessary effectively to secure the Securities
         equally and ratably with (or prior to) all indebtedness secured
         thereby; and

                  (4) the Company has delivered to the Trustee an Officers'
         Certificate and an Opinion of Counsel, each stating that such
         consolidation, merger, conveyance, transfer or lease and, if a
         supplemental indenture is required in connection with such transaction,
         such supplemental indenture comply with this Article and that all
         conditions precedent herein provided for relating to such transaction
         have been complied with.

Section 802. Successor Substituted.

         Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety in accordance with
SECTION 801, the successor Person formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein, and thereafter, except in the case
of a lease, the predecessor Person shall be relieved of all obligations and
covenants under this Indenture and the Securities.

                                       42
<PAGE>

                                  ARTICLE NINE

                             SUPPLEMENTAL INDENTURES

Section 901. Supplemental Indentures Without Consent of Holders.

         Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form reasonably satisfactory
to the Trustee, for any of the following purposes:

                  (1) to evidence the succession of another Person to the
         Company and the assumption by any such successor of the covenants of
         the Company herein and in the Securities; or

                  (2) to add to the covenants of the Company for the benefit of
         the Holders of all or any series of Securities (and if such covenants
         are to be for the benefit of less than all series of Securities,
         stating that such covenants are expressly being included solely for the
         benefit of such series) or to surrender any right or power herein
         conferred upon the Company; or

                  (3) to add any additional Events of Default for the benefit of
         the Holders of all or any series of Securities (and if such additional
         Events of Default are to be for the benefit of less than all series of
         Securities, stating that such additional Events of Default are
         expressly being included solely for the benefit of such series); or

                  (4) to add to, change or eliminate any of the provisions of
         this Indenture in respect of one or more series of Securities, provided
         that any such addition, change or elimination (A) shall neither (i)
         apply to any Security of any series created prior to the execution of
         such supplemental indenture and entitled to the benefit of such
         provision nor (ii) modify the rights of the Holder of any such Security
         with respect to such provision or (B) shall become effective only when
         there is no such Security Outstanding; or

                  (5) to secure the Securities; or

                  (6) to establish the form or terms of Securities of any series
         as permitted by SECTIONS 201 AND 301; or

                  (7) to evidence and provide for the acceptance of appointment
         hereunder by a successor Trustee with respect to the Securities of one
         or more series and to add to or change any of the provisions of this
         Indenture as shall be necessary to provide for or facilitate the
         administration of the trusts hereunder by more than one Trustee,
         pursuant to the requirements of SECTION 611; or

                  (8) to cure any ambiguity, to correct or supplement any
         provision herein which may be defective or inconsistent with any other
         provision herein, or to make any other provisions with respect to
         matters or questions arising under this Indenture,

                                       43
<PAGE>

         provided that such action shall not adversely affect the interests of
         the Holders of Securities of any series in any material respect.

Section 902. Supplemental Indentures With Consent of Holders.

         With the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities of each series affected
by such supplemental indenture, by Act of said Holders delivered to the Company
and the Trustee, the Company, when authorized by a Board Resolution, and the
Trustee may enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of modifying in any manner the rights of
the Holders of Securities of such series under this Indenture; provided,
however, that no such supplemental indenture shall, without the consent of the
Holder of each Outstanding Security affected thereby,

                  (1) change the Stated Maturity of the principal of, or any
         installment of principal of or interest on, any Security, or reduce the
         principal amount thereof or the rate of interest thereon or any premium
         payable upon the redemption thereof, or change any obligation of the
         Company to pay additional amounts pursuant to SECTION 1007 (except as
         contemplated by SECTIONS 801 AND 802 and permitted by SECTION 901(1)),
         or reduce the amount of the principal of an Original Issue Discount
         Security or any other Security which would be due and payable upon a
         declaration of acceleration of the Maturity thereof pursuant to SECTION
         502, or change any Place of Payment where, or the coin or currency in
         which, any Security or any premium or interest thereon is payable, or
         impair the right to institute suit for the enforcement of any such
         payment on or after the Stated Maturity thereof (or, in the case of
         redemption, on or after the Redemption Date), or

                  (2) reduce the percentage in principal amount of the
         Outstanding Securities of any series, the consent of whose Holders is
         required for any such supplemental indenture, or the consent of whose
         Holders is required for any waiver (of compliance with certain
         provisions of this Indenture or certain defaults hereunder and their
         consequences) provided for in this Indenture, or

                  (3) change any obligation of the Company to maintain an office
         or agency in the places and for the purposes specified in SECTION 1002,
         or

                  (4) modify any of the provisions of this Section, SECTION 513
         OR SECTION 1006, except to increase any such percentage or to provide
         that certain other provisions of this Indenture cannot be modified or
         waived without the consent of the Holder of each Outstanding Security
         affected thereby; provided, however, that this clause shall not be
         deemed to require the consent of any Holder with respect to changes in
         the references to "the Trustee" and concomitant changes in this Section
         and SECTION 901, or deletion of this proviso, in accordance with the
         requirements of SECTIONS 611 AND 901(7).

         A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of the Holders of Securities of such series with

                                       44
<PAGE>

respect to such covenant or other provision, shall be deemed not to affect the
rights under this Indenture of the Holders of Securities of any other series.

         It shall not be necessary for any Act of Holders of Securities under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.

Section 903. Execution of Supplemental Indentures.

         In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to SECTION 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's owner's rights, duties or immunities under this Indenture or
otherwise.

Section 904. Effect of Supplemental Indentures.

         Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.

Section 905. Conformity with Trust Indenture Act.

         Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.

Section 906. Reference in Securities to Supplemental Indentures.

         Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.

                                  ARTICLE TEN

                                    COVENANTS

Section 1001. Payment of Principal, Premium and Interest.

         The Company covenants and agrees for the benefit of Holders of each
series of Securities that it will duly and punctually pay the principal of and
any premium and interest on the Securities of that series in accordance with the
terms of the Securities and this Indenture.

                                       45
<PAGE>

Section 1002. Maintenance of Office or Agency.

         The Company will maintain in each Place of Payment for any series an
office or agency where Securities of that series may be presented or surrendered
for payment, where Securities of that series may be surrendered for registration
of transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities of that series and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of any such office or agency. If at any time the Company
shall fail to maintain any such required office or agency in respect of any
series of Securities or shall fail to furnish the Trustee with the address
thereof, such presentations and surrenders of Securities of that series may be
made and notices and demands may be made or served at the Corporate Trust Office
of the Trustee, and the Company hereby appoints the same as its agent to receive
such respective presentations, surrenders, notices and demands. The Company may
also from time to time designate one or more other offices or agencies where the
Securities of one or more series may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in each Place of
Payment for Securities of any series for such purposes. The Company will give
prompt written notice to the Trustee of any such designation or rescission and
of any change in the location of any such other office or agency.

Section 1003. Money for Securities Payments to be Held in Trust.

         If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of or any premium or interest on any of the Securities of that series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal and any premium or interest so becoming due
until such sums shall be paid to such Persons or otherwise disposed of as herein
provided and will promptly notify the Trustee of its action or failure so to
act.

         Whenever the Company shall have one or more Paying Agents for any
series of Securities, it will, prior to each due date of the principal of or any
premium or interest on any Securities of that series, deposit with a Paying
Agent a sum sufficient to pay the principal and any premium or interest so
becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal, premium or interest, and (unless such Paying Agent
is the Trustee) the Company will promptly notify the Trustee of its action or
failure so to act.

         The Company will cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will (1) comply with the provisions of
the Trust Indenture Act applicable to it as a Paying Agent and (2) during the
continuance of any default by the Company (or any other obligor upon the
Securities of that series) in the making of any payment in respect of the
Securities of that series, upon the written request of the Trustee, forthwith
pay to the Trustee all sums held in trust by such Paying Agent for payment in
respect of the Securities of that series.

                                       46
<PAGE>

         The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.

         Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of or any premium or
interest on any Security of any series and remaining unclaimed for two years
after such principal and any premium or interest has become due and payable
shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in an Authorized Newspaper in
each Place of Payment, notice that such money remains unclaimed and that, after
a date specified therein, which shall not be less than 30 days from the date of
such publication, any unclaimed balance of such money then remaining will be
repaid to the Company.

Section 1004. Statement by Officers as to Default.

         The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company ending after the date hereof, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and, if the Company shall be
in default, specifying all such defaults and the nature and status thereof of
which they may have knowledge. The Company shall deliver to the Trustee, as soon
as reasonably practicable and in any event within 20 days after the Company
becomes aware of the occurrence of any Event of Default or an event which, with
notice or the lapse of time or both, would constitute an Event of Default, an
Officers' Certificate setting forth the details of such Event of Default or
default.

Section 1005. Existence.

         Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence,
rights (charter and statutory) and franchises; provided, however, that the
Company shall not be required to preserve any such right or franchise if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the ability of the
Company to make payments hereunder.

                                       47
<PAGE>

Section 1006. Waiver of Certain Covenants.

         Except as otherwise specified as contemplated by SECTION 301 for
Securities of such series and as contemplated by SECTION 508, the Company may,
with respect to the Securities of any series, omit in any particular instance to
comply with any term, provision or condition set forth in this Indenture for the
benefit of the Holders of such series if before the time for such compliance the
Holders of at least 50% in principal amount of the Outstanding Securities of
such series shall, by Act of such Holders, either waive such compliance in such
instance or generally waive compliance with such term, provision or condition,
but no such waiver shall extend to or affect such term, provision or condition
except to the extent so expressly waived, and, until such waiver shall become
effective, the obligations of the Company and the duties of the Trustee in
respect of any such term, provision or condition shall remain in full force and
effect.

Section 1007. Additional Amounts.

         If the Securities of a series provide for the payment of additional
amounts, the Company will pay to the Holder of any Security of such series
additional amounts as provided therein. Whenever in this Indenture there is
mentioned, in any context, the payment of the principal of or any premium or
interest on, or in respect of, any Security of any series or the net proceeds
received on the sale or exchange of any Security of any series, such mention
shall be deemed to include mention of the payment of additional amounts provided
for in this Section to the extent that, in such context, additional amounts are,
were or would be payable in respect thereof pursuant to the provisions of this
Section and express mention of the payment of additional amounts (if applicable)
in any provisions hereof shall not be construed as excluding additional amounts
in those provisions hereof where such express mention is not made.

         If the Securities of a series provide for the payment of additional
amounts, at least 10 days prior to the first Interest Payment Date with respect
to that series of Securities (or if the Securities of that series will not bear
interest prior to Maturity, the first day on which a payment of principal and
any premium is made), and at least 10 days prior to each date of payment of
principal and any premium or interest if there has been any change with respect
to the matters set forth in the below-mentioned Officers' Certificate, the
Company will furnish the Trustee and the Company's principal Paying Agent or
Paying Agents, if other than the Trustee, with an Officers' Certificate
instructing the Trustee and such Paying Agent or Paying Agents whether such
payment of principal of and any premium or interest on the Securities of that
series shall be made to Holders of Securities of that series who are United
States Aliens without withholding for or on account of any tax, assessment or
other governmental charge described in the Securities of that series. If any
such withholding shall be required, then such Officers' Certificate shall
specify by country the amount, if any, required to be withheld on such payments
to such Holders of Securities and the Company will pay to the Trustee or such
Paying Agent the additional amounts required by this Section. The Company
covenants to indemnify the Trustee and any Paying Agent for, and to hold them
harmless against, any loss, liability or expense reasonably incurred without
negligence or bad faith on their part arising out of or in connection with
actions taken or omitted by any of them in reliance on any Officers' Certificate
furnished pursuant to this Section.

                                       48
<PAGE>

                                 ARTICLE ELEVEN

                            REDEMPTION OF SECURITIES

Section 1101. Applicability of Article.

         Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by SECTION 301 for such Securities) in
accordance with this Article.

Section 1102. Election to Redeem; Notice to Trustee.

         The election of the Company to redeem any Securities shall be evidenced
by a Board Resolution or in another manner specified as contemplated by SECTION
301 for such Securities. In case of any redemption at the election of the
Company of less than all the Securities of any series (including any such
redemption affecting only a single Security), the Company shall, at least 60
days prior to the Redemption Date fixed by the Company (unless a shorter notice
shall be satisfactory to the Trustee), notify the Trustee of such Redemption
Date, of the principal amount of Securities of such series to be redeemed and,
if applicable, of the tenor of the Securities to be redeemed (unless all of the
Securities of a specified tenor are to be redeemed). In the case of any
redemption of Securities (i) prior to the expiration of any restriction on such
redemption provided in the terms of such Securities or elsewhere in this
Indenture, or (ii) pursuant to an election of the Company which is subject to a
condition specified in the terms of such Securities, the Company shall furnish
the Trustee with an Officers' Certificate evidencing compliance with such
restriction or condition.

Section 1103. Selection by Trustee of Securities to be Redeemed.

         If less than all the Securities of any series are to be redeemed
(unless all the Securities of such series and of a specified tenor are to be
redeemed or unless such redemption affects only a single Security), the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of portions (equal to the minimum authorized denomination for
Securities of that series or any integral multiple thereof) of the principal
amount of Securities of such series of a denomination larger than the minimum
authorized denomination for Securities of that series or of the principal amount
of global securities of such series. If less than all of the Securities of such
series and of a specified tenor are to be redeemed, the particular Securities to
be redeemed shall be selected not more than 60 days prior to the Redemption Date
by the Trustee, from the Outstanding Securities of such series and specified
tenor not previously called for redemption in accordance with the preceding
sentence.

         The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption as aforesaid and, in case of any Securities
selected for partial redemption as aforesaid, the principal amount thereof to be
redeemed.

                                       49
<PAGE>

         The provisions of the two preceding paragraphs shall not apply with
respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security.

         For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.

Section 1104. Notice of Redemption.

         Notice of redemption shall be given in the manner provided in SECTION
106 to the Holders of Securities to be redeemed not less than 30 nor more than
60 days prior to the Redemption Date.

         All notices of redemption shall state:

                  (1) the Redemption Date,

                  (2) the Redemption Price,

                  (3) if less than all the Outstanding Securities of any series
         consisting of more than a single Security are to be redeemed, the
         identification (and, in the case of partial redemption of any such
         Securities, the principal amounts) of the particular Securities to be
         redeemed and, if less than all the Outstanding Securities of any series
         consisting of a single Security are to be redeemed, the principal
         amount of the particular Security to be redeemed,

                  (4) that on the Redemption Date the Redemption Price will
         become due and payable upon each such Security to be redeemed and, if
         applicable, that interest thereon will cease to accrue on and after
         said date,

                  (5) the place or places where such Securities are to be
         surrendered for payment of the Redemption Price,

                  (6) that the redemption is for a sinking fund, if such is the
         case, and

                  (7) applicable CUSIP numbers, if any.

         A notice of redemption published as contemplated by SECTION 106 need
not identify particular registered Securities to be redeemed.

         Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall be irrevocable.

                                       50
<PAGE>

Section 1105. Deposit of Redemption Price.

         Prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in SECTION 1003) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on, all the Securities
which are to be redeemed on that date.

Section 1106. Securities Payable on Redemption Date.

         Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; provided, however, that, unless otherwise specified as
contemplated by SECTION 301, installments of interests on Securities whose
Stated Maturity is on or prior to the Redemption Date shall be payable to the
Holders of such Securities, or one or more Predecessor Securities, registered as
such at the close of business on the relevant Record Dates according to their
terms and the provisions of SECTION 307.

         If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium shall, until
paid, bear interest from the Redemption Date at the rate prescribed therefor in
the Security.

Section 1107. Securities Redeemed in Part.

         Any Security which is to be redeemed only in part shall be surrendered
at a Place of Payment therefor (with, if the Company or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities of the same series and of like tenor, of
any authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.

Section 1108. Purchase of Securities.

         Unless otherwise specified as contemplated by SECTION 301, the Company
and any Affiliate of the Company may at any time purchase or otherwise acquire
Securities in the open market or by private agreement. Such acquisition shall
not operate as or be deemed for any purpose to be a redemption of the
indebtedness represented by such Securities. Any Securities purchased or
acquired by the Company may be delivered to the Trustee and, upon such delivery,
the indebtedness represented thereby shall be deemed to be satisfied. SECTION
309 shall apply to all Securities so delivered.

                                       51
<PAGE>

                                 ARTICLE TWELVE

                                  SINKING FUNDS

Section 1201. Applicability of Article.

         The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of any series except as otherwise specified as
contemplated by SECTION 301 for such Securities.

         The minimum amount of any sinking fund payment provided for by the
terms of any Securities is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by the
terms of such Securities is herein referred to as an "optional sinking fund
payment". If provided for by the terms of any Securities, the cash amount of any
sinking fund payment may be subject to reduction as provided in SECTION 1202.
Each sinking fund payment shall be applied to the redemption of Securities as
provided for by the terms of such Securities.

Section 1202. Satisfaction of Sinking Fund Payments with Securities.

         The Company (1) may deliver Outstanding Securities of a series (other
than any previously called for redemption) and (2) may apply as a credit
Securities of a series which have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking fund
payment with respect to any Securities of such series required to be made
pursuant to the terms of such Securities as and to the extent provided for by
the terms of such Securities; provided that the Securities to be so credited
have not been previously so credited. The Securities to be so credited shall be
received and credited for such purpose by the Trustee at the Redemption Price,
as specified in the Securities so to be redeemed, for redemption through
operation of the sinking fund and the amount of such sinking fund payment shall
be reduced accordingly.

Section 1203. Redemption of Securities for Sinking Fund.

         Not less than 45 days prior (unless a shorter period shall be
satisfactory to the Trustee) to each sinking fund payment date for any
Securities, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for such
Securities pursuant to the terms of such Securities, the portion thereof, if
any, which is to be satisfied by payment of cash and the portion thereof, if
any, which is to be satisfied by delivering and crediting Securities pursuant to
SECTION 1202 and will also deliver to the Trustee any Securities to be so
delivered. The Trustee shall select any Securities to be redeemed upon such
sinking fund payment date in the manner specified in SECTION 1103 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Company in the manner provided in SECTION 1104. Such notice having been
duly given, the redemption of such Securities shall be made upon the terms and
in the manner stated in SECTIONS 1106 AND 1107.

                                       52
<PAGE>

                                ARTICLE THIRTEEN

                    LEGAL DEFEASANCE AND COVENANT DEFEASANCE

Section 1301. Company's Option to Effect Legal Defeasance or Covenant
Defeasance.

         The Company may at its option, at any time elect to have either SECTION
1302 OR SECTION 1303 applied to the Outstanding Securities of any series upon
compliance with the conditions set forth below in this ARTICLE THIRTEEN.

Section 1302. Legal Defeasance and Discharge.

         Upon the Company's exercise of the option provided in SECTION 1301
applicable to this Section, the Company shall be deemed to have been discharged
from its obligations with respect to the Outstanding Securities of any series on
the date the conditions set forth below are satisfied (hereinafter, "LEGAL
DEFEASANCE"). For this purpose, such legal defeasance means that the Company
shall be deemed to have paid and discharged the entire indebtedness represented
by the Outstanding Securities of such series and to have satisfied all its other
obligations under the Securities of such series and this Indenture insofar as
the Securities of such series are concerned (and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging the same), except
for the following which shall survive until otherwise terminated or discharged
hereunder: (A) the rights of Holders of the Securities of such series to
receive, solely from the trust fund described in SECTION 1304 and as more fully
set forth in such Section, payments in respect of the principal of and any
premium and interest on the Securities of such series when such payments are
due, (B) the Company's obligations with respect to such Securities under
SECTIONS 304, 305, 306, 1002 AND 1003, (C) the rights, powers, trusts, duties
and immunities of the Trustee hereunder and (D) this ARTICLE THIRTEEN. Subject
to compliance with this Article Thirteen, the Company may exercise its option
under this SECTION 1302 notwithstanding the prior exercise of its option under
SECTION 1303.

Section 1303. Covenant Defeasance.

         Upon the Company's exercise of the option provided in SECTION 1301
applicable to this Section, (i) the Company shall be released from its
obligations with respect to the Securities of such series under SECTION 801,
SECTIONS 1006 THROUGH 1007, inclusive, and any covenants provided pursuant to
SECTION 301 for the benefit of the Holders of such Securities (to the extent so
provided pursuant to SECTION 301) and (ii) the occurrence of an event specified
in SECTIONS 501(3) OR (4) shall not be deemed to be an Event of Default on and
after the date the conditions set forth below are satisfied (hereinafter,
"COVENANT DEFEASANCE"). For this purpose, such covenant defeasance means that
the Company may omit to comply with and shall have no liability in respect of
any term, condition or limitation set forth in any such Section or clause
whether directly or indirectly by reason of any reference elsewhere herein to
any such Section or clause or by reason of any reference in any such Section or
clause to any other provision herein or in any other document, but the remainder
of this Indenture and such Securities shall be unaffected thereby.

                                       53
<PAGE>

Section 1304. Conditions to Legal Defeasance or Covenant Defeasance.

         The following shall be the conditions to application of either SECTION
1302 or SECTION 1303 to the then Outstanding Securities of any series:

                  (1) The Company shall irrevocably have deposited or caused to
         be deposited with the Trustee (or another trustee satisfying the
         requirements of SECTION 609 who shall agree to comply with the
         provisions of this Article Thirteen applicable to it) as trust funds in
         trust for the purpose of making the following payments specifically
         pledged as security for, and dedicated solely to, the benefit of the
         Holders of the Securities of such series, (A) money in an amount, or
         (B) Government Obligations which through the scheduled payment of
         principal and interest in respect thereof in accordance with their
         terms will provide, not later than one day before the due date of any
         payment, money in an amount, or (C) a combination thereof, sufficient,
         in the opinion of a nationally recognized firm of independent public
         accountants or a nationally recognized investment banking firm
         expressed in a written certification thereof delivered to the Trustee,
         (if such firms at such time customarily deliver such certifications,
         and, if not, such certification may be from the principal financial
         officer of the Company), to pay and discharge, and which shall be
         applied by the Trustee (or other qualifying trustee) to pay and
         discharge, the principal of, premium, if any, and each installment of
         interest on the Securities on the Stated Maturity of such principal or
         installment of interest in accordance with the terms of this Indenture
         and of the Securities of such series. For this purpose, "GOVERNMENT
         OBLIGATIONS" means, with respect to any series of Securities,
         securities that are (x) direct obligations of the government that
         issued the currency in which such series is denominated (or, if such
         series is denominated in euro, the direct obligations of any government
         that is a member of the European Monetary Union) for the payment of
         which its full faith and credit is pledged or (y) obligations of a
         Person controlled or supervised by and acting as an agency or
         instrumentality of such government the payment of which is
         unconditionally guaranteed as a full faith and credit obligation by
         such government, which, in either case, are not callable or redeemable
         at the option of the issuer thereof and shall also include a depositary
         receipt issued by a bank (as defined in Section 3(a)(2) of the
         Securities Act) as custodian with respect to any Government Obligation
         where the relevant government is the United States of America or a
         specific payment of principal of or interest on any such Government
         Obligation held by such custodian for the account of the holder of such
         depositary receipt, provided that (except as required by law) such
         custodian is not authorized to make any deduction from the amount
         payable to the holder of such depository receipt from any amount
         received by the custodian in respect of such Government Obligation or
         the specific payment of principal of or interest on such Government
         Obligation evidenced by such depository receipt.

                  (2) In the event of an election to have SECTION 1302 apply to
         any Securities or any series of Securities, as the case may be, the
         Company shall have delivered to the Trustee an Opinion of Counsel
         stating that (x) the Company has received from, or there has been
         published by, the Internal Revenue Service a ruling, or (y) since the
         date of this Indenture there has been a change in the applicable
         Federal income tax law, in either case to the effect that, and based
         thereon such opinion shall confirm that, the Holders of the Outstanding
         Securities of such series will not recognize gain or loss for Federal
         income

                                       54
<PAGE>

         tax purposes as a result of such deposit, defeasance and discharge and
         will be subject to Federal income tax on the same amount, in the same
         manner and at the same times as would have been the case if such
         deposit, defeasance and discharge had not occurred.

                  (3) In the event of an election to have SECTION 1303 apply to
         any Securities or any series of Securities, as the case may be, the
         Company shall have delivered to the Trustee an Opinion of Counsel to
         the effect that the Holders of the Outstanding Securities of such
         series will not recognize gain or loss for Federal income tax purposes
         as a result of such deposit and covenant defeasance and will be subject
         to Federal income tax on the same amount, in the same manner and at the
         same times as would have been the case if such deposit and covenant
         defeasance had not occurred.

                  (4) The Company shall have delivered to the Trustee an
         Officers' Certificate and an Opinion of Counsel, together stating that
         all conditions precedent provided for relating to either the legal
         defeasance under SECTION 1302 or the covenant defeasance under SECTION
         1303 (as the case may be) have been complied with.

                  (5) Such legal defeasance or covenant defeasance shall not
         result in the trust arising from such deposit constituting an
         investment company as defined in the Investment Company Act, or such
         trust shall be qualified under such act or exempt from regulation
         thereunder.

Section 1305. Deposited Money and Government Obligations to be Held in Trust;
Other Miscellaneous Provisions.

         Subject to the provisions of the last paragraph of SECTION 1003, all
money and Government Obligations (including the proceeds thereof) deposited with
the Trustee (or other qualifying trustee (solely for purposes of this Section
and SECTION 1306, the Trustee and any such other trustee are referred to
collectively, for purposes of this SECTION 1305, as the "TRUSTEE") pursuant to
SECTION 1304 in respect of the Securities of such series shall be held in trust
and applied by the Trustee, in accordance with the provisions of such Securities
of such series and this Indenture, to the payment, either directly or through
any Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Holders of the Securities of such series, of all
sums due and to become due thereon in respect of principal (and premium, if any)
and interest, but such money need not be segregated from other funds except to
the extent required by law.

         The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the Government Obligations deposited
pursuant to SECTION 1304 or the principal and interest received in respect
thereof other than any such tax, fee or other charge which by law is for the
account of the Holders of the Outstanding Securities.

         Anything in this Article Thirteen to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or Government Obligations held by it as provided in SECTION
1304 which, in the opinion of a nationally recognized firm of independent public
accountants (or a nationally recognized investment banking firm or the principal
financial officer of the Company, as appropriate) expressed in a written
certification thereof delivered to the Trustee,

                                       55
<PAGE>
are in excess of the amount thereof which would then be required to be deposited
to effect an equivalent legal defeasance or covenant defeasance.

Section 1306. Reinstatement.

         If the Trustee or the Paying Agent is unable to apply any money in
accordance with SECTION 1302 OR 1303 by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company's obligations under this Indenture and the
Securities of such series shall be revived and reinstated as though no deposit
had occurred pursuant to this ARTICLE THIRTEEN until such time as the Trustee or

         Paying Agent is permitted to apply all such money in accordance with
SECTION 1302 or 1303; provided, however, that if the Company makes any payment
of principal of (and premium, if any) or interest on any Security following the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of the Securities of such series to receive such payment from the
money held by the Trustee or the Paying Agent.

Section 1307. Deposited Money and Government Obligations to be Held in Trust.

         Subject to the provisions of the last paragraph of SECTION 1003, all
money and Government Obligations (or other property as may be provided pursuant
to SECTION 301) (including the proceeds thereof) deposited with the Trustee
pursuant to SECTION 1304 in respect of any Securities of any series shall be
held in trust and applied by the Trustee, in accordance with the provisions of
such Securities and this Indenture, to the payment, either directly or through
any Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Holders of such Securities of all sums due and to
become due thereon in respect of principal, premium, if any, and interest, if
any, but such money need not be segregated from other funds except as provided
herein and except to the extent required by law.

                                ARTICLE FOURTEEN

                        MEETING OF HOLDERS OF SECURITIES

Section 1401. Purposes for which Meetings may be Called.

         A meeting of Holders of Securities of any or all series of Securities
may be called at any time and from time to time pursuant to this Article to
make, give or take any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be made, given to
or taken by Holders of Securities of such series.

Section 1402. Call, Notice and Place of Meetings.

                           (a) The Trustee may at any time call a meeting of
                  Holders of Securities of any series for any purposes specified
                  in SECTION 1401, to be held at any such time and at such place
                  in the Borough of Manhattan, the City of New York, as the
                  Trustee shall determine. Notice of every meeting of Holders of
                  Securities of any series, setting forth the time and the place
                  of such meeting and in general terms the action proposed to be
                  taken at such meeting, shall be given, in

                                       56
<PAGE>

                  the manner provided in SECTION 106, not less than 21 nor more
                  than 180 days prior to the date fixed for the meeting.

                           (b) In case at any time the Company, pursuant to a
                  Board Resolution, or the Holders of at least 10% in principal
                  amount of the Outstanding Securities of any series shall have
                  requested the Trustee to call a meeting of the Holders of
                  Securities of such series for any purpose specified in SECTION
                  1401, by written request setting forth in reasonable detail
                  the action proposed to be taken at the meeting, and the
                  Trustee shall not have made the first publication of the
                  notice of such meeting within 21 days after receipt of such
                  request or shall not thereafter proceed to cause the meeting
                  to be held as provided herein, then the Company or the Holders
                  of Securities of such series in the amount above specified, as
                  the case may be, may determine the time and the place in the
                  Borough of Manhattan, the City of New York for such meeting
                  and may call such meeting for such purposes by giving notice
                  thereof as provided in subsection (a) of this Section.

Section 1403. Persons Entitled to Vote at Meetings.

         Upon the calling of a meeting of Holders with respect to the Securities
of a series all or part of which are represented by a Security, a record date
shall be established for determining Holders of Outstanding Securities of such
series entitled to vote at such meeting, which record date shall be the close of
business on the day the notice of the meeting of Holders is given in accordance
with SECTION 1402. The Holders on such record date, and their designated
proxies, and only such Persons, shall be entitled to vote at such meeting of
Holders. To be entitled to vote at any meeting of Holders, a Person shall (a) be
a Holder of one or more Securities or (b) be a Person appointed by an instrument
in writing as proxy by a Holder of one or more Securities; provided, however,
that in the case of any meeting of Holders with respect to the Securities of a
series all or part of which are represented by a Security, only Holders, or
their designated proxies, of record on the record date established pursuant to
SECTION 1403 hereof shall be entitled to vote at such meeting. The only Persons
who shall be entitled to be present or to speak at any meeting of Holders shall
be the Persons entitled to vote at such meeting and their counsel and any
representatives of the Trustee and its counsel and any representatives of the
Company and its counsel.

Section 1404. Quorum; Action.

         The Persons entitled to vote a majority in principal amount of the
Outstanding Securities of a series shall constitute a quorum for a meeting of
Holders of Securities of such series; provided, however, that if any action is
to be taken at such meeting with respect to a consent or waiver which this
Indenture expressly provides may be given by the Holders of not less than 50% in
principal amount of the Outstanding Securities of a series, the Persons entitled
to vote 50% in principal amount of the Outstanding Securities of such series
shall constitute a quorum. In the absence of a quorum within 30 minutes of the
time appointed for any such meeting, the meeting shall, if convened at the
request of Holders of Securities of such series, be dissolved. In any other case
the meeting may be adjourned for a period of not less than 10 days as determined
by the chairman of the meeting prior to the adjournment of such meeting. In the
absence of a quorum at any such adjourned meeting, such adjourned meeting may be
further adjourned for a

                                       57
<PAGE>

period of not less than 10 days as determined by the chairman of the meeting
prior to the adjournment of such adjourned meeting. Notice of the reconvening of
any adjourned meeting shall be given as provided in SECTION 1402(a), except that
such notice need be given only once not less than five days prior to the date on
which the meeting is scheduled to be reconvened. Notice of the reconvening of an
adjourned meeting shall state expressly the percentage, as provided above, of
the principal amount of the Outstanding Securities of such series which shall
constitute a quorum.

         Except as limited by the proviso to the first paragraph of SECTION 902,
any resolution presented to a meeting or adjourned meeting duly reconvened at
which a quorum is present as aforesaid may be adopted by the affirmative vote of
the Holders of a majority in principal amount of the Outstanding Securities of
that series; provided, however, that, except as limited by the proviso to the
first paragraph of SECTION 902, any resolution with respect to any consent or
waiver which this Indenture expressly provides may be given by the Holders of
not less than 50% in principal amount of the Outstanding Securities of a series
may be adopted at a meeting or an adjourned meeting duly convened and at which a
quorum is present as aforesaid only by the affirmative vote of the Holders of
50% in principal amount of the Outstanding Securities of that series; and
provided, further, that, except as limited by the proviso to the first paragraph
of SECTION 902, any resolution with respect to any request, demand,
authorization, direction, notice, consent, waiver or other action which this
Indenture expressly provides may be made, given or taken by the Holders of a
specified percentage, which is less than a majority, in principal amount of the
Outstanding Securities of a series may be adopted at a meeting or any adjourned
meeting duly reconvened and at which a quorum is present as aforesaid by the
affirmative vote of the Holders of such specified percentage in principal amount
of the Outstanding Securities of that series.

         Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of such series and the related coupons,
whether or not present or represented at the meeting.

Section 1405. Determination of Voting Rights; Conduct and Adjournment of
Meetings.

                           (a) Notwithstanding any other provisions of this
                  Indenture, the Trustee may make such reasonable regulations as
                  it may deem advisable for any meeting of Holders of Securities
                  of a series in regard to proof of the holding of Securities of
                  such series and of the appointment of proxies and in regard to
                  the appointment and duties of inspectors of votes, the
                  submission and examination of proxies, certificates and other
                  evidence of the right to vote, and such other matters
                  concerning the conduct of the meeting as is shall deem
                  appropriate. Except as otherwise permitted or required by any
                  such regulations, the holding of Securities shall be proved in
                  the manner specified in SECTION 104 and the appointment of any
                  proxy shall be proved in the manner specified in SECTION 104
                  or by having the signature of the person executing the proxy
                  witnessed or guaranteed by any trust company, bank or banker
                  authorized by SECTION 104. Such regulations may provide that
                  written instruments appointing proxies, regular on their face,
                  may be presumed valid and genuine without the proof specified
                  in SECTION 104 or other proof.

                                       58
<PAGE>

                           (b) The Trustee shall, by an instrument in writing,
                  appoint a temporary chairman of the meeting, unless the
                  meeting shall have been called by the Company or by Holders of
                  Securities as provided in SECTION 1402(b), in which case the
                  Company or the Holders of Securities of the series calling the
                  meeting, as the case may be, shall in like manner appoint a
                  temporary chairman. A permanent chairman and a permanent
                  secretary of the meeting shall be elected by vote of the
                  Persons entitled to vote a majority in principal amount of the
                  Outstanding Securities of such series represented at the
                  meeting.

                           (c) At any meeting each Holder of a Security of such
                  series or proxy shall be entitled to one vote for each $1,000
                  principal amount of the Outstanding Securities of such series
                  held or represented by him; provided, however, that no vote
                  shall be cast or counted at any meeting in respect of any
                  Security challenged as not Outstanding and ruled by the
                  chairman of the meeting to be not Outstanding. The chairman of
                  the meeting shall have no right to vote, except as a Holder of
                  a Security of such series or proxy.

                           (d) Any meeting of Holders of Securities of any
                  series duly called pursuant to SECTION 1402 at which a quorum
                  is present may be adjourned from time to time by Persons
                  entitled to vote a majority in principal amount of the
                  Outstanding Securities of such series represented at the
                  meeting; and the meeting may be held as so adjourned without
                  further notice.

Section 1406. Counting Votes and Recording Action of Meetings.

         The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Securities of such series or of
their representatives by proxy and the principal amounts and serial numbers of
the Outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record, at least in
duplicate, of the proceedings of each meeting of Holders of Securities of any
series shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in SECTION 1402 and, if
applicable, SECTION 1404. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company, and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.

         This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.

                                       59
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the day and year first above written.

                                               GREY WOLF INC.

                                               By:
                                                  -----------------------------
                                               Name:
                                                    ---------------------------
                                               Title:
                                                     --------------------------

                                               [TRUSTEE]

                                               By:
                                                  -----------------------------
                                               Name:
                                                    ---------------------------
                                               Title:
                                                     --------------------------

                                       60

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