Document:

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                                                                    EXHIBIT 10.3

                                 April 23, 2002

David McCall, Director
USWA District 1
777 Dearborn Park Lane
Suite J
Columbus, OH 43085

Dear Director McCall:

                Re: Acquisition of RTI Assets; Union Right to Bid

     The following will confirm our understanding regarding the above-captioned
matter.

     KPS Special Situations Fund, L.P. ("KPS") and Pegasus Partner II, L.P.
("Pegasus") (together, the "Investors") have been considering an acquisition of
certain of the assets of Republic Technologies International, LLC ("RTI," and
the assets to be purchased, the "RTI Assets") through a newly-formed acquisition
entity ("RTI Acquisition, Inc." or "Newco").

     We hereby confirm to you that, in connection with the attached agreement
(the "Modified Successor Labor Agreement") between with the United Steelworkers
of America ("USWA" or the "Union") and Newco, the Investors will proceed to use
commercially reasonable efforts to acquire the RTI Assets on the terms described
in the Letter of Intent between the Investors and Republic dated as of April 12,
2002 (the "Letter of Agreement"), subject to all of the terms, conditions and
contingencies described in that Letter of Intent (the "Acquisition").

     Upon the closing of the Acquisition, (i) Newco will recognize the USWA (ii)
Newco will offer employment to individuals who were employees of RTI immediately
prior to the closing (including those employees who elected to retire under the
provisions RTI-USWA labor agreement in connection with the Acquisition), and
(iii) Newco and the USWA will execute and adopt the attached Modified Successor
Labor Agreement.

     Following the execution of this letter, Newco and RTI will work with the
USWA to lay the groundwork for pursuing Newco financing under the Emergency
Steel Loan Guarantee Act for following the closing of the Newco Acquisition.

     As part of our agreement to proceed with the Acquisition, the Union will
execute an agreement with Republic, by no later than 5:00 pm EDT on April 23,

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2002, that waives any rights, and releases Republic from any obligations, under
the Right to Bid Appendix of the current labor agreement between the Union and
Republic (the "Right to Bid") to the extent (and only to the extent) that the
Right to Bid creates any rights or imposes any obligations with respect to the
Letter of Intent and an acquisition substantially similar to the transaction
described in the Letter of Intent.

     Please confirm our understanding by affixing your signature in the space
provided below.

                                Sincerely yours,

                              RTI Acquisition, Inc.

                          By: /s/ Michael Psaros
                              ---------------------------
                               Michael Psaros, President

Agreed: /s/ Dave McCall
        -------------------------
        Dave McCall
        Director, District 1

Date:   April 23, 2002

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                       Modified Successor Labor Agreement

1.   Parties

     The parties to this Agreement shall be Newco (including its successors,
     assigns and affiliates, "Newco" or the "Company") and the United
     Steelworkers of America, AFL-CIO.CLC (the "USWA" or the "Union").

2.   Restatement and Modification

     The terms of the Successor Labor Agreement as outlined in Attachment 1 to
     Appendix 4 of the Modified Labor Agreement between Republic Technologies
     International, LLC ("Republic") and the USWA (the "SLA") shall be in full
     force and effect in all respects except as expressly modified herein (such
     SLA as expressly modified, the "Modified SLA" or "MSLA").

3.   Conditions to Effectiveness

     A.   This MSLA shall become effective (the "Effective Date") upon the
          closing of a Newco acquisition of certain assets of Republic that
          includes (i) an aggregate capital investment by the KPS Funds and
          Pegasus Investors of at least $50 million, (ii) opening Newco
          liquidity of at least $25 million, and (iii) the acquisition of at
          least Republic's operating assets at the Canton cast roll complex,
          Lorain, and Lackawanna.

     B.   The MSLA and all of its terms shall become effective on the Effective
          Date unless otherwise indicated in this MSLA.

4.   Revisions to the SLA

     The parties agree to modify the SLA as follows:

     a.   Institute for Career Development, as set forth in Appendix 1;

     b.   Neutrality, as set forth in Appendix 2;

     c.   Profit-sharing, as set forth in Appendix 3;

     d.   Stand Up For Steel, as set forth in Appendix 4;

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          e.   Coordinators, as set forth in Appendix 5;

          f.   Board of Directors, as set forth in Appendix 6;

          g.   Investment Commitment, as set forth in Appendix 7;

          h.   Emergency Steel Loan Guarantee Program, as set forth in Appendix
               8;

          i.   Benefit Trust, as set forth in Appendix 9;

          j.   Health Care Coverage for Laid Off Employees, as set forth in
               Appendix 10;

          k.   Rights and Protections for RTI Employees Associated with
               Non-Purchased Assets, as set forth in Appendix 11;

          l.   Successorship and Right to Bid, as set forth in Appendix 12

          m.   Other Contract Matters, as set forth in Appendix 13

     5.   Annual Contribution

          The maximum annnual contribution described in paragraph 4 of the SLA
          will be revised to $3.50 in year 3 of the contract, $3.80 in year 4 of
          the contract and $3.80 in year 5.

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                                   Appendix 1
                        Institute for Career Development

Commencing on the second anniversary of the Effective Date:

In recognition of the worldwide competitive challenges that confront the Company
and the entire work force, the United Steelworkers of America and [Newco] have
established a major new venture in training and educating workers-The
USWA/[Newco] Institute for Career Development (the "Institute")-which, in
conjunction with similar programs negotiated by the Union with various other
employers, will be administered under the rules and procedures of the Institute
for Career Development ("ICD").The purpose of the Institute is to provide
resources and support services for the education, training and personal
development of the employees of [Newco] including upgrading the basic skills and
educational levels of active employees in order to enhance their ability to
absorb craft and non-craft training, their ability to progress in the workplace,
their ability to perform their assigned work tasks to the full extent of their
potential, and their knowledge and understanding of the workplace, and of new
and innovative work systems. Further purposes include education, training and
counseling which will enable employees to have more stable and rewarding
personal and family lives, alternative carer opportunities in the event that
their steelworker careers are subject to dislocation, and long, secure and
meaningful retirements.

The Institute will be financed by a contribution from [Newco] in the amount of
$0.10 per hour worked by USWA-represented employees covered by this Agreement.
The Institute will be administered jointly by the Company and the Union in
accordance with the procedures, rules, regulations and policies as agreed to by
the parties. The parties will, of course, also seek and use funds from federal,
state and local governmental agencies.

Consistent with this understanding, it would be appropriate for the Institute to
allocate funds to certain programs that are currently being offered by [Newco]
and that are consistent with the goals and limitations of this Appendix.

Apprenticeship, craft training and training for position-rated jobs are
separately provided for in the collective bargaining agreement. The Company may,
however, contract with the Institute to provide services and resources in
support of such training.

In establishing this program USWA and [Newco] are implementing a shared vision
that workers must play a significant role in the design and development of their
jobs, their training and education, and their working environment. In a world

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economy many changes are unforeseen and unpredictable. Corporate success, worker
security and employee satisfaction all require that the work force and
individual workers be capable of reacting to change, challenge and opportunity.
This, in turn, requires ongoing training, education and growth. Experience has
shown that worker growth and development are stunted when programs are mandated
from above but flourish in an atmosphere of voluntary participation in
self-designed and self-directed, training and education. These shared beliefs
shall be the guiding principles of the Institute.

The Company agrees to continue to participate fully as a member of ICD in
accordance with policies, rules and regulations established by the ICD. The
Company's financial contributions to the Institute will continue to be
separately tracked. ICD will continue to be under the joint supervision of the
Union and participating employers with a Governing Board consisting of an equal
number of Union and employer appointees.

Reporting, Auditing, Accountability and Oversight

The following minimum requirements shall govern reporting, auditing,
accountability and oversight of the funds provided for above:

     1.    Reporting

           For each calendar quarter, and within 30 days of the close of such
           calendar quarter, the Company shall account to the ICD, the
           International President of the Union and the Union Chair of the
           Negotiating Committee for all changes in the financial condition of
           the Institute. Such reporting shall include at least the following
           information for each such quarter:

           .   The Company's contribution of $0.10 per hour for steelworker
               represented employees per quarter with cumulative balance.

           .   A detailed breakdown of actual expenditures related to approved
               program activities during said quarter.

           .   Reports shall be broken down by plant and include all
               expenditures for that site.

           .   Reports shall be made on form(s) developed by the Institute.

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           The Union Co-Chairs of each of the Local Joint Committees shall
           receive a report with the same information for their plant or local
           union, as the case may be.

     2.    Auditing

           The Company or the Union may, for good reason, request an audit of
           Company reports described above and of the underlying Institute
           activities made in accordance with the following: The Company and the
           Union shall jointly select an independent outside auditor. The
           reasonable fees and expenses of the auditor shall be paid from ICD
           funds. The scope of audits may be company-wide, plant-specific, or on
           any other reasonable basis.

     3.    Approval and Oversight

           Each year, the Local Joint Committees shall submit a proposed
           training/education plan to the Union and Company Negotiating
           Committee Chairs or their designees. Upon their approval, said plans
           shall be submitted to the Institute. The Institute must approve the
           annual plan before any expenditure in connection with any activities
           may be charged against the funds provided for in this Agreement. An
           expenditure shall not be charged against such funds until such
           expenditure is actually made.

Dispute Resolution Mechanism

Any dispute regarding the administration of the Institute at the Company or
plant level shall be subject to expedited resolution by the Company and the
Union Co-Chairs of the Negotiating Committee and the Executive Director of ICD
who shall apply the policies, rules and regulations of the Governing Board in
ruling on any such dispute. Rulings of the Executive Director on any such
dispute may be appealed to the Governing Board, but the Executive Director's
ruling shall become and remain effective unless stayed or reversed by action of
the Governing Board. Within 60 days of the effective date of this Labor
Agreement, the Union and the Company will develop such administrative procedures
as are necessary for the operation of this expedited Dispute Resolution
Mechanism, it being understood that the goal is to resolve disputes within no
more than two weeks after the Dispute Resolution Mechanism is invoked.

Nothwithstanding anything to the contrary in this provision, the Governing Board
shall not under any circumstances have any power or authority to require the

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Company to bear costs or provide funds in connection with the ICD which exceed
the Company's contribution requirements under this Appendix.

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Letter of Understanding on ICD

April 12, 2002

Mr. David R. McCall, Director
Chairman, USWA Negotiating Committee
United Steelworkers of America, District 1
777 Dearborn Park Lane, Suite J
Columbus, OH  43085

Dear Director McCall:

     This letter will confirm our understanding in connection with Appendix E,
Agreement on the Establishment and Administration of the USWA/[Newco] Institute
for Career Development, that if for any reason the USWA/[Newco] Institute for
Career Development is terminated, or if the scope of the program is modified to
the extent that all existing and committed funds are not required, the unused
contributions and commitments shall be allocated to another employee benefit
designated by the United Steelworkers of America, the choice of employee benefit
to be subject to review with and approval by the Company, such approval not to
be unreasonably withheld.

                                   Sincerely,

                                 [CEO of Newco]

CONFIRMED:

David R. McCall
Chair
Union Negotiating Committee

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                                   Appendix 2
                                   Neutrality

A.   Introduction

The Company and the United Steelworkers of America ("USWA" or "the Union") have
developed a constructive and harmonious relationship built on trust, integrity
and mutual respect. The parties place a high value in the continuation and
improvement of that relationship.

B.   Neutrality

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

Neutrality means that, except as explicitly provided herein, the Company will
not in any way, directly or indirectly, involve itself in efforts by the Union
to represent the Company's employees, or efforts by its employees to investigate
or pursue unionization.

The Company's commitments to remain neutral as outlined above shall cease if the
Company demonstrates to the Arbitrator under Section G herein that during the
course of an Organizing Campaign (as defined in C below), the Union is
intentionally or repeatedly (after having the matter called to the Union's
attention) materially misrepresenting to the employees the facts surrounding
their employment or is conducting a campaign demeaning the integrity or
character of the Company or its representatives.

C.   Organizing Procedures

Prior to the Union distributing authorization cards to non-represented employees
at a Covered Workplace (meaning any workplace which is: (i) controlled by the
Company, as the Company is defined in Section E herein; and (ii) employs or
intends to employ employees who are eligible to be represented by a labor
organization in any unit(s) appropriate for bargaining), the Union shall provide
the company with written notification (the "Written Notification") that an
organizing campaign (the "Organizing Campaign") will begin. The Written
Notification will include a description of the proposed bargaining unit.

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The Organizing Campaign shall begin immediately upon provision of Written
Notification and continue until the earliest of: (i) the Union gaining
recognition under C-5 and C-6 below; (ii) written notification by the Union that
it wishes to discontinue the Organizing Campaign; or (iii) 90 days from
provision of Written Notification to the Company.

There shall be no more than one Organizing Campaign in any 12-month period.

Upon Written Notification the following shall occur:

     1.   Notice Posting

     The Company shall post a notice on all bulletin boards at all Covered
     Workplaces where employees eligible to be represented within the proposed
     bargaining unit work and where notices are customarily posted. This notice
     shall read as follows:

                              "NOTICE TO EMPLOYEES

          We have been formally advised that the United Steelworkers of America
          is conducting an organizing campaign among certain of our employees.
          This is to advise you that:

          1.   The Company does not oppose collective bargaining or the
               unionization of our employees.

          2.   The choice of whether or not to be represented by a union is
               yours alone to make.

          3.   We will not interfere in any way with your exercise of that
               choice.

          4.   The Union will conduct its organizing effort over the next 90
               days.

          5.   In their conduct of the organizing effort, the Union and its
               representatives are prohibited from misrepresenting the facts
               surrounding your employment. Nor may they demean the integrity or
               character of the Company or its representatives.

          6.   If the Union secures a simple majority of authorization cards,
               subject to verification, of the employees in [insert description
               of bargaining unit provided by the Union] the Company shall

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          recognize the Union as the exclusive representative of such employees
          without a secret ballot election conducted by the National Labor
          Relations Board.

     7.   The authorization cards must unambiguously state that the signing
          employees desire to designate the Union as their exclusive
          representative.

     8.   Employee signatures on the authorization cards will be verified by a
          third party neutral chosen by the Company and the Union."

The amended version of this notice as described above will be posted as soon as
the Unit Determination procedure in C-3 below is completed.

In addition, following receipt of Written Notification, the Company may issue
one written communication to its employees concerning the Campaign. Such
communication shall be restricted to the issues covered in the Notice referred
to in C-1 above or raised by other terms of this Neutrality Appendix.

The communication shall be fair and factual, shall not demean the Union as an
organization nor its representatives as individuals and no reference shall be
made to any occurrence, fact or event relating to the Union or its
representatives that reflects adversely upon the Union, its representatives or
unionization.

The communication shall be provided to the Union at least two business days
prior to its intended distribution. If the Union believes that the communication
violates the strictures of this provision it shall so notify the Company.
Thereupon the parties shall immediately bring the matter to the Arbitrator who
shall issue a bench decision resolving any dispute. In no event shall the
communication be released until after the Union has been given the two days
referred to above to object, and if the Union does object, until after the
Arbitrator has ruled.

2.   Employee Lists

Within five days following Written Notification, the Company shall provide the
Union with a complete list of all of its employees in the proposed bargaining
unit who are eligible for union representation. Such list shall include each
employee's full name, home address, job title and work location. Upon the
completion of the Unit Determination procedure as

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described in C-3 below, an amended list will be provided if the proposed unit is
changed as a result of such Unit Determination procedure. Thereafter during the
Organizing Campaign, the Company will provide the Union with updated lists
monthly.

3.   Determination of Appropriate Unit

As soon as practicable following Written Notification, the parties will meet to
attempt to reach an agreement on the unit appropriate for bargaining. In the
event that the parties are unable to agree on an appropriate unit, either party
may refer the matter to the Dispute Resolution Procedure contained in Section G
below. In resolving any dispute over the scope of the unit, the Arbitrator shall
apply the principles used by the NLRB.

4.   Access to Company Facilities

During the Organizing Campaign the Company, upon written request, shall grant
reasonable access to its facilities to the Union for the purpose of distributing
literature and meeting with unrepresented Company employees. Distribution of
Union literature shall not compromise safety or production, disrupt ingress or
egress, or disrupt the normal business of the facility. Distribution of Union
literature inside Company facilities and meetings with unrepresented Company
employees inside Company facilities shall be limited to non-work areas during
non-work time.

5.   Card Check

If, at any time during an Organizing Campaign which follows the existence at a
Covered Workplace of a substantial and representative complement of employees in
any unit appropriate for collective bargaining, the Union demands recognition,
the parties will request that a mutually acceptable neutral (or the American
Arbitration Association if no agreement on a mutually acceptable neutral can be
reached) conduct a card check within five days of the making of the request. The
neutral shall compare the authorization cards submitted by the Union against
original handwriting exemplars of the entire bargaining unit furnished by the
Company and shall determine if a simple majority of eligible employees has
signed cards. The list of eligible employees shall be jointly prepared by the
Union and the Company.

6.   Union Recognition

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     If at any time during an Organizing Campaign, the Union secures a simple
     majority of authorization cards of the employees in an appropriate
     bargaining unit, the Company shall recognize the Union as the exclusive
     representative of such employees without a secret ballot election conducted
     by the National Labor Relations Board. The authorization cards must
     unambiguously state that the signing employees desire to designate the
     Union as their exclusive representative for collective bargaining purposes.
     Each card must be signed and dated during the Organizing Campaign.

D.   Hiring

     1.   The Company shall, at any Covered Workplace which it builds or
          acquires after [the effective date of this Neutrality Appendix], give
          preference in hiring to qualified employees of the Company then
          accruing continuous service in bargaining units covered by a Basic
          Labor Agreement. In choosing between qualified applicants from such
          bargaining units, the Company shall apply standards established by
          Section ___ of the Basic Labor Agreement.

          This Section D-1 shall only apply where the employer for the purposes
          of collective bargaining is or will be the Company, a Parent or an
          Affiliate (and not a Venture) provided, however, that in a case where
          a Venture will likely have an adverse impact on employment
          opportunities for then current bargaining unit employees covered by
          this Basic Labor Agreement, then this Section D-1 shall apply to such
          Venture as well.

     2.   Before implementing this provision the Company and the Union will
          decide how this preference will be applied.

     3.   In determining whether to hire any applicant at a Covered Workplace
          (whether or not such applicant is an employee covered by a Basic Labor
          Agreement), the Company shall refrain from using any selection
          procedure, which, directly or indirectly, evaluates applicants based
          on their attitudes or behavior toward unions or collective bargaining.

E.   Definitions and Scope of this Agreement

     1.   Rules with Respect to Affiliates, Parents and Ventures

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     For purposes of this appendix only, the Company includes (in addition to
     the Company) any entity which is:

     (i)  engaged in (a) the mining, refining, production, processing,
          transportation, distribution or warehousing of raw materials used in
          the making of steel; or (b) the making, finishing, processing,
          fabricating, transportation, distribution or warehousing of steel; and

     (ii) either a Parent, Affiliate or a Venture of the Company.

     For purposes of this appendix, a Parent is any entity which directly or
     indirectly owns or controls more than 50% of the voting power of the
     Company; an Affiliate is any entity in which the Company directly or
     indirectly: (a) owns more than 50% of the voting power or (b) has the power
     based on contracts or constituent documents to direct the management and
     policies of the entity; and a Venture is an entity in which the Company
     owns a material interest; provided that none of the KPS Funds, the Pegasus
     Funds, their limited partners, their portfolio companies or affiliates
     outside the Company's corporate family will deemed to be a Parent,
     Affiliate or Venture.

2.   Rules with Respect to Existing Parents, Affiliates and Ventures

     The Company agrees to cause all of its existing Parents, Affiliates and/or
     Ventures that are covered by the provisions of Section E-1 above, to become
     a party/parties to this appendix and to achieve compliance with its
     provisions.

3.   Rules with Respect to New Parents, Affiliates and Ventures

     The Company agrees that it will not consummate a transaction, the result of
     which would result in the Company having or creating: (i) a Parent, (ii) an
     Affiliate or (iii) a Venture; without ensuring that the New Parent, New
     Affiliate and/or New Venture, if covered by the provisions of Section E-1
     above, agrees to and becomes bound by this appendix.

4.   In the event that a Parent, Affiliate or Venture is not itself engaged in
     the operations described in Section E (1)(i) above, but has a Parent,
     Affiliate or Venture that is engaged in such operations, then such Parent,
     Affiliate or Venture shall be covered by all provisions of this Agreement.

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F.   Bargaining in Newly-Organized Units

Where the Union is recognized pursuant to the above procedures, the first
collective bargaining agreement applicable to the new bargaining unit will be
determined as follows:

     1.   The employer and the Union shall meet within 14 days following
          recognition to begin negotiations for a first collective bargaining
          agreement covering the new unit bearing in mind the wages, benefits,
          and working conditions in the most comparable operations of the
          Company (if any comparable operations exist), and those of unionized
          competitors to the facility in which the newly recognized unit is
          located.

     2.   If after 90 days following the commencement of negotiations the
          parties are unable to reach agreement for such a collective bargaining
          agreement, they shall submit those matters that remain in dispute to
          the Chairman of the Union Negotiating Committee and the Company's Vice
          President-Employee Relations who shall use their best efforts to
          assist the parties in reaching a collective bargaining agreement.

     3.   If after 90 days following such submission of outstanding matters, the
          parties remain unable to reach a collective bargaining agreement, the
          matter may be submitted to final offer interest arbitration in
          accordance with procedures to be developed by the parties.

     4.   If interest arbitration is invoked, it shall be a final offer package
          interest arbitration proceeding. The interest arbitrator shall have no
          authority to add to, detract from, or modify the final offers
          submitted by the parties, and the arbitrator shall not be authorized
          to engage in mediation of the dispute. The arbitrator's decision shall
          select one or the other of the final offer packages submitted by the
          parties on the unresolved issues presented to him in arbitration. The
          interest arbitrator shall select the final offer package found to be
          the more reasonable when considering (a) the negotiating guideline
          described in F-1 above, (b) any other matters agreed to by the parties
          and therefore not submitted to interest arbitration, and (c) the fact
          that the collective bargaining agreement will be a first contract
          between the parties. The decision shall be in writing and shall be
          rendered within thirty (30) days after the close of the interest
          arbitration hearing record.

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     5.   Throughout the proceedings described above concerning the negotiation
          of a first collective bargaining agreement and any interest
          arbitration that may be engaged in relative thereto, the Union agrees
          that there shall be no strikes, slowdowns, sympathy strikes, work
          stoppages or concerted refusals to work in support of any of its
          bargaining demands. The Company, for its part, likewise agrees, not to
          resort to the lockout of employees to support its bargaining position.

G.   Dispute Resolution

Any alleged violation or dispute involving the terms of this appendix may be
brought to a joint committee of one representative of each of the Company and
the Union. If the alleged violation or dispute cannot be satisfactorily resolved
by the parties, either party may submit such dispute to the Arbitrator. A
hearing shall be held within ten (10) days following such submission and the
Arbitrator shall issue a decision within five days thereafter. Such decision
shall be in writing but need only succinctly explain the basis for the findings.
All decisions by the Arbitrator pursuant to this appendix shall be based on the
terms of this appendix and the applicable provisions of the law. The
Arbitrator's remedial authority shall include the power to issue an order
requiring the Company to recognize the Union where, in all the circumstances,
such an order would be appropriate.

The Arbitrator's award shall be final and binding on the parties and all
employees covered by this appendix. Each party expressly waives the right to
seek judicial review of said award; however, each party retains the right to
seek judicial enforcement of said award.

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                                   Appendix 3
                                 Profit Sharing

1.   Introduction

     The parties agree to establish a profit sharing plan (the "Plan").

2.   Level of Payout

     The Company agrees that it will create a profit sharing pool (the "Pool")
     consisting of fifteen percent (15%) of the Company's Quarterly Pre-Tax
     Profits, as defined below, and to distribute the Pool within 45 days of the
     end of each fiscal quarter, in the manner described below.

3.   Calculation of Profits

     For the purposes of this Plan, Quarterly Profits shall be defined as the
     excess of (A) Pre-Tax Income over (B) the Threshold, where:

     A.   Pre-Tax Income is Earnings Before Taxes ("EBT")* of the Company
          calculated on a consolidated basis in accordance with United States
          Generally Accepted Accounting Policies ("GAAP") with the following
          exclusions:

          1.   Income or loss related to any charges or credits (whether or not
               identified as special credits or charges) for unusual,
               infrequently occurring or extraordinary items, including credits
               or charges for plant closures, business dispositions and asset
               sales that are not normal operating charges or credits of the
               Company under internal Company accounting policies consistently
               applied (but excluding any charge representing a cash expense
               incurred by the Company in connection with the Company's planned
               asset re-configuration in the 12 months following the closing of
               the transaction);

          2.   Any cost or expense associated with the Plan or any other profit
               sharing or similar plan for any of the Company's employees; and

_____________________

* i.e., the excess of GAAP net income over GAAP provision for income taxes.

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               3.   Any management fees (in excess of expense re-imbursement)
                    actually paid to the KPS and Pegasus entities as monitoring
                    fees.

               4.   Any cash interest payments in excess of $2.5 million
                    attributable to incremental debt placed on the Company in
                    connection with a cash shareholder realization.

          and

          B.   The Threshold is $12.5 million

     4.   Individual Entitlement

          The Pool will be divided as follows:

          A.   25% of the Pool will be divided among all USWA-represented
               employees covered by the Basic Labor Agreement ("Participants")
               on the basis of the Hours (as defined below) of each such
               Participant in the calendar weeks within each fiscal quarter.

               1.   Hours shall include the following, but shall not exceed 40
                    hours for any week for any Participant. Hours worked
                    (including straight time and overtime hours), vacation and
                    holiday hours at the rate of 8 hours for each holiday or day
                    of vacation, hours on USWA business, and hours, at the rate
                    of 8 hours a day, while receiving Workers' Compensation
                    benefits (based on the number of days absent from work while
                    receiving such benefits).

               2.   Any payments made to a Participant pursuant to this Profit
                    Sharing Plan shall not be included in the Participant's
                    earnings for purposes of determining any other pay, benefit,
                    or allowance of the Participant.

          B.   75% of the Pool will be contributed to the Benefit Trust.

     5.   Administration of the Plan

          A.   The Plan will be administered by the Company in accordance with
               its terms and the costs of administration shall be the
               responsibility of the Company. Upon determination of each
               Quarterly Profit

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               calculation, such calculation shall be forwarded to the Chair of
               the Union Negotiating Committee accompanied by a Certificate of
               Officer signed by the Chief Financial Officer of the Company,
               providing a detailed description of any adjustments made to
               Earnings Before Taxes and stating that EBT was determined in
               accordance with GAAP and that Quarterly Profit was calculated in
               accordance with this Appendix.

          B.   The Union, through its Negotiating Committee Chair or his/her
               designee, shall have the right to review and audit any
               information, calculation or other matters concerning the Plan.
               The Company shall provide said designee with any information
               reasonably requested in connection with such review. The
               reasonable actual costs incurred by the Union in connection with
               any such audit shall be paid from the Pool and deducted from the
               amount otherwise available under the Pool for distribution to
               employees.

          C.   In the event that a discrepancy exists between the Company's
               Profit Sharing calculation and the results obtained by the Union
               designee's review, the Company Chair and the Union Chair of the
               respective Negotiating Committees shall attempt to reach an
               agreement regarding the discrepancy. In the event that they
               cannot resolve the dispute, either party may submit such dispute
               to final and binding arbitration under the Grievance Procedure
               outlined in the Basic Labor Agreement.

     6.   Prompt Payment

          Notwithstanding the above, the Company shall comply with the
          requirements of paragraph's 2-4 above based on its interpretation of
          the appropriate payout. If the process described in paragraph 5 above
          results in a requirement for an additional payout, said payout shall
          be made no more than 14 days after the date of agreed resolution or
          issuance of the Arbitrator's award.

     7.   Summary Description

          The parties will jointly develop a description of the calculations
          used to derive profit sharing payments under the Plan for each quarter
          and distribute same to each Participant.

                                       18

<PAGE>

                                   Appendix 4
                               Stand Up For Steel

     1.   The Company agrees to join the Stand Up For Steel Coalition ("SUFS")
          as of the second anniversary of the Effective Date and subject to the
          Annual Program Cost.

     2.   The parties agree that SUFS will serve as a focal point of their joint
          activities in combating unfair trade in steel and related products and
          other subjects as agreed to by the parties. The parties will continue
          to pursue other activities separately as appropriate and the funding
          and structure contemplated herein shall not be applicable to
          litigation to enforce the nation's trade laws.

     3.   The Company will contribute $0.075 per ton shipped (other than tubular
          rounds) commencing on the second anniversary of the Effective Date up
          to maximum of $100,000 per contract year.

     4.   SUFS will have a Governing Board consisting of an equal number of
          Union and Company representatives. The Board will be co-chaired by the
          USWA International President and a CEO selected by the participating
          companies.

     5.   The parties will jointly recruit all American steel (carbon and
          stainless) and iron ore companies and others to join the organization
          under the terms described herein. The Company agrees to work with the
          other participating companies so that the company representatives on
          the Governing Board will represent the interest of all participating
          companies.

     6.   All activities conducted under the banner of Stand Up For Steel shall
          be approved by the Governing Board.

                                       19

<PAGE>

                                   Appendix 5
                                  Coordinators

     Effective on the second anniversary of the Effective Date:

     In this MSLA the parties have committed themselves to a number of joint
     undertakings crucial to the success of the Company, its employees, and the
     Union. In recognition of the crucial role being served by the Union in
     accomplishing the joint goals of the parties, the parties agree as follows:

          A.   The Union Chair of the Negotiating Committee shall select and
               direct two (2) Coordinators who shall be responsible throughout
               the Company for implementation and ongoing monitoring of joint
               undertakings of mutual interest to the Company and the Union as
               well as adminstration of the labor and benefits agreements. It is
               expected that Coordinators will visit each of the Company's
               locations on a regular basis in the performance of his/her
               duties.

          B.   Each Coordinator shall be an employee of the Company. The
               Coordinator shall be compensated by the Company in the amount of
               the appropriate wages, benefits and other fringe benefits s/he
               would have earned during their normal course of employment with
               the Company, but for this assignment. In addition, each
               Coordinator shall be reimbursed for reasonable out-of-pocket
               expenses including, but not limited to, travel (coach airfare,
               hotel and per diem) incurred in connection with this assignment.
               In order to receive such lost time payments and expense
               reimbursements supporting vouchers must be provided by the
               Coordinator.

          C.   The Company's annual costs under this Appendix will be capped at
               $150,000 per year.

                                       20

<PAGE>

                                   Appendix 6
                               Board of Directors

The Company agrees to issue to the Union preferred stock on the Effective Date
as described below.

                            Series A Preferred Stock

Issuer             The Company.

Security           One share of preferred stock.

Holder             United Steelworkers of America, AFL-CIOo CLC ("USWA"), or a
                   successor labor organization to the USWA.

Election           The Holder will maintain the right to elect, remove and
of Directors       replace one (1) member of the Issuer Board of Directors from
                   the Effective Date through the Termination Date.

Amendment          The terms of the Series A Preferred Share cannot be amended
                   without the prior written consent of the Holder.

Additional         The Company will not issue any additional shares of the
Issuance           Series A Preferred Stock.

Dividends          None.

Transferability    The Series A Preferred Share will automatically convert into
                   a single share of Issuer common stock if transferred to any
                   person or entity other than the Holder.

Termination        The date the Holder is no longer the collective bargaining
                   representative for any of the Company's employees.

                                       21

<PAGE>

                                   Appendix 7
                              Investment Commitment

The Company will not make any investment outside the steel industry without the
approval of the Union (such approval to not be unreasonably withheld).

                                       22

<PAGE>

                                   Appendix 8
                     Emergency Steel Loan Guarantee Program

The Company will vigorously pursue financing under the Emergency Steel Loan
Guarantee Program (a "Government Loan") on terms acceptable to Newco.

                                       23

<PAGE>

                                   Appendix 9
                                  Benefit Trust

Trust:

The parties will establish a Benefit Trust which will be dedicated to the
payment of certain medical, pension, welfare and life insurance benefits as set
forth herein.

Beneficiaries:

Retirees and dependents from USWA represented bargaining units of the Company
and retirees and dependents from USWA represented bargaining units of RTI and
its predecessor companies who were entitled to receive retiree insurance
benefits under the MLA.

Company Contribution:

The Company shall make the following contributions to the Benefit Trust:

     (i)    on the Effective Date: $3 million;

     (ii)   that portion of the $3.00 per hour referred to in the SLA ($3.50 per
            hour in year three of the contract, $3.80 in year four and $3.80 in
            year five) which the Union directs the Company to contribute to the
            Benefit Trust (which direction shall be provided by the Union within
            nine months of the Effective Date);

     (iii)  within 45 days of the end of calendar quarter, a Profit-Sharing
            Contribution consisting of 75% of the Pool in addition to the
            obligations outlined in (i) - (ii) above;

     (iv)   upon funds becoming available from a loan or lending facility
            secured in connection with a Government Loan, the Company shall make
            a one-time contribution to the Benefit Trust equal to two percent
            (2%) of the initial $100 million in net proceeds of the Government
            Loan plus ten percent (10%) of the net incremental liquidity created
            by net proceeds of the Government Loan in excess of $100 million.
            If, for example, Newco obtains net proceeds of a $150 million from a
            Government Loan, the Company will make a one-time contribution of $7
            million to the Benefit Trust assuming that the Company pays down it
            revolver by an incremental $50 million in connection with the
            Government Loan ($2 million in connection with

                                       24

<PAGE>

            the initial $100 million of proceeds and $5 million in connection
            with remaining $50 million of net incremental liquidity).

Review of Contributions:

Upon determination of the amount of any Company Contribution, such calculation
shall be forwarded to the Union for review. The Union shall have the right to
review and audit any information, calculation or other matter concerning the
determination of the Company Contribution. The Company shall provide the Union
with any information reasonably requested in connection with such review.

Board of Trustees:

The Benefit Trust will be governed by a Board of Trustees consisting of six
members, three appointed by the Union and three appointed by the Company. Any
disputes between or among the Trustees shall be subject to the dispute
resolution procedures established by the Trust Agreement.

The Trustees shall receive no compensation other than reimbursement for
reasonable and appropriate expenses.

Benefits:

The Board of Trustees shall determine the health care, welfare and life
insurance benefits to be provided by the assets of the Trust based upon Company
Contributions, participant contributions and investment income.

Functions of the Trustees:

The Board of Trustees shall be the plan sponsor and administrator and Named
Fiduciary of the Benefit Trust. The Trustees shall have all power and authority
provided under law for Named Fiduciaries and as specifically described in the
Trust Agreement, including, but not limited to, the management of the assets of
the Benefit Trust, the retention of such independent professionals as the
Trustees may deem necessary and appropriate and establishment and amendment of
the terms of the plan to provide health care and life insurance benefits.

Expenses:

The costs of establishing and administering the Benefit Trust shall be paid out
of the assets of the Benefit Trust.

                                       25

<PAGE>

Trust Agreement:

The parties shall adopt a mutually acceptable Trust Agreement establishing the
Benefit Trust.

                                       26

<PAGE>

                                   Appendix 10
                   Health Care Coverage for Laid Off Employees

 For the first two years following the Effective Date, Newco will provide a
 total pool of up to $550,000 for employees or former employees who are subject
 to an involuntary layoff to be allocated in a manner determined by the parties.

 In addition, Newco will fund health insurance benefits, under the terms of the
 current Republic insurance plan for active employees, for health insurance
 claims accrued and incurred, but not reported by the closing of the
 transaction, by active Republic employees who are not hired by Newco; provided,
 however, that Newco's total net financial obligation in connection with such
 claims will not exceed $2.1 million.

                                       27

<PAGE>

                                   Appendix 11
                    Rights and Protections for RTI Employees
                      Associated with Non-Purchased Assets

April 12, 2002

Mr. David R. McCall
Director
U.S.W.A., District 1
777 Dearborn Park Lane, Suite J
Columbus, OH  43085-5716

         Subject: Preferential Hiring for [NEWCO]

Dear Dave,

This is to confirm our understanding regarding the process that will be utilized
to provide preferential hiring opportunities at [NEWCO] ("the Company") for
former Republic Technologies International, LLC ("Predecessor Company")
employees. The governing principle of the parties in establishing this procedure
is to maintain the seniority rights and preferences of the RTI USWA represented
employees. The anticipated result is that the positions required by the Company
will initially be filled by hiring those employees who were displaced from those
positions with the Predecessor Company.

     (A)  Employees of the Predecessor Company will, for this purpose, be
          considered as terminated by the Predecessor Company as of the
          effective date of this MSLA, or if applicable, on the last day worked
          in conjunction with any transition operations of the Predecessor
          Company. Employees for the Company will be hired directly into
          positions as though the Company were recalling such employees from lay
          off under the terms of the Master Agreement and/or Plant Specific
          Agreement between the Predecessor Company and the United Steelworkers
          of America ("the USWA" or "the Union").

In the event no Predecessor Company employees are available on the seniority
rosters from any Predecessor Company location, hiring will be permitted for
other Predecessor Company locations in accordance with the procedures of the
Plant Transfer provisions (IJOP) of the Predecessor Company MLA, without
reference to the sixty (60) day layoff requirement.

                                       28

<PAGE>

All offers of hiring will be in writing and will be sent by certified letter to
the last address of record for the employee.

Sincerely,

____________________
NEWCO

                                              Confirmed:

                                              ___________________________
                                              David R. McCall
                                              Director
                                              USWA, District 1

                                       29

<PAGE>

                                   Appendix 12
                         Successorship and Right to Bid

The Basic Labor Agreement will contain the following successorship and right to
bid provisions (notwithstanding any language to the contrary in the SLA):

Successorship

The Company agrees that it will not sell, convey, assign or otherwise transfer
any plant or significant part thereof covered by the then existing Basic Labor
Agreement between the Company and the Union (an "Operation") to any other party
(hereinafter referred to as "Buyer") who intends to continue to operate the
Operation as the Company had, unless the following conditions have been
satisfied prior to the closing date of the sale:

     (A)  the Buyer shall have entered into an agreement with the Union
          recognizing it as the bargaining representative for the employees
          within the then existing bargaining units,

     (B)  the Buyer shall have either (i) entered into an agreement with the
          Union establishing the terms and conditions of employment or (ii)
          agreed to assume and be bound the Basic Labor Agreement as it applies
          to the Operation, in either case to be effective as of the closing
          date, and

     (C)  if requested by the Company, the Union will enter into negotiations
          with the Company on the subject of releasing and discharging the
          Company from any obligations, responsibilities and liabilities to the
          Union and the Employees and/or applicable individuals in connection
          with the sale of the Operation, except as the parties otherwise
          mutually agree.

This Article is not intended to apply to (i) any transactions solely between the
Company and any of its subsidiaries or affiliates, or its parent company
including any of its subsidiaries or affiliates; (iii) transactions involving
the sale of stock of the Company or its Parent or a merger of the Company or its
Parent or (iii) a public offering of registered securities.

                                       30

<PAGE>

Right To Bid

Section 1

Should (a) the Company decide (a "Company Decision") or (b) be presented with an
offer (an "Unsolicited Offer") to sell or otherwise transfer (other than a sale
lease-back transaction conducted purely as a financing transaction and involving
an unrelated third party): (i) a controlling interest in the corporate entity
which owns its assets (a "Controlling Interest"); or (ii) all or a portion of
its facilities ("Facilities"), (either or both, the "Assets") it will so advise
the USWA in writing and grant to the USWA the right to organize a transaction to
purchase the assets (a "Transaction").

Section 2

The Company will provide the USWA with any information needed to determine
whether it wishes to pursue a Transaction. All such information shall be subject
to an executed Confidentiality Agreement.

Section 3

The Company shall notify the USWA of the schedule and/or timetable for
consideration by the Company of any possible transaction. The Company will
provide the USWA with thirty days in which to organize an alternative
transaction and the same information provided to any other interested party.

Section 4

During the period described in Section 3 above, the Company will not any binding
agreement or contract regarding the Assets with another party (including a
letter of intent that commits the Company to a topping or break up fee) other
than procedural agreements such as a confidentiality agreement

Section 5

In the event that the USWA submits an offer within the thirty day period
described above, the Company shall not be under any obligation to accept such
offer. However, the Company shall be entitled to enter into an agreement with
regard to the Assets with an entity other than the USWA only if, in the
reasonable judgment of its Board of Directors, the non-USWA proposal is more
favorable on balance to the Company and/or its shareholders, taking into
consideration price, certainty of payment (or risk of nonpayment),
contingencies,

                                       31

<PAGE>

financial strength of the proposed purchaser, conditions precedent to closing
and other factors affecting the value of the transaction to the Company and its
shareholders.

Section 6

This agreement shall not be deemed to cover any public offering of equity or any
transactions solely between the Company and any of its subsidiaries or
affiliates, or its parent company including any of its subsidiaries or
affiliates.

Section 7

The rights granted to the USWA herein may be transferred or assigned by the USWA
to a third party (but the transferee may not thereafter transfer such right to
bid).

                                       32

<PAGE>

                                   Appendix 1
                             Other Contract Matters

 Attachments 1(F) and 1(G) to the SLA

 Attachments 1(F) and 1(G) to the SLA shall be modified to read as follows:

                          Appendix 4 - Attachment 1(F)
                         Purpose, Scope and Recognition

Section 1 -- Purpose
It is the intent and purpose of the parties hereto to set forth herein the
agreement covering rates of pay, hours of work, and conditions of employment to
be observed between the parties hereto for the Employees of the Company In the
bargaining units of the Company set forth in this Appendix.

Section 2 -- Recognition
The Union having been designated the exclusive collective bargaining
representative of the Employees of the Company as defined in this Appendix, the
Company recognizes the Union as such exclusive representative. Accordingly, the
Union makes this Agreement in its capacity as the exclusive collective
bargaining representatives of such Employees. The provisions of this Agreement
constitute the sole procedure for the processing and settlement of any claim by
an Employee or the Union of a violation by the Company of this Agreement. As the
representative of the Employees, the Union may process complaints, and
grievances through the complaint and grievance procedure, including arbitration,
in accordance with this Agreement or adjust or settle the same.

Section 3 - Coverage
In accordance with and subject to the provisions of the Labor Management
Relations Act, 1947, as amended, the Company recognizes the Union as the
exclusive bargaining agency of the production and maintenance Employees
(including all employees performing office, clerical and technical work that are
included in existing RTI/USWA bargaining units) of the Company's steel
manufacturing and finishing facilities for which units the Union is certified by
the National Labor Relations Board or may be, during the life of this Agreement,
recognized by the Company as the exclusive collective bargaining representative
of the Company for the purpose of collective bargaining in respect to rates of
pay, hours of work, and conditions of employment.

Section 4 - Employee Defined

                                       33

<PAGE>

The term "Employee," as used in this Agreement, shall mean the production and
maintenance Employees, but shall not include executives, foremen, assistant
foremen, supervisors who do not work with tools, draftsmen, timekeepers,
first-aid men and nurses and plant protection. In the plants in Stark County,
Ohio, bricklayers are similarly not included.

                          Appendix 4 - Attachment 1(G)
                                    Seniority

Section 1 - Factors Affecting
Plant continuous service shall be used for all purposes in which a measure of
continuous service is utilized.

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

     (A)  Length of continuous service;

     (B)  Ability to perform the work, and;

     (C)  Physical fitness.

Section 2- Continuous Service Record
The continuous service record of any Employee shall be determined as follows:

     (A)  Each Employee shall have such continuous service record as is shown on
          the employment records of the Company for such Employee commencing
          with the date of initial employment with the Company, and he shall
          accumulate additional continuous service in accordance with
          Subparagraph (C) below, until his continuous service record shall be
          broken in which event his continuous service record shall end and be
          canceled. For Employees who had previously been employed by the
          preceding owner of any plant, continuous service will include credit
          for all service shown on the Employee's continuous service record with
          such preceding owner as of the date of initial employment with the
          Company.

     (B)  Each new Employee and each person rehired after the cancellation of
          his continuous service record shall accumulate continuous service from
          the date of such hiring or rehiring, until his continuous service

                                       34

<PAGE>

          record is broken, in which event his continuous service record shall
          end and be canceled.

     (C)  The continuous service record of an Employee shall be considered to be
          broken so that no prior period or periods of employment shall be
          counted and his seniority shall cease in the following instances:

               (1)  Employee voluntarily quits employment;

               (2)  Employee is discharged;

               (3)  Employee fails to return to work upon expiration of an
                    approved leave of absence where forty-eight (48) hour notice
                    to return has been given by the Company to the Employee and
                    to the Union;

               (4)  Employee is absent due to either layoff or disability or
                    both which continues for more than two (2) years (however,
                    (i) for three (3) years thereafter, upon written medical
                    certification to the Company of his fitness to return to
                    duty, the Employee will be eligible for recall to any
                    position for which he is qualified which is not filled
                    pursuant to Section 4, Paragraph (A) based on his previously
                    accumulated service; and (ii) Employees unable to work due
                    to an on-duty injury shall accumulate credit for continuous
                    service until the end of the period for which statutory
                    Workers' Compensation is payable, plus thirty (30) days;

               (5)  Unauthorized absence from scheduled work for three (3)
                    consecutive working days;

               (6)  Employee fails to report for and begin work within seven (7)
                    calendar days after receipt by Employee of notice of recall
                    from layoff. Employees who are employed elsewhere will, upon
                    a request made to the Company within this period and with
                    reasonable proof of such employment, be given an additional
                    seven (7) calendar days to report for and begin work, to
                    allow the Employee to give reasonable notice to his current
                    employer.

                                       35

<PAGE>

Section 3 - Probationary Employees
New Employees and those hired after a break in continuous of service will be
regarded as probationary Employees for the first five hundred twenty (520) hours
of actual work and will receive no continuous service credit during such period.
Probationary Employees may initiate complaints under this Agreement but may be
laid off or discharged as exclusively determined by Management; provided that
this will not be used for purpose of discrimination because of race, color,
religious creed, national origin, sex, age or disability as defined under the
ADA of 1990, or because of membership in the Union. Probationary Employees
continued in the service of the Company subsequent to the first five hundred
twenty (520) hours of actual work shall receive full continuous service credit
from date of original hiring.

Section 4 - Promotion
(A)  Posting
     When the Company decides that a position needs to be filled, a notice to
     that effect will be posted by the Company for seven (7) working days in the
     Plant having the open position. Employees who apply will be considered in
     the following category order:

          (1)  the department where the vacancy exists;

          (2)  the Plant where the vacancy exists;

          (3)  All other Plants within the Company: provided, however, if there
               is no qualified Employee applicant, the Company may hire a new
               employee.

(B)  Selection
     Employees who apply under Paragraph (A) above will be awarded the vacancies
     in accordance with Section 1 of this Appendix. All promotions are subject
     to a ninety (90) day qualification period in the new job. Employees
     selected for a new job will be entitled to return to their previous job in
     the event the Company determines their performance during the qualification
     period is not satisfactory, subject to dispute resolution procedure.

(C)  Period Between Promotions
     To promote efficient and economical operations, the parties agree that
     continuity for a period of time in a position is important. Therefore, the
     following limitations shall apply to Employees applying for new jobs or
     vacancies:

                                       36

<PAGE>

          (1)  Employees who apply for a position may strike their name from the
               posting at any time during the seven (7) working day period that
               the position is posted. If an Employee leaves his name in
               consideration and is selected for a position but refuses to take
               it, he cannot apply for another position for two (2) months after
               the date on which he was selected for the position.

          (2)  If an Employee applies, is selected, and then works in the
               position, he cannot apply for another position for six (6) months
               after the date he begins working in that position, following any
               training period.

Section 5 - Temporary Vacancies
Temporary vacancies will be filled at the Company's discretion. If two (2)
Employees are equally qualified to do the work, the Company will take seniority
into consideration.

Section 6 - Temporary Transfers
In the event an Employee is temporarily transferred to a higher rated job, the
Employee shall receive the higher rate. If an Employee is temporarily
transferred to a lower rated job, the Employee shall continue to receive the
Employee's regular rate.

Section 7 - Union Officers
When Management decides that the workforce in any seniority unit in any plant is
to be reduced, the member of the plant Grievance Committee, if any, in that unit
shall, if the reduction in force continues to the point at which he would
otherwise be laid off, be retained at work and for such hours per week as may be
scheduled in the work area in which he is employed, provided he can perform the
work of the job to which he must be demoted. The intent of this provision is to
retain in active employment the plant grievance committeemen for the purpose of
continuity in the administration of the labor agreement in the interest of
Employees so long as a workforce is at work; provided that no grievance
committeeman shall be retained in employment unless work which he can perform is
available to him in the designated work area which he represents. The Local
Union shall designate and advise the Company of such area of representation.

This provision shall apply also to Employees who hold any of the following
offices in the Local Union or Unions in which the Employees of the plant are
members: President, General Grievance Committeeman, Unit Chairperson, Vice
President, Recording Secretary, Financial Secretary, and Treasurer unless
legally prohibited.

                                       37

<PAGE>

Section 8 - Continuous Service Lists
The Company shall make available to the Local Union concerned lists showing the
relative continuous service of each Employee in each seniority unit. Such lists
shall be revised by the Company from time to time, as necessary, but at least
every six (6) months, to keep them reasonably up to date. The seniority right of
individual Employees shall in no way be prejudiced by errors, inaccuracies, or
omission in such lists.

                                       38

<PAGE>

Overtime Equalization

April 12, 2002

Mr. David R. McCall
Director
U.S.W.A., District 1
777 Dearborn Park Lane, Suite J
Columbus, OH  43085-5716

         Subject: Overtime Equalization

Dear Dave:

This is to confirm our understanding regarding the process that will be utilized
for overtime distribution. It is agreed that within 30 days of the Effective
Date of the MSLA, the parties will develop procedures for the equalization of
overtime opportunities. While it is desired that such procedures be consistent
throughout the Company, it is recognized that some variations may exist from
location to location. It is agreed, however, that all such procedures will
include a requirement that participants must be qualified to perform the work
included in the overtime opportunity offered and shall provide similar standards
and criteria as are currently established under the USWA/RTI Basic Labor
Agreements.

Sincerely,

____________________
NEWCO

                                                     Confirmed:

                                                     David R. McCall
                                                     Director
                                                     USWA, District 1

                                       39

<PAGE>

Transfer Rights

April 12, 2002

Mr. David R. McCall
Director
U.S.W.A., District 1
777 Dearborn Park Lane, Suite J
Columbus, OH 43085-5716

         Subject:  Employee Movement Between
                   NEWCO and USS-Lorain Tubular

Dear Dave,

The parties agree to continue to facilitate movement of employees between the
two companies as follows:

1.   The declared shutdown of the RTI-Lorain Plant gives the RTI employees
     preference for hiring by the USS-Lorain Tubular plant, in the manner
     spelled out in the Hiring Preference provisions of the RTI Master Agreement
     and the RTI Plant Specific Agreement relative to transfers between
     RTI-Lorain and Lorain Tubular Company; as well as hiring preference by
     Newco as agreed to between the parties to this MSLA.

2.   Employees who transfer to Lorain Tubular (inter-company bid) will have a
     thirty (30) day return right. Once the thirty (30) period is completed, no
     return right or regression rights will be permitted. An employee exercising
     a "30 day voluntary return right" will not be permitted to apply for
     another inter-company transfer for a period of one (1) year following such
     event. The two step bidding procedure will be retained.

3.   In order to maintain continuity of operations, and permit training of a
     replacement, it is agreed that an employee, who is the successful bidder on
     an inter-company bid, may be retained in his then-current position for a
     period of up to ninety (90) days before being released for transfer.

4.   Employees moving between companies under this process shall maintain
     continuous service for all purposes, as if the companies had not been
     separated, except as inconsistent with relevant federal laws and
     regulations.

                                       40

<PAGE>

Sincerely,

____________________
NEWCO

                                                       Confirmed:

                                                       ________________________
                                                       David R. McCall
                                                       Director
                                                       USWA, District 1

                                       41

<PAGE>

Reinstatement from Discharge Grievances

In the event a Republic bargaining unit employee obtains an order of
reinstatement from an arbitrator in connection with a discharge grievance
pending as of the closing of the transaction, Newco will reinstate such employee
as ordered by the arbitrator as promptly as practicable but will not have any
financial liability of any form to such employee in connection with the
grievance.

Other Assumed Liabilities

Newco will assume certain accrued compensation expenses for Republic employees
hired by Newco (e.g., accrued wages, accrued vacation benefits and incurred but
not reported medical and workers compensation benefits) as described in the
provisions of the final Newco asset purchase agreement that implement Schedule
III to the Letter of Intent between Republic and RTI Acquisition, Inc. dated as
of April 23, 2002.

                                       42<PAGE>

                                                                    Exhibit 10.3

                                  SPIEGEL, INC.

                      EXECUTIVE DEFERRED COMPENSATION PLAN

                        ===============================

                            Effective January 1, 1999

<PAGE>

                                  SPIEGEL, INC.
                      EXECUTIVE DEFERRED COMPENSATION PLAN

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
<S>                                                                          <C>
1. PURPOSE .............................................................      1

2. DEFINITIONS AND CAPITALIZED TERMS ...................................      1

3. ELIGIBILITY .........................................................      4

4. DEFERRAL OF COMPENSATION ............................................      4

       4.1 Election to Defer ...........................................      4

       4.2 Date of Deferral ............................................      5

       4.3 Multiple Elections ..........................................      5

       4.4 Annual Elections ............................................      5

       4.5 No Adjustments ..............................................      5

5. DEFERRED COMPENSATION ACCOUNTS ......................................      6

       5.1 Maintenance of Accounts .....................................      6

       5.2 Interest Accruals ...........................................      6

       5.3 Investment of Unpaid Balances ...............................      6

       5.4 Company Contributions .......................................      6

       5.5 Company's General Assets ....................................      7

6. EFFECT ON ASSOCIATE BENEFITS ........................................      8

7. PAYMENT OF DEFERRED COMPENSATION ACCOUNTS ...........................      8

       7.1 Income Tax Obligations ......................................      8

       7.2 In-Service Withdrawals ......................................      8

       7.3 Termination of Employment ...................................      9

       7.4 Disability ..................................................      9

       7.5 Retirement ..................................................     10

       7.6 Death Prior to Commencement of Distributions ................     10

       7.7 Death After Commencement of Distributions ...................     10

       7.8 Withholding and Other Tax Consequences ......................     10

8. FUNDING .............................................................     11

9. NON-ALIENATION OF BENEFITS ..........................................     11

10. LIMITATION OF RIGHTS ...............................................     11

11. BEST PAYMENTS ......................................................     12

12. NOTICE UNDER WARN ..................................................     12
</TABLE>

                                       2

<PAGE>

<TABLE>

<S>                                                                          <C>
13. AMENDMENT OR TERMINATION OF PLAN ...................................     13

14. ADMINISTRATIVE PROCEDURES AND DISPUTE RESOLUTION ...................     13

       14.1 Administrative Committee ...................................     13

       14.2 Committee Organization and Procedures ......................     13

       14.3 Administrative Authority ...................................     14

       14.4 Expenses ...................................................     14

       14.5 Insurance ..................................................     14

       14.6 Claims Procedure ...........................................     15

       14.7 Appeal Procedures ..........................................     15

       14.8 Arbitration ................................................     15

       14.9 Notices ....................................................     16

       14.10 Indemnification ...........................................     17

15. MISCELLANEOUS ......................................................     17

       15.1 Alternative Acts and Times .................................     17

       15.2 Masculine and Feminine, Singular and Plural ................     17

       15.3 Governing Law and Severability .............................     18

       15.4 Facility of Payment ........................................     18

       15.5 Correction of Errors .......................................     19

       15.6 Missing Persons ............................................     19

       15.7 Status of Participants .....................................     19

       15.8 Associate and Spouse Acknowledgement .......................     20

     EXECUTION .........................................................     21
</TABLE>

                                       3

<PAGE>

                                  SPIEGEL, INC.
                      EXECUTIVE DEFERRED COMPENSATION PLAN

     The Board of Directors of Spiegel, Inc., a corporation, ("Company") has
adopted this Executive Deferred Compensation Plan ("Plan") effective January 1,
1999.

     1.   PURPOSE
          -------

          The primary purpose of the Plan is to provide deferred compensation to
a select group of management and highly compensated Associates through an
unfunded "top hat" arrangement exempt from the fiduciary, funding, vesting, and
plan termination insurance provisions of Title I and Title IV of the Associate
Retirement Income Security Act ("ERISA"). More specifically, the Company has
adopted this Plan to provide Associates with the opportunity to defer
Compensation.

     2.   DEFINITIONS AND CAPITALIZED TERMS
          ---------------------------------

          The capitalized terms, set forth in alphabetical order defined below,
are used throughout the Plan.

               (a) "Account" refers to the bookkeeping entries established and
maintained by the Company or the Administrative Committee for the purpose of
recording (i) the amounts of Compensation deferred by an Associate and Company
Contributions made by the Company under this Plan, (ii) any interest earnings or
losses with respect to those amounts, and (iii) any distributions to an
Associate or Beneficiary.

               (b) "Associate" refers to any Associate, within the meaning of
Section 3121(d) of the Code, who is highly compensated or who is a member of
management selected by the Administrative Committee to participate in this Plan.
The Administrative Committee shall determine whether an Associate is to be
considered highly compensated. Where the Administrative Committee considers
appropriate in applying the provisions of this Plan, the term Associate shall
include only persons who are Participants or Inactive Participants under Plan.

               (c) "Beneficiary" refers to the person or entity selected to
receive any portion of an Associate's Account that has not been distributed from
the Plan at the time of the Associate's death. Such designation shall be on a
form provided or approved by the Administrative Committee. In the event a
married Associate designates someone other than his or her spouse as sole,
primary Beneficiary, such initial designation or subsequent change shall be
invalid unless the spouse consents in a writing which names the designated
Beneficiary. If an

                                       1

<PAGE>

Associate fails to designate a Beneficiary or no designated Beneficiary survives
the Associate, the Administrative Committee may direct payment of benefits to
the following person or persons in the order given below:

                    the Associate's:

                    (i)   spouse,

                    (ii)  descendants, per stirpes,

                    (iii) parents,

                    (iv)  brothers and sisters, or

                    (v)   estate of the Participant.

               (d)  "Board" or "Board of Directors" refers to the Board of
Directors of the Company.

               (e)  "Change in Control" has the meaning specified in Section
280G of the Code and the regulations thereunder.

               (f)  "Code" refers to the Internal Revenue Code of 1986, as
amended from time to time.

               (g)  "Committee" or "Administrative Committee" refers to the
officers of the Company who act on behalf of the Company in discharging the
Company's duties as the Administrative Committee. Notwithstanding any other
provision of the Plan document, any member of the Administrative Committee or
any other officer or Associate of the Company who exercises discretion or
authority on behalf of the Company shall not be a fiduciary of the Plan merely
by virtue of his or her exercise of such discretion or authority. The Board of
Directors shall identify the Company officers who shall serve as members of the
Administrative Committee. Absent a designation to the contrary, the Board of
Directors shall act as the Administrative Committee. Because this Plan is a "top
hat" arrangement, the Administrative Committee shall not be subject to the
duties imposed by the provisions of Part 4 of Title I of ERISA.

               (h)  "Company," "Corporation" or "Employer" refers to Spiegel,
Inc., a Delaware corporation.

               (i)  "Company Contributions" refers to amounts described in
Section 5.4(a) below.

               (j)  "Compensation" refers to an Associate's gross salary,
including any

                                       2

<PAGE>

commissions, annual incentives, or long-term incentive payments, payable by the
Company after an Associate first becomes eligible to participate in the Plan and
during the period through which such participation continues.

               (k) "Disabled" or "Disability" refers to a physical or mental
condition of an Associate which (i) occurs after an Associate first defers
Compensation under this Plan, (ii) results from an injury, disease or disorder,
and (iii) renders the Associate totally and permanently incapable of continuing
in his or her customary employment with the Company. In determining whether an
Associate is disabled, the Administrative Committee may rely upon the
conclusions of any insurance carrier that has issued a policy of disability
income insurance covering the Associate or upon the conclusions of any physician
acceptable to the Administrative Committee. An Associate automatically will
satisfy the requirements under this Plan, with respect to submission of evidence
of disability, throughout the period that he or she remains qualified for Social
Security disability benefits. Any Associate who believes that he or she is
entitled to any advantage, benefit, or other consideration under the Plan as a
result of being Disabled shall apply to the Administrative Committee for such
consideration and shall provide any evidence of Disability which the
Administrative Committee in its discretion may request in a manner consistent
with the Americans with Disabilities Act of 1990 and other relevant laws.

               (l) "Effective Date" refers to January 1, 1999 with respect to
Compensation first earned, determined or payable after that date.

               (m) "ERISA" refers to the Employee Retirement Income Security Act
of 1974, as amended from time to time.

               (n) "Hardship" refers to an Associate's immediate and heavy
financial need caused by an unforeseeable emergency, as described in Treasury
Regulations Section 1.455-2(h)(4) and (5). In general, but without limitation,
the Plan Administrator shall approve a Hardship withdrawal from an Associate's
Account if the reduction does not exceed the amount needed to pay for the
following unreimbursed expenses: (i) medical expenses defined in Code Section
213(d) and incurred (or to be incurred) during the calendar year by the
Associate, or his or her spouse or dependents (as described in Code Section 152)
as a result of a sudden or unexpected illness or accident; (ii) loss of a
participant's property as a result of a casualty or other extraordinary,
unforeseeable circumstances attributable to forces beyond the participant's
control; and (iii) other costs recognized by the Plan Administrator to pose an
immediate and heavy financial need on the Associate as a result of an
unforeseeable emergency or other factors beyond an Associate's control.

               (o) "Inactive Participant" refers to an Associate who
deferred Compensation under the Plan during a previous Plan Year but who does
not defer any Compensation payable during the current Plan Year.

               (p) "Participant" refers to an eligible Associate who elects to
defer

                                       3

<PAGE>

under the Plan part of his or her Compensation payable during the current Plan
Year.

                    (q) "Plan Year" refers to the period of 12 consecutive
months commencing on the first day of January of each year. The initial plan
year shall commence on the Effective Date of the Plan and end on the final day
of December.

                    (r) "Qualified Plan" refers to the Company's tax qualified
individual account cash or deferred compensation plan subject to the limits
imposed by Code Sections 401(a)(4), 401(k), 401(m), 402(g) and 415.

                    (s) "Retirement" refers to the retirement eligibility rules
in effect at the time. Such rules shall be determined at the sole discretion of
the Administrative Committee.

                    (t) "Service" and "Years of Service" have the meanings
specified in Code Section 411(a)(4) and (5)(a) and the regulations thereunder.

                    (u) "Termination of Employment" refers to an Associate's
separation from service with the Company. This definition does not imply
retirement from service.

     3.   ELIGIBILITY
          -----------

          The Administrative Committee may, from time to time, designate by name
those Associates of the Company who are eligible to participate in the Plan for
one or more Plan Years and the date upon which each such Associate's
participation may commence. All designated Associates shall be notified by the
Board or the Administrative Committee of their eligibility to participate. An
Associate shall not be eligible to participate in the Plan during the Plan Year
immediately following the Plan Year in which the Associate takes a Hardship
withdrawal from the Plan. The effective date of any such ineligibility under the
preceding two sentences shall be the first day of the Plan Year coinciding with
or next following the date on which the Board of Directors or Administrative
Committee provides the Associate with written notice of revocation of
eligibility. An Associate's eligibility to participate in the Plan does not
confer upon the Associate any right to any award, incentive or other
remuneration of any kind.

     4.   DEFERRAL OF COMPENSATION
          ------------------------

          4.1  Election to Defer
               -----------------

               An Associate who is eligible to participate in the Plan may elect
to defer the receipt of Compensation by completing an Election of Deferral in
the form set forth in Exhibit A, Part 1, Page 1 or otherwise approved by the
Administrative Committee. Pursuant to the Election of Deferral form, an eligible
Associate may elect to defer any whole percentage or

                                       4

<PAGE>

fixed dollar amount of his or her Compensation. An Associate who elects to
participate in the Plan must defer at least five thousand dollars ($5,000) of
total Compensation but no more than fifty percent (50%) of salary Compensation
and one hundred percent (100%) of annual incentives and long-term incentive
Compensation for each Plan Year in which he or she remains eligible to
participate.

          4.2  Date of Deferral
               ----------------

               An eligible Associate must submit his or her deferral election
form to the Administrative Committee no later than the last day of the deferral
election period. The last day of the deferral election period shall be (a) the
last day preceding the calendar year in which the eligible Associate will render
the services for which he or she will receive any part of the Compensation
payable to the Associate during that year or (b) in the first year in which the
Company implements the Plan or in which an Associate first becomes eligible to
participate, the Associate may make his or her election within the first 14 days
after the later of (i) the date the Plan becomes effective or (ii) the date the
Associate becomes eligible to participate.

          4.3  Multiple Elections
               ------------------

               An election to defer Compensation shall be effective on the date
an eligible Associate delivers a completed deferral election form to the
Administrative Committee; provided, however, that, if the eligible Associate
delivers another properly completed Election of Deferral form to the
Administrative Committee prior to the close of the deferral election period
described in Section 4.2, the deferral election on the form bearing the latest
date shall control. After the last day of the election period, the controlling
election made prior to the close of the period shall be irrevocable.

          4.4  Annual Elections
               ----------------

               In order to defer any portion of Compensation earned in any
calendar year, an eligible Associate must submit at least one completed Election
of Deferral form during the one-month period immediately preceding the start of
that calendar year. If an Associate fails to make such a submission, the
Associate will be deemed to have elected to continue deferring the same
percentage of Compensation that the Associate deferred in the preceding calendar
year. The Associate also will be considered to have selected the same method of
distribution chosen the preceding calendar year.

          4.5  No Adjustments
               --------------

               After an annual election has taken effect for any Plan Year, a
Participant may not increase or decrease the percentage or amount of
Compensation to be deferred during that Plan Year.

                                       5

<PAGE>

     5.   DEFERRED COMPENSATION ACCOUNTS
          ------------------------------

          5.1  Maintenance of Accounts
               -----------------------

               The Administrative Committee shall maintain one or more Accounts
with respect to any Compensation deferred by an eligible Associate under Section
4 above. The Administrative Committee shall credit the Account with the full
amount of Compensation deferred in any monthly period. If the Compensation
deferred is subject to federal or state employment taxes (e.g. taxes under the
Federal Insurance Contributions Act or Federal Unemployment Tax Act), said taxes
shall be withheld and deducted from a portion of the Associate's Compensation
not deferred under this Plan. A Participant or Inactive Participant shall be
fully vested at all times in amounts deferred under Section 4 above, as adjusted
for any earnings, losses, interest accruals, administrative expenses or
distributions as described below.

          5.2  Interest Accruals
               -----------------

               Prior to the start of any Plan Year, the Company shall inform
Participants and Inactive Participants, in the form set forth in Schedule 1 or a
similar form as approved by the Administrative Committee, that, during the Plan
Year, the Company shall accrue interest compounded monthly, as consideration for
the use or forbearance of money. The accrual of interest begins and the
compounding of interest occurs on the first day of each Plan Year or, if later,
the date on which an eligible Associate first defers Compensation under the
Plan. The rate at which interest accrues shall be declared by the Administrative
Committee and issued in writing to each Participant and Inactive Participant
prior to the start of each Plan Year. At the sole discretion of the
Administrative Committee, for any Plan Year (i) the full amount of such accrued
interest may be allocated to a Participant's Account or (ii) adjusted for any
federal, state or local income or employment tax consequences attributable to
such interest, prior to allocating such interest to a Participant's Account. If
the full amount of such interest accruals are allocated to a Participant's
Account, any federal, state or local income or employment tax consequences
attributable to interest accruals under this Section 5.2 shall be borne by or
inure to the benefit of the Company.

          5.3  Investment of Unpaid Balances
               -----------------------------

               The unpaid balance of all Accounts payable under the Plan shall
continue to be credited with the continued accruals of interest as described in
Section 5.2 above.

          5.4  Company Contributions
               ---------------------

               a.   Company Discretionary Contributions
                    -----------------------------------

                    Apart from Compensation deferrals, the Company shall retain
the right to make discretionary contributions for any Participant under this
Plan.

                                       6

<PAGE>

               b.   Adjustments to Company Contributions
                    ------------------------------------

                    Once credited to an Associate's Accounts under this Plan,
the amounts described in Section 5.4(a) shall accrue the interest described in
Section 5.2 above, and shall be paid in accord with Section 7 below.

               c.   Vesting in Company Contributions
                    --------------------------------

                    Subject to the provisions of Section 5.4(d) below, an
Associate shall vest in amounts allocated to his or her Account as described in
Sections 5.4(a) and 5.4(b) above. The below vesting percentage shall apply to
each Company Contribution and shall be initiated beginning with the effective
date of full-time hire with the Company.

                  Years of Service                   Vested Percentage
                  ----------------                   -----------------

               Less than 1                                    0%
               1 but less than 2                             10%
               2 but less than 3                             20%
               3 but less than 4                             30%
               4 but less than 5                             40%
               5 but less than 6                             60%
               6 but less than 7                             80%
               7 or more                                    100%

Additionally, except as provided in Section 5.4(d) below, an Associate shall be
100% vested if, prior to his or her Termination of Employment, the Associate
becomes eligible for retirement, dies, becomes Disabled, or a Change in Control
occurs.

               d.   Forfeitures for Misconduct
                    --------------------------

                    Without regard to the number of Years of Service an
Associate has completed with the Company and without regard to an Associate's
age, Disability or death, if an Associate separates from service with the
Company as a result of the Associate's gross misconduct, within the meaning of
Part 6 of Title I of ERISA, regarding group health continuation coverage, or if
the Associate engages in unlawful business competition with the Company, the
Associate shall forfeit all amounts allocated to his or her Accounts under
Sections 5.4(a) and 5.4(b) above. Such forfeitures shall be retained by the
Company.

          5.5  Company's General Assets
               ------------------------

                                       7

<PAGE>

               Participant understands and agrees that all Compensation deferred
under the Plan and all amounts credited to a Participant's Account under the
Plan (a) are the general assets of the Company, (b) may be used in the operation
of the Company's business or in any other manner permitted by law, and (c)
remain subject to the claims of the Company's general unsecured creditors.
Participant agrees, on behalf of Participant and his or her Beneficiary, that
(i) title to any amounts deferred under the Plan or credited to a Participant's
Account remains in the Company and (ii) neither Participant nor his or her
Beneficiary has any property interests whatsoever in said amounts, except as
general creditors of the Company.

     6.   EFFECT ON ASSOCIATE BENEFITS
          ----------------------------

          Amounts deferred under this Plan or distributed pursuant to the terms
of this Plan are not taken into account in the calculation of an Associate's
benefits under any Associate pension or welfare benefit program or under any
other compensation practice maintained by the Company, except to the extent
provided in such program or practice.

     7.   PAYMENT OF DEFERRED COMPENSATION ACCOUNTS
          -----------------------------------------

          7.1  Income Tax Obligations
               ----------------------

               If an Associate is assessed federal, state or local income taxes
by reason of, and computed on the basis of, his or her undistributed deferred
Compensation or undistributed interest accrued on his or her Account, the
Associate shall notify the Administrative Committee in writing of such
assessment and there shall be distributed from the Associate's Account deferred
Compensation or accrued interest in an amount equal to such tax assessment,
together with any interest due and penalties assessed thereupon within 30 days
following such notice; provided however, that if the Administrative Committee
determines that such assessment is improper, it may request that the Associate
contest the assessment, at the expense of the Company (which expense shall
include all costs of appeal and litigation, including legal and accounting fees,
and any additional interest assessed on the deficiency from and after the date
of the Associate's notice to the Administrative Committee); and during the
period such contest is pending, the sums otherwise distributable pursuant to
this Section 7.1 shall not be distributed.

          7.2  In-Service Withdrawals
               ----------------------

               a.   Withdrawals to Meet Hardships
                    -----------------------------

                    If at any time following the first anniversary of initial
participation in the Plan, an Associate incurs a Hardship, as described in
Section 2(n) above, the Associate may, by written notice to the Administrative
Committee, request that all or any specified part of

                                       8

<PAGE>

his or her Account but not less than $1,000 per withdrawal be paid to the
Associate; and such distribution, if approved by the Administrative Committee,
shall be made in a lump sum within 30 days following the Administrative
Committee's receipt of such notice. The Administrative Committee shall have
exclusive authority to determine whether to make a Hardship distribution from an
Associate's Account but shall not unreasonably deny a request for such a
distribution. The Administrative Committee's decision shall be final and binding
on all parties. Any Hardship withdrawals from an Account shall reduce the amount
available for subsequent distributions from the Account, as the Administrative
Committee in good faith may determine.

               b.   Other Withdrawals
                    -----------------

                    The lesser of either: (a) the In-Service Withdrawal amount
designated by the Associate on a validly submitted Election of Deferral in the
form set forth at Exhibit A, Part 3, or (b) the Accrued Benefit, shall be
distributed in a lump sum on the In-Service Withdrawal Date. The In-Service
Withdrawal Date shall be the later of either: (a) the In-Service Withdrawal Date
set forth at Exhibit A, Part 3, or (b) a date twelve (12) months after the
Election Date as defined in this Agreement. No In-Service Withdrawal shall be
effective unless it is elected on an Election of Deferral submitted and dated as
provided at Exhibit A, Part 3.

Prior to Termination of Employment, a Participant may not withdraw any funds
from his or her Account, except as provided in this Section 7.2.

          7.3  Termination of Employment
               -------------------------

               Upon Termination of Employment of a Participant or Inactive
Participant for reasons other than Retirement, the Administrative Committee
shall distribute his or her Account under the Plan in a lump sum. The payment
from the Account shall occur or commence within 90 days following the date in
which the Termination of Employment occurs.

          7.4  Disability
               ----------

               Upon the Disability of a Participant or Inactive Participant
prior to termination of employment, the Administrative Committee shall
distribute his or her Account under the Plan, as elected by the Participant or
Inactive Participant in the form set forth in Exhibit A, Part 1, Page 2, in a
lump sum or in 120 substantially equal monthly installments. In the absence of
such election, the Participant or Inactive Participant shall be distributed his
or her Account under the plan in 120 equal monthly installments such that the
Account depletes. The initial payment from the Account shall occur or commence
on the first day of the second month following the date in which the Disability
results in the Associate's Termination of Employment. Prior to the death of the
Participant or Inactive Participant, during any period in which a Participant or
Inactive Participant remains Disabled, he or she (or his or her legal
representative) may request Hardship withdrawals from any undistributed portion
of his or her Account. Any such Hardship withdrawals shall reduce the amount
available for subsequent distributions from

                                       9

<PAGE>

the Account, as the Administrative Committee in good faith may determine.

          7.5  Retirement
               ----------

               Upon Retirement of a Participant or Inactive Participant, the
Administrative Committee shall distribute his or her Account under the Plan, as
elected by the Participant or Inactive Participant in the form set forth in
Exhibit A, Part 1, Page 2, in a lump sum or in 120 substantially equal monthly
installments. In the absence of such election, the Participant or Inactive
Participant shall be distributed his or her Account under the plan in 120 equal
monthly installments such that the Account depletes. The initial payment from
the Account shall occur or commence on the first day of the second month
following the Associate's date of Retirement.

          7.6  Death Prior to Commencement of Distributions
               --------------------------------------------

               Upon the death of a Participant or Inactive Participant prior to
the commencement of any distribution under Sections 7.4 or 7.5 above, the vested
Account balance of such Participant or Inactive Participant shall be distributed
to his or her Beneficiary, in a lump sum. The payment from the Account shall
occur or commence on the first day of the month following the date in which the
death of the Participant or Inactive Participant occurs. During the period
between the death of the Participant or Inactive Participant and the
commencement of distributions to the Beneficiary, the Beneficiary may request
Hardship withdrawals from any undistributed portion of his or her Account. Any
such Hardship withdrawals shall reduce the amount available for subsequent
distributions from the Plan, as the Administrative Committee in good faith may
determine.

          7.7  Death After Commencement of Distributions
               -----------------------------------------

               Upon the death of a Participant or Inactive Participant after the
commencement of any distribution in accordance with Sections 7.4 or 7.5 above,
the balance remaining in the Account of such Participant or Inactive Participant
shall be distributed to his or her Beneficiary in accordance with the terms
elected by the Participant or Inactive Participant under Sections 7.4 or 7.5.

          7.8  Withholding and Other Tax Consequences
               --------------------------------------

               From any payments made under this Plan, the Company shall
withhold any taxes or other amounts which federal, state or local law requires
the Company to deduct, withhold and deposit. The Company's determination of the
type and amount of taxes to be withheld from any payment shall be final and
binding on all persons having or claiming to have an interest in this Plan or in
any Account under this Plan.

                                       10

<PAGE>

     8.   FUNDING
          -------

          All amounts deferred under this Plan remain or become general assets
of the Company. All payments under this Plan shall come from the general assets
of the Company. The amounts credited to an Associate's Account are not secured
by any specific assets of the Company. This Plan shall not be construed to
require the Company to fund any of the benefits provided hereunder or to
establish a trust or purchase an insurance policy or other product for such
purpose. The Company may make such arrangements as it desires to provide for the
payment of benefits. Neither an Associate, Participant or Inactive Participant
nor his or her Beneficiary or estate shall have any rights against the Company
with respect to any portion of any Account under the Plan except as general
unsecured creditors. No Associate, Participant, Inactive Participant,
Beneficiary or estate has an interest in any Account under this Plan until the
Associate, Participant, Inactive Participant, Beneficiary or estate actually
receives payment from the Account.

     9.   NON-ALIENATION OF BENEFITS
          --------------------------

          The interest of any Associate, Participant, Inactive Participant or
Beneficiary shall not be subject to sale, assignment, transfer, conveyance,
hypothecation, encumbrance, garnishment, attachment, anticipation, pledge,
alienation or other disposition prior to actual distribution from the Plan; and
any attempt to effect such disposition shall be void. No portion of any Account
shall, prior to receipt thereof, be subject to the debts, contracts,
liabilities, or engagements of any Associate, Participant, Inactive Participant
or Beneficiary. Nothing in the preceding sentence shall prohibit the Company
from recovering from an Associate, Participant, Inactive Participant or
Beneficiary any payments to which he or she was not entitled under the Plan.

     10.  LIMITATION OF RIGHTS
          --------------------

          Nothing in this Plan document or in any related instrument shall cause
this Plan to be treated as a contract of employment within the meaning of the
Federal Arbitration Act, 9 U.S.C. 1 et seq., or shall be construed as evidence
of any agreement or understanding, express or implied, that the Company (a) will
employ any person in any particular position or level of Compensation, (b) will
offer any person initial or continued participation or awards in any commission,
incentive or other compensation program, or (c) will continue any person's
employment with the Company.

                                       11

<PAGE>

     11.  BEST PAYMENTS
          -------------

          (a) If the gross amount of any payment or benefit under this Plan,
either separately or in combination with any other payment or benefit payable by
the Company or any of its affiliates or pursuant to a plan of the Company or an
affiliate, would constitute a parachute payment within the meaning of the Code
Section 280G, then the total payments and benefits accrued and payable under
this Plan shall not exceed the amount necessary to maximize the amount
receivable by the Associate after payment of all employment, income and excise
taxes imposed on the Associate with respect to such payments or benefits.

          (b) The Associate may elect by written notice which items of
compensation, if any, shall be reduced so as to meet the requirements of Section
12(a) above. If there is a dispute between the Company and the Associate
regarding (i) the extent, if any, to which any payments or benefits to the
Associate are parachute payments or excess parachute payments, under Code
Section 280G, or (ii) the base amount of such Associate's Compensation under
Code Section 280G, or (iii) the status of such Associate as a disqualified
individual, under Code Section 280G, such dispute shall be resolved in the same
manner as a claim for benefits under this Plan.

          (c) Within 60 days of a Change in Control or, if later, within 30 days
of the Associate's receiving notice of termination of employment from the
Company or the Company's receiving notice of termination of employment from the
Associate, either the Associate or the Company may request (i) a determination
of the amount of any parachute payment, excess parachute payment, or base amount
of compensation, or (ii) a determination of the reduction necessary to maximize
the net receipts of the Associate as described in Section 12(a) above. Any fees,
costs or expenses incurred by the Associate in connection with such
determinations shall be paid equally by the Associate and the Company.

     12.  NOTICE UNDER WARN
          -----------------

          (a) Any amounts paid (i) to any Associate under the Worker Adjustment
and Retraining Notification Act of 1988 ("WARN") or under any other laws
regarding termination of employment, or (ii) to any third party for the benefit
of said Associate or for the benefit of his or her dependents shall not be
offset or reduced by any amounts paid or determined to be payable by the Company
to said Associate or to his or her dependents under this Plan.

          (b) Subsequent to a Change in Control, the Administrative Committee
may amend, modify or terminate the Plan; provided, however, that no such
amendment, modification or termination of the Plan will affect the right of a
Participant or Beneficiary with respect to his or her Account as of the day
prior to the date of the amendment, modification or termination. Such Account
will continue to be subject to and governed by the terms of the Plan as set
forth in the Plan document on the day prior to the date of the amendment,
modification or termination. Subsequent to a Change in Control, the Company may
distribute the entire value of all Accounts in lump sum payments to all
Participants and Beneficiaries.

                                       12

<PAGE>

     13.  AMENDMENT OR TERMINATION OF PLAN
          --------------------------------

          (a) Prior to a Change in Control, the Administrative Committee may
modify, suspend or terminate the Plan in any manner that does not (i) reduce any
benefits accrued under this Plan or (ii) constitute a forfeiture of any benefits
vested under this Plan.

          (b) In modifying, suspending or terminating the Plan, or in taking any
other action with respect to the implementation, operation, maintenance or
administration of the Plan, the Board of Directors may act by a resolution of
the full Board or by a resolution of the Administrative Committee.

          (c) This Plan shall terminate immediately if a court of competent
jurisdiction determines that this Plan is not exempt from the fiduciary
provisions of Part 4 of Title I of ERISA. The Plan shall terminate as of the
date it ceased to be exempt.

          (d) Upon termination of the Plan, the Administrative Committee shall
distribute all Accounts, as determined by the Administrative Committee (i) in a
lump sum to all Participants or (ii) in accordance with the method designated by
Participants at the time of their deferrals.

     14.  ADMINISTRATIVE PROCEDURES AND DISPUTE RESOLUTION
          ------------------------------------------------

          14.1 Administrative Committee
               ------------------------

               The Board of Directors may establish an Administrative Committee
composed of any persons, including officers or Associates of the Company, who
act on behalf of the Company in discharging the duties of the Company in
administering the Plan. No Administrative Committee member who is a full-time
officer or Associate of the Company shall receive compensation with respect to
his or her service on the Administrative Committee. Any member of the
Administrative Committee may resign by delivering his or her written resignation
to the Administrative Committee. The Board of Directors may remove any Committee
member by providing him or her with written notice of the removal.

          14.2 Committee Organization and Procedures
               -------------------------------------

               (a) The Board of Directors may designate a chairperson from the
members of the Administrative Committee. The Administrative Committee may
appoint a secretary, who may or may not be a member of the Administrative
Committee. The secretary shall have the primary responsibility for keeping a
record of all meetings and acts of the Administrative Committee and shall have
custody of all documents, the preservation of which shall be necessary or
convenient to the efficient functioning of the Administrative Committee.

                                       13

<PAGE>

All reports required by law may be signed by the Chairperson or another member
of the Administrative Committee, as designated by the Chairperson, on behalf of
the Company.

               (b) The Administrative Committee shall act by a majority of its
members in office and may adopt such rules and regulations as it deems desirable
for the conduct of its affairs. If the Company, the Plan, any Participant or
Inactive Participant is or becomes subject to any rules of the Securities and
Exchange Commission or any national or regional securities exchange, the Company
and the members of the Administrative Committee shall take any actions which are
necessary or desirable for the maintenance, modification or operation of the
Plan in accordance with those rules.

          14.3 Administrative Authority
               ------------------------

               The Company and the Administrative Committee have discretionary
authority to perform all functions necessary or appropriate to the operation of
the Plan, including without limitation authority to (a) construe and interpret
the provisions of the Plan document and any related instrument and determine any
question arising under the Plan document or related instrument, or in connection
with the administration or operation thereof; (b) determine in its sole
discretion all facts and relevant considerations affecting the eligibility of
any Associate to be or become a Participant; (c) decide eligibility for, and the
amount of, benefits for any Participant, Inactive Participant or Beneficiary;
(d) authorize and direct all disbursements under the Plan; and (e) employ and
engage such persons, counsel and agents and to obtain such administrative,
clerical, medical, legal, audit and actuarial services as it may deem necessary
in carrying out the provisions of the Plan. The Company shall be the
"administrator" as defined in Section 3(16)(A) of ERISA for purposes of the
reporting and disclosure requirements of ERISA and the Code. The Administrative
Committee of the Company shall be the agent for service of process on the Plan.

          14.4 Expenses
               --------

               All reasonable expenses which are necessary to operate and
administer the Plan shall be paid directly by the Company. All reasonable costs
incurred by a Committee member in the discharge of the Company's or his or her
duties under the Plan shall be paid or reimbursed by the Company. Such costs
shall include fees or expenses arising from the Administrative Committee's
retention, with the consent of the Company, of any attorneys, accountants,
actuaries, consultants or recordkeepers required by the Administrative Committee
to discharge its duties under the Plan. Nothing in the preceding two sentences
or in any other provisions of the Plan shall require the Company to pay or
reimburse any Committee member or any other person for any cost, liability,
loss, fee or expense incurred by the Administrative Committee member or other
person in any dispute with the Company; nor may any Administrative Committee
member or other person reimburse himself, herself or itself from any Plan
contributions or from the principal or income of investment or funding vehicle
for the Plan for any such cost, liability, loss, fee or expense.

          14.5 Insurance
               ---------

                                       14

<PAGE>

               The Company may, but need not, obtain liability insurance to
protect its directors, officers, Associates or representatives against loss in
the discharge of their responsibility in the operation of the Plan.

          14.6 Claims Procedure
               ----------------

               (a) A claim for benefits shall be considered filed only when
actually received by the Administrative Committee or its designee.

               (b) Any time a claim for benefits is wholly or partially denied,
the Participant, Inactive Participant or Beneficiary (hereinafter "Claimant")
shall be given written notice of such denial within 30 days after the claim is
filed, unless special circumstances require an extension of time for processing
the claim. If there is an extension, the Claimant shall be notified of the
extension and the reason for the extension within the initial 30 day period. The
extension shall expire within 60 days after the claim is filed. Such notice will
indicate the reason for denial, the pertinent provisions of the Plan on which
the denial is based, an explanation of the claims appeal procedure set forth
herein, and a description of any additional material or information necessary to
perfect the claim and an explanation of why such material or information is
necessary.

          14.7 Appeal Procedures
               -----------------

               (a) Any person who has had a claim for benefits denied by the
Administrative Committee, or is otherwise adversely affected by the action or
inaction of the Administrative Committee, shall have the right to request review
by the Administrative Committee. Such request must be in writing, and must be
received by the Administrative Committee within 60 days after such person
receives notice of the Administrative Committee's action. If written request for
review is not made within such 60-day period, the Claimant shall forfeit his or
her right to review. The Claimant or a duly authorized representative of the
Claimant may review all pertinent documents and submit issues and comments in
writing.

               (b) The Administrative Committee shall then review the claim. The
Administrative Committee may issue a written decision reaffirming, modifying or
setting aside its former action within 30 days after receipt of the written
request for review, or 60 days if special circumstances require an extension.
The Claimant shall be notified in writing of any such extension within 30 days
following the request for review. An original or copy of the decision shall be
furnished to the Claimant. The decision shall set forth the reasons and
pertinent plan provisions or relevant laws on which the decision rests. The
decision shall be final and binding upon the Claimant and the Administrative
Committee and all other persons having or claiming to have an interest in the
Plan or in any Account established under the Plan.

          14.8 Arbitration
               -----------

                                       15

<PAGE>

               (a) Any Participant's, Inactive Participant's or Beneficiary's
claim remaining unresolved after exhaustion of the procedures in Section 14.6
and 14.7 (and to the extent permitted by law any dispute concerning any breach
or claimed breach of duty regarding the Plan) shall be settled solely by binding
arbitration at the Employer's principal place of business at the time of the
arbitration, in accordance with the Employment Claims Rules of the American
Arbitration Association. Judgment on any award rendered by the arbitrator may be
entered in any court having jurisdiction thereof. Each party to any dispute
regarding the Plan shall pay the fees and costs of presenting his, her or its
case in arbitration. All other costs of arbitration, including the costs of any
transcript of the proceedings, administrative fees, and the arbitrator's fees
shall be borne equally by the parties.

               (b) Except as otherwise specifically provided in this Plan, the
provisions of this Section 14.8 shall be absolutely exclusive for any and all
purposes and fully applicable to each and every dispute regarding the Plan
including any claim which, if pursued through any state or federal court or
administrative proceeding, would arise at law, in equity or pursuant to
statutory, regulatory or common law rules, regardless of whether such claim
would arise in contract, tort or under any other legal or equitable theory or
basis. The arbitrator who hears or decides any claim under the Plan shall have
jurisdiction and authority to award only Plan benefits and prejudgment interest;
and apart from such benefits and interest, the arbitrator shall not have any
authority or jurisdiction to make any award of any kind including, without
limitation, compensatory damages, punitive damages, foreseeable or unforeseeable
economic damages, damages for pain and suffering or emotional distress, adverse
tax consequences or any other kind or form of damages. The remedy, if any,
awarded by such arbitrator shall be the sole and exclusive remedy for each and
every claim which is subject to arbitration pursuant to this Section 14.8. Any
limitations on the relief that can be awarded by the arbitrator are in no way
intended (i) to create rights or claims that can be asserted outside arbitration
or (ii) in any other way to reduce the exclusivity of arbitration as the sole
dispute resolution mechanism with respect to this Plan.

               (c) The Plan and the Company will be the necessary parties to any
action or proceeding involving the Plan. No person employed by the Company, no
Participant, Inactive Participant or Beneficiary or any other person having or
claiming to have an interest in the Plan will be entitled to any notice or
process, unless such person is a named party to the action or proceeding. In any
arbitration proceeding all relevant statutes of limitation shall apply. Any
final judgment or decision that may be entered in any such action or proceeding
will be binding and conclusive on all persons having or claiming to have any
interest in the Plan.

          14.9 Notices
               -------

               Any notice from the Company or the Administrative Committee to an
Associate, Participant, Inactive Participant or Beneficiary regarding this Plan
may be addressed to the last known residence of said person as indicated in the
records of the Company. Any notice to, or any service of process upon, the
Company or the Administrative Committee with respect to this Plan may addressed
as follows:

                                       16

<PAGE>

          Plan Administrative Committee
          --------------------------------------
          c/o Spiegel, Inc. Benefits Department
          --------------------------------------
          3500 Lacey Road
          --------------------------------------
          Downers Grove, IL  60515
          --------------------------------------

          14.10   Indemnification
                  ---------------

                  To the extent permitted by law, the Company shall, and hereby
does, indemnify and hold harmless any director, officer or Associate of the
Company who is or may be deemed to be responsible for the operation of the Plan,
from and against any and all losses, claims, damages or liabilities (including
attorneys' fees and amounts paid, with the approval of the Board, in settlement
of any claim) arising out of or resulting from a duty, act, omission or decision
with respect to the Plan, so long as such duty, act, omission or decision does
not involve gross negligence or willful misconduct on the part of such director,
officer or Associate. Any individual so indemnified shall, within 10 days after
receipt of notice of any action, suit or proceeding, notify the Administrative
Committee and offer in writing to the Administrative Committee the opportunity,
at the Company's expense, to handle and defend such action, suit or proceeding,
and the Company shall have the right, but not the obligation, to conduct the
defense in any such action, suit or proceeding. An individual's failure to give
the Administrative Committee such notice and opportunity shall relieve the
Company of any liability to said individual under this Section 14.10. The
Company may satisfy its obligations under this provision (in whole or in part)
by the purchase of insurance. Any payment by an insurance carrier to or on
behalf of such individual shall, to the extent of such payment, discharge any
obligation of the Company to the individual under this indemnification.

     15.  MISCELLANEOUS
          -------------

          15.1    Alternative Acts and Times
                  --------------------------

                  If it becomes impossible or burdensome for the Company or the
Administrative Committee to perform a specific act at a specific time required
by this Plan, the Company or Committee may perform such alternative act which
most nearly carries out the intent and purpose of this Plan and may perform such
required or alternative act at a time as close as administratively feasible to
the time specified in this Plan for such performance. Nothing in the preceding
sentence shall allow the Company or Committee to accelerate or defer any
payments to Participants or Inactive Participants under this Plan, except as
otherwise expressly permitted herein.

          15.2    Masculine and Feminine, Singular and Plural
                  -------------------------------------------

                                       17

<PAGE>

                  Whenever used herein, pronouns shall include both genders, and
the singular shall include the plural, and the plural shall include the
singular, whenever the context shall plainly so require.

          15.3    Governing Law and Severability
                  ------------------------------

                  This Plan shall be construed in accordance with the laws of
the State of Delaware(exclusive of its rules regarding conflicts of law) to the
extent that such laws are not preempted by ERISA or other federal laws. If any
provision of this Plan shall be held illegal or invalid for any reason, such
determination shall not affect the remaining provisions of this Plan which shall
be construed as if said illegal or invalid provision had never been included.

          15.4    Facility of Payment
                  -------------------

                  If the Administrative Committee, in its sole discretion,
determines that any Associate, Participant, Inactive Participant or Beneficiary
by reason of infirmity, minority or other disability, is physically, mentally or
legally incapable of giving a valid receipt for any payment due him or her or is
incapable of handling his or her own affairs and if the Administrative Committee
is not aware of any legal representative appointed on his or her behalf, then
the Administrative Committee, in its sole discretion, may direct (a) payment to
or for the benefit of the Associate, Participant, Inactive Participant or
Beneficiary; (b) payment to any person or institution maintaining custody of the
Associate, Participant, Inactive Participant or Beneficiary; or (c) payment to
any other person selected by the Administrative Committee to receive, manage and
disburse such payment for the benefit of the Associate, Participant, Inactive
Participant or Beneficiary. The receipt by any such person of any such payment
shall be a complete acquittance therefor; and any such payment, to the extent
thereof, shall discharge the liability of the Company, the Administrative
Committee, and the Plan for any amounts owed to the Associate, Participant,
Inactive Participant or Beneficiary hereunder. In the event of any controversy
or uncertainty regarding who should receive or whom the Administrative Committee
should select to receive any payment under this Plan, the Administrative
Committee may seek instruction from a court of proper jurisdiction or may place
the payment (or entire Account) into such court with final distribution to be
determined by such court.

                                       18

<PAGE>

          15.5    Correction of Errors
                  --------------------

                  Any crediting of Compensation or interest accruals to the
Account of any Associate, Participant, Inactive Participant or Beneficiary under
a mistake of fact or law shall be returned to the Company. If an Associate,
Participant, Inactive Participant or Beneficiary in an application for a benefit
or in response to any request by the Company or the Administrative Committee for
information, makes any erroneous statement, omits any material fact, or fails to
correct any information previously furnished incorrectly to the Company or the
Administrative Committee, or if the Administrative Committee makes an error in
determining the amount payable to an Associate, Participant, Inactive
Participant or Beneficiary, the Company or the Administrative Committee may
correct its error and adjust any payment on the basis of correct facts. The
amount of any overpayment or underpayment may be deducted from or added to the
next succeeding payments, as directed by the Administrative Committee. The
Administrative Committee and the Company reserve the right to maintain any
action, suit or proceeding to recover any amounts improperly or incorrectly paid
to any person under the Plan or in settlement of a claim or satisfaction of a
judgment involving the Plan.

          15.6    Missing Persons
                  ---------------

                  In the event a distribution of part or all of an Account is
required to be made from the Plan to an Associate, Participant, Inactive
Participant or Beneficiary, and such person cannot be located, the relevant
portion of the Account shall escheat in accordance with the laws of the State of
Delaware. If the affected Associate, Participant, Inactive Participant or
Beneficiary later contacts the Administrative Committee, his or her portion of
the Account shall be reinstated and distributed as soon as administratively
feasible. The Company shall reinstate the amount forfeited by reclaiming such
amount from the State of Delaware, and allocating it to the Account of the
affected Associate, Participant, Inactive Participant or Beneficiary. Prior to
forfeiting any Account, the Administrative Committee shall attempt to contact
the Associate, Participant, Inactive Participant or Beneficiary by return
receipt mail (or other carrier) at his or her last known address according to
the Company's records, and, where practical, by letter-forwarding services
offered through the Internal Revenue Service, or the Social Security
Administration, or such other means as the Administrative Committee deems
appropriate.

          15.7    Status of Participants
                  ----------------------

                  In accordance with Revenue Procedure 92-65 Section 3.01(d),
this Plan hereby provides:

                  a. Associates, Participants and Inactive Participants under
this Plan shall have the status of general unsecured creditors of the Company;

                  b. This Plan constitutes a mere promise by the Company to make
benefit payments in the future; and

                                       19

<PAGE>

                  c. It is the intention of the parties that the arrangements
under this Plan shall be unfunded for tax purposes and for purposes of Title I
of ERISA.

          15.8    Associate and Spouse Acknowledgement
                  ------------------------------------

                  By executing this Plan document or related enrollment or
election form, the undersigned Associate and, if Associate is married,
Associate's spouse hereby acknowledge that each of them has read and understood
this Plan document. Associate and his or her spouse also acknowledge that they
knowingly and voluntarily agree to be bound by the provisions of the Plan, as
amended from time to time, including those Plan provisions which require the
resolution of disputes by binding out-of-court arbitration. Associate and his or
her spouse further acknowledge that they have had the opportunity to consult
with counsel of their own choosing with respect to all of the financial, tax and
legal consequences of participating in this Plan, including in particular the
effects of participation on any community property or other interest which the
Associate's spouse may have in the Compensation deferred under this Executive
Deferred Compensation Plan.

                                       20

<PAGE>

          IN WITNESS WHEREOF, each of the undersigned has executed this document
on the date set forth adjacent to his or her signature below.

                                                  SPIEGEL, INC.
                                                  A Delaware Corporation

Dated: _________                                  By

                                                  Title________________________

                                                  ASSOCIATE

Dated: _________                                  ______________________________
                                                  Associate's Signature

                                                  ______________________________
                                                  Associate's Printed Name

                                                  ASSOCIATE'S SPOUSE

Dated: _________                                  ______________________________
                                                  Spouse's Signature

                                                  ______________________________
                                                  Spouse's Printed Name

                                       21

<PAGE>

     Spiegel, Inc.

     Executive Deferred Compensation Plan

     Schedule 1, Interest Crediting Declaration
     ---------------------------------------------------------------------------

     The Company agrees that it will credit deferred Compensation and Company
     Contributions to the Accounts of all Participants and Inactive Participants
     in the Spiegel, Inc. Executive Deferred Compensation Plan with an
     annualized rate of return equal to 5.47% for the 2002 Plan Year.

     This rate of return is subject to change each subsequent Plan Year at the
     discretion of the Company and shall be credited under the provisions of the
     Plan.

          Participant
          Signature_____________________________

          Printed Name__________________________

          Title_________________________________

          Date____________________

<PAGE>

--------------------------------------------------------------------------------
SPIEGEL, INC.

EXECUTIVE DEFERRED COMPENSATION PLAN

         EXHIBIT A (Part 1, page 1 of 2) - ELECTION OF DEFERRAL
--------------------------------------------------------------------------------

1. I acknowledge that the terms and conditions of the Spiegel, Inc. EXECUTIVE
DEFERRED COMPENSATION PLAN have been explained to me, including the tax
consequences of my decision to participate in the Plan.

2. I agree to defer a portion of my current compensation, and to have that
income paid to me at a later date pursuant to the terms and conditions of the
Plan, which is incorporated by reference, in its entirety, in this Election of
Deferral Form.

3. I understand that this Election Form is not an employment agreement, does not
guarantee that I will receive any predetermined amount of compensation, and does
not guarantee that I will receive any incentive compensation.

4. I understand that any compensation I defer will be held as an asset of
Spiegel, Inc., and will remain subject to the claims of the general creditors of
Spiegel, Inc.

ELECTION TO DEFER COMPENSATION

I hereby elect to defer the following amount from each of my paychecks:

     _____% and/or $_______ of my salary paid in calendar year 2002.

     _____% and/or $_______ of my annual incentive paid in calendar year 2003.

     _____% and/or $_______ of my long-term incentive paid in calendar year
2003.

The foregoing Election is voluntarily made by me after reviewing the terms of
the Plan and with knowledge that this Election is irrevocable until changed in
accordance with the terms of the Plan.

<PAGE>

--------------------------------------------------------------------------------
SPIEGEL, INC.

         EXHIBIT A (Part 1, page 2 of 2) - ELECTION OF DEFERRAL
--------------------------------------------------------------------------------
RETIREMENT BENEFIT DISTRIBUTION REQUEST

The following supersedes any previous distribution request and applies to all
amounts deferred and Company Discretionary Contributions during the current and
future calendar years, adjusted for earnings, losses, and administrative
expenses credited to or charged against the Associate's Account. This election
cannot be changed retroactively as to prior deferrals, without the consent of
the Corporation which may be withheld at its sole discretion.

In the event of either:

     1.   Retirement, or

     2.   Disability.

I wish to receive my current and future deferrals in the following form:

         If neither of the following two requests apply, the Retirement Benefit
   will be payable, as described at paragraph 7.4 or 7.5, in 120 monthly
   installments beginning upon the later of the Retirement Date or actual
   Termination of Employment.

____     (i)      lump sum; or

____     (ii)     in 120 substantially equal monthly installments.

This Election of Deferral is executed and agreed:

__________________________________  _________________________(Election Date)
Signature                           Date

__________________________________  _________________________
Print Name                          Social Security Number

Agreed:
Spiegel, Inc.

__________________________________  _________________________
Signature                           Date

<PAGE>

EXHIBIT A (Part 2)  - ELECTION OF COMPANY DISCRETIONARY CONTRIBUTION

TO:           _________________________
              (NAME OF ASSOCIATE)

FROM:         SPIEGEL, INC.

     The Company hereby elects to contribute the amount of _______________, and
does credit such amount under the terms of the Spiegel, Inc., Executive Deferred
Compensation Plan (the "Plan"), as of the _______ day of ______________, 20__,
on behalf of the Account of the above named Associate.

         This contribution is subject to the terms of the Plan.

Spiegel, Inc.

BY:___________________

<PAGE>

EXHIBIT A (Part 3)  - IN-SERVICE WITHDRAWAL

IN-SERVICE WITHDRAWAL

I hereby elect to receive an In-Service Withdrawal on the In- Service Withdrawal
Date specified below in the amount of the lesser of the Accrued Benefit, or the
following amount:

AMOUNT:    ____________________  (Insert Amount)

IN-SERVICE WITHDRAWAL DATE:__________________ (At least 12 months after
Effective Date)

IN-SERVICE WITHDRAWAL. The lesser of either: (a) the In-Service Withdrawal
amount designated by the Associate or (b) the Accrued Benefit, shall be
distributed in a lump sum on the In-Service Withdrawal Date. The In-Service
Withdrawal Date shall be the later of either: (a) the In-Service Withdrawal Date
set forth, or (b) a date 12 months after the Election Date defined by this
Agreement. No In-Service Withdrawal shall be effective unless it is elected on
this form submitted as required by this Agreement.

<PAGE>

Spiegel, Inc.
EXECUTIVE DEFERRED COMPENSATION PLAN
EXHIBIT B- BENEFICIARY DESIGNATION
----------------------------------

I.   _________________________ (Insert Associate's name as it appears in the
     Agreement.)

================================================================================

II.  The above-named Associate's Revocable Beneficiary under the EXECUTIVE
     DEFERRED COMPENSATION PLAN is set forth below:

Primary Beneficiary(ies):      ____________________      ____________________

Relationship:                  ____________________      ____________________

Address:                       ____________________      ____________________

                               ____________________      ___________________

Social Security Number:        ____________________      ____________________

Contingent Beneficiary(ies):   ____________________      ____________________

Relationship:                  ____________________      ____________________

Address:                       ____________________      ____________________

                               ____________________      ____________________

Social Security Number:        ____________________      ____________________

================================================================================

III. If no individual beneficiary named is living at the Associate's death, the
Beneficiary shall be the executor(s) or administrator(s) of the Associate.

IV.  This Designation of Beneficiary revokes all prior designations and shall be
effective as of the date it is filed with the Company. The Associate retains the
right to revoke this Designation of Beneficiary.

Dated at _______________, State of _______________, on _______________, 20__.

_________________________________           _________________________________
Signature of Associate                      Witness

<PAGE>

CONSENT OF SPOUSE

(Required in Community Property States)

         I hereby consent to the designation of the above beneficiary (ies) to
receive the benefits payable under the SPIEGEL, INC., EXECUTIVE DEFERRED
COMPENSATION PLAN as the result of the death of the above Associate and waive
any and all rights necessary to provide the payment of such benefits to such
beneficiary (ies).

Dated at ____________,

State of__________, on _______________, 20____.

_______________________________
(Signature of Spouse)

Witness:

_______________________________

FILING ACKNOWLEDGEMENT

Filed with the records of the Company this ___ day of _______________, 20____.

By___________________________

_____________________________
Title

<PAGE>

EXHIBIT C

Spiegel, Inc.
EXECUTIVE DEFERRED COMPENSATION PLAN
SUPPLEMENTAL CONTRIBUTION
-------------------------

Vesting Schedule

         The Vesting Percentage set forth below represents the portion of the
     Company Discretionary Contribution which is payable under the terms of this
     Agreement, based on Years of Service from effective date of full-time hire
     with the Company.

    ----------------------------------------------------------------------------
    Years of Service                            Cumulative Vesting Percentage

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

    Less than 1                                 0%
    1 but less than 2                           10%
    2 but less than 3                           20%
    3 but less than 4                           30%
    4 but less than 5                           40%
    5 but less than 6                           60%
    6 but less than 7                           80%
    7 or more                                   100%

Any unvested portion of the Company Contributions will be forfeited effective as
of the date of the Associate's termination of employment. In addition, if an
Associate's employment is terminated due to the Associate's gross misconduct,
the Associate shall forfeit all Company Contributions and corresponding interest
accruals as of the date of the Associate's termination of employment.

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