Document:

exv10w62

 

EXHIBIT 10.62

SEVERANCE AGREEMENT AND GENERAL RELEASE

           This Severance Agreement and General Release (the “Agreement”) is between
USEC Inc., a Delaware corporation (“USEC” or the “Company”) and Dennis R.
Spurgeon (the “Employee”) (USEC and Employee being sometimes referred to herein
individually as the “Party” and collectively as the “Parties”).

           WHEREAS, Employee has been employed by USEC in the capacity of Executive
Vice President and Chief Operating Officer of the Company;

           WHEREAS, Employee and the Company are parties to an Employment Agreement
dated as of June 4, 2001, as amended (the “Employment Agreement”), that
provides for certain severance benefits upon Employee’s termination;

           WHEREAS, Employee and USEC have agreed that Employee’s employment with the
Company will be terminated November 30, 2003 (the “Termination Date”), and to
reduce the impact of the termination, the Company hereby offers Employee a
severance payment in addition to the severance benefits provided to Employee in
the Employment Agreement, in exchange for, among other things, Employee’s full
release of claims against the Company and the other covenants and agreements
contained herein;

           NOW THEREFORE, IT IS HEREBY AGREED by and between Employee and USEC as
follows:

      1.  SEVERANCE PAYMENT.

           (a)    In full consideration of Employee’s execution of this Agreement, and
his agreement to be legally bound by its terms, the Company agrees to pay to
Employee as severance pay, in addition to the severance benefits provided to
Employee under the Employment Agreement, the gross sum of $228,956
(representing approximately 25% of Employee’s final average base salary and
bonus), minus all payroll deductions required by law or authorized by Employee
(the “Severance Payment”), upon either the next regularly scheduled pay day
after the 8th day following either Employee’s execution of this Agreement or
the next regularly scheduled pay day after the Termination Date, whichever is
later.

           (b)    Employee acknowledges and agrees that the Severance Payment provided
in Section 1(a) constitutes consideration beyond the severance benefits
provided to Employee under the Employment Agreement and that, but for the
mutual covenants set forth in this Agreement, the Company otherwise would not
be obligated to provide to the Employee, and that the Company is under no
obligation whatsoever to make, any other severance payment to the Employee.

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      2.  GENERAL RELEASE. Employee, for and in consideration of the
undertakings of the Company set forth herein, and intending to be legally
bound, does hereby remise, release, and forever discharge USEC and its parents,
subsidiaries, affiliates, and its and their officers, directors, shareholders,
employees and agents, its and their respective successors and assigns, heirs,
executors, and administrators (herein referred to collectively as “Releasees”)
of and from any and all actions and causes of actions, suits, debts, claims and
demands whatsoever in law or in equity, which he ever had, now has, or which
his heirs, executors or administrators may have, by reason of any matter, cause
or thing whatsoever, from the beginning of his employment with USEC up to and
including the Termination Date, and particularly, but without limitation, any
claims arising from or relating in any way to his employment relationship or
the termination of his employment relationship with USEC, including, but not
limited to, any claims which have been asserted, could have been asserted or
could be asserted now or in the future, including any claims under any federal,
state or local laws, including, but not limited to, the United States
Constitution, the Maryland Constitution, Title VII of the Civil Rights Act of
1964, as amended, the Age Discrimination in Employment Act of
1967, as amended,
the Americans with Disabilities Act of 1990, as amended, the Fair Labor
Standards Act, as amended, the National Labor Relations Act, as amended, the
Labor-Management Relations Act, as amended, the Workers Retraining and
Notification Act of 1988, as amended, the Rehabilitation Act of 1973, as
amended, the Employee Retirement Income Security Act of 1974, as amended,
Section 211 of the Energy Reorganization Act of 1974, as amended, and the
Maryland Human Rights Act, as amended or any other Maryland Statute or
Regulation. This General Release does not prohibit Employee from bringing an
action to challenge the validity of this Agreement.

      3.  NON SUIT. Employee agrees and covenants that neither he, nor any
person, organization or other entity on his behalf, will file, charge, claim,
sue or cause to permit to be filed, charged or claimed, any civil action, suit,
arbitration or legal proceeding for personal relief (including any action for
damages, injunctive, declaratory, monetary or other relief) against the
Releasees involving any matter occurring at any time in the past up to and
including the Termination Date or involving any continuing effects of any acts
or practices which may have arisen or occurred prior to the Termination Date or
in connection with the calculation of benefits or amounts due Employee under
the Employment Agreement or any Company benefit plan, including the Company’s
Supplemental Executive Retirement Plan. Employee further agrees that if any
person, organization, or other entity should bring a claim against the
Releasees involving any such matter, he will not accept any personal relief in
such action.

      4.  NO DISPARAGEMENTS. Employee agrees that Employee shall not make any
oral or written, public or private statements that are disparaging of the
company, its parents, subsidiaries or affiliates, or any of their respective
present or former officers, directors, agents, employees, successors or
assigns.

      5.  RETURN OF COMPANY’S DOCUMENTS AND PROPERTY. Employee agrees to return
all records, documents, proposals, notes, lists, files and any and all other
materials including, without limitation, computerized an/or electronic
information that refers, relates or otherwise pertains to the Company, or any
and all of the Company’s parents, subsidiaries or affiliates, or any of their
respective officers, directors, shareholders, agents, employees, and successors
or assigns, and any and all business dealings of said persons and entities. In
addition,

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Employee shall return to the Company all property or equipment that
the Employee has been issued during the course of the Employee’s employment or
which the Employee otherwise currently possesses. Employee shall deliver to
the Company on or before the Termination Date at Employee’s expense all of the
Company’s records, document, proposals, notes, lists, files, materials,
property and equipment that are in the Employee’s possession. Employee is not authorized to retain
any copies of any such records, documents, proposals, notes, lists, files or
materials. Nor is the Employee authorized to retain any other of the Company’s
property or equipment.

      6.  NON-COMPETITION. For purposes of Section 9(b) of the Employment
Agreement, the period during which Employee shall not engage or become
interested as an owner (other than as an owner of less than 5% of the stock of
a publicly owned company), stockholder, partner, director, officer, employee
(in an executive capacity), consultant or otherwise in any business that is
competitive with any business conducted by the Company or any of its affiliated
companies during the Employment Period or as of the Date of Termination, as
applicable, shall be extended by 3 months in addition to the period required
under the Employment Agreement.

      7.  REMEDIES. Employee acknowledges that a violation or attempted
violation on the Employee’s part of Section 6 of this Agreement will cause
irreparable damage to the Company, and Employee therefore agrees that the
Company shall be entitled as a matter of right to an injunction, out of any
court of competent jurisdiction, restraining any violation or further violation
of such promises by Employee. Employee agrees that such right to an injunction
is cumulative and in addition to whatever other remedies the Company may have
under law or equity. Employee also stipulates and agrees that USEC shall be
entitled to the return of all severance pay under this Agreement as a partial
remedy for any breach or violation of Section 6.

      8.  NON-ADMISSION OF LIABILITY. Nothing in this Agreement shall be
construed as an admission of liability or violation of federal, state or local
statute or regulation, or of any duty owed by Employee or the Releasees;
rather, Employee and the Releasees are resolving all matters arising out of
their employer-employee relationship with all other relationships between
Employee and the Releasees, as to each of which each of the Releasees and
Employee deny any liability.

      9.  NUCLEAR, WORKPLACE, PUBLIC SAFETY AND SARBANES-OXLEY CONCERNS.
Employee understands and acknowledges that nothing in this Agreement prohibits,
penalizes, or otherwise discourages him from reporting, providing testimony
regarding, or otherwise communicating any nuclear safety concern, workplace
safety concern, public safety concern, or concern of any sort, to the U.S.
Nuclear Regulatory Commission, the U.S. Department of Labor, or any federal or
state government agency. Employee further understands and acknowledges that
nothing in the provisions of this Agreement conditions or restricts his
communication with, or full cooperation in proceedings or investigations by,
any federal or state agency. Employee also understands and acknowledges that
nothing in this Agreement shall be construed to prohibit him from engaging in
any activity protected by the Sarbanes-Oxley Act, 18 U.S.C. § 1514A.

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      10.  REVIEW AND REVOCATION PERIOD.

             (a)    Employee hereby certifies that he has read the terms of this
Agreement, that he has been informed by the Company, through this document,
that he should discuss this Agreement with an attorney of his own choice, and
that he understands its terms and effects. Employee further certifies that he
has the intention of releasing all claims recited herein in exchange for the
consideration described herein, which he acknowledges as adequate and
satisfactory to him.

             (b)    Employee hereby certifies that he is signing and entering into this
Agreement as a free and voluntary act without duress or undue pressure of
influence of any kind or nature
whatsoever and has not relied on any promises, representations or
warranties regarding the subject matter hereof other than as set forth in this
Agreement.

             (c)    Employee acknowledges that he has been given the right to consider
this Agreement for a period of at least twenty-one (21) days prior to entering
into the Agreement. Employee further acknowledges that he has the right to
revoke this Agreement within seven (7) days of its execution by giving written
notice of such revocation by hand delivery or fax the Company, Attention
Richard Rowland (fax no. 301-564-3203).

      11. SEVERABILITY. While the provisions contained in this Agreement are
considered by the Parties to be reasonable in all circumstances, it is
recognized that some provisions may fail for technical reasons. Accordingly,
it is hereby agreed and declared that if one or more of such provisions shall,
either by itself or themselves or taken with others, be adjudged to be invalid
as exceeding what is reasonable in all circumstance for the protection of the
interests of the Company, but would be valid if any particular restrictions or
provisions were deleted or restricted or limited in a particular manner, then
the said provisions shall apply with any such deletions, restrictions,
limitations, reductions, curtailments, or modifications as may be necessary to
make them valid and effective and the remaining provisions shall be unaffected
thereby.

      12. ENTIRE AGREEMENT; MODIFICATION. This Agreement and the Employment
Agreement constitute the entire understanding of the Parties regarding the
subject matter hereof, and may not be modified without the express written
consent of the Parties.

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      13. GOVERNING LAW; CONSENT TO JURISDICTION. This Agreement and any
disputes arising therefrom shall be governed by the laws of the State of
Maryland and Employee hereby agrees to submit to jurisdiction of the courts of
the State of Maryland for any claims arising under this Agreement.

      IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties
have executed the foregoing Severance Agreement and General Release this 21st
day of November, 2003.

	 	 	 	 	 
	USEC Inc.	 	EMPLOYEE:
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	By:	 	
/s/ Timothy B. Hansen
	 	/s/ Dennis R. Spurgeon
	 	 	

	 	

	 	 	 	 	Signature – Dennis R. Spurgeon
	Title:	 	
Senior Vice President, General Counsel and Secretary
	 	SSN:
	 	 	

	 	 

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EXHIBIT 10.63

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT made and entered into as of the 15th day of
December, 2003, by and between USEC Inc., a Delaware corporation (the
“Company”), and Lisa Gordon-Hagerty (the “Executive”).

     WHEREAS, the Company desires to provide for the service and employment of
the Executive with the Company and the Executive wishes to perform services for
the Company, all in accordance with the terms and conditions provided herein;

     NOW, THEREFORE, IN CONSIDERATION of the mutual premises, covenants and
agreements set forth below, it is hereby agreed as follows:

     1.     Employment and Term.

     (a) The Company agrees to employ the Executive, and the Executive agrees
to remain in the employ of the Company, in accordance with the terms and
provisions of this Agreement for the period set forth below (the “Employment
Period”).

     (b) The Employment Period of this Agreement will commence as of the date
hereof (the “Effective Date”) and continue until the second anniversary of the
Effective Date (the “Second Anniversary”), unless sooner terminated as
hereinafter provided. Notwithstanding the foregoing, upon the occurrence of a
“Change in Control,” as defined in the USEC Inc. 1999 Equity Incentive Plan
(the “Equity Incentive Plan”), during the Employment Period, this Agreement
shall continue in effect for a period of not less than three years from the
date of the Change in Control, unless sooner terminated as hereinafter
provided. References herein to the Employment Period shall refer to both the
initial term and any extended term hereunder. The Employment Period shall end
on the Date of Termination (as hereinafter defined).

     (c) The principal location at which the Executive will perform her duties
will be the Company’s principal executive offices in Bethesda, Maryland.

     2.     Position; Duties. Commencing as of the Effective Date and continuing
during the Employment Period, the Executive shall serve as Executive Vice
President and Chief Operating Officer of the Company and shall have the
customary duties of such position and such responsibilities, duties and
authority as are specified in the Company’s charter and/or bylaws and as
specified, from time to time, by the Board of Directors of the Company (the
“Board”) or the Chief Executive Officer of the Company (the “CEO”). The
Executive shall report to the CEO. The Executive shall devote substantially
all of her working time and efforts to the business and affairs of the Company
and shall not engage in activities that interfere with such performance.

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     3.     Compensation. The Executive shall receive the following compensation
for her services hereunder to the Company:

     (a) Salary. Commencing as of the Effective Date and continuing during
the Employment Period, the Company shall pay to the Executive an annual base
salary (“Annual Base Salary”) at a
rate not less than $490,000, such salary to be paid in conformity with the
Company’s policies relating to salaried employees. This salary in the sole
discretion of the Company may be (but is not required to be) increased from
time to time, subject to and in accordance with the Company’s annual
performance review process.

     (b) Annual Incentive Program. The Executive shall be a participant in
the Company’s annual incentive program as in effect from time to time (the
“Annual Incentive Program”) at a level commensurate with her position, and
shall be entitled to receive such amounts (each, a “Bonus”) as may be
authorized, declared and paid by the Company pursuant to the terms of such
program and the performance goals established by the Compensation Committee.

     (c) Long-Term Incentive Plan. The Executive shall be a participant in
the Company’s Equity Incentive Plan, and any other long-term equity or cash
compensation programs as the Board may provide for the Company’s senior
management (collectively, the “LTIP”) at a level commensurate with the
Executive’s position.

     (d) Employee Benefit Plans; Perquisites; Fringe Benefits. During the
Employment Period, the Executive shall be eligible to participate, on a basis
commensurate with her position, in all employee benefit plans, including
supplemental benefit plans, welfare plans, practices, policies and programs,
perquisites and other fringe benefits applicable to senior management of the
Company.

     (e) Expenses. The Company agrees to reimburse the Executive for all
reasonable expenses, including those for travel and entertainment, properly
incurred by her in the performance of her duties under this Agreement in
accordance with policies established from time to time by the Company.

     (f) Vacation. The Executive shall be entitled to no less than the
number of vacation days in each calendar year as determined in accordance with
the Company’s vacation policy as in effect from time to time, but not less than
five weeks in any calendar year (prorated in any calendar year during which she
is employed hereunder for less than the entire year in accordance with the
number of days in such calendar year in which she is so employed). The
Executive shall also be entitled to all paid holidays and personal days given
by the Company to its executives.

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     4.     Termination of Employment.

     (a) Death; Disability. The Executive’s employment shall terminate
automatically upon the Executive’s death during the Employment Period. The
Company or the Executive may terminate the Executive’s employment on account of
the Executive’s Disability. For purposes hereof, “Disability” shall mean that
the Executive has become totally and permanently disabled as defined or
described in the Company’s long term disability benefit plan applicable to
senior executive officers as in effect at the time the Executive’s disability
is incurred.

     (b) By the Company for Cause or without Cause. The Company may terminate
the Executive’s employment during the Employment Period for Cause or without
Cause. For purposes of this Agreement “Cause” shall mean:

        (i)        the engaging by the Executive in willful misconduct that is
injurious to the Company or its affiliates;

        (ii)      the embezzlement or misappropriation of funds or property of
the Company or its affiliates by the Executive, or the conviction of the
Executive of a felony or the entrance of a plea of guilty or nolo
contendere by the Executive to a felony; or

        (iii)    the willful failure or refusal by the Executive to
substantially perform her duties or responsibilities (other than (x) any
such failure resulting from the Executive’s incapacity due to Disability,
after demand for substantial performance is delivered by the Company to
the Executive that specifically identifies the manner in which the
Company believes the Executive has not substantially performed her
duties, or (y) any such actual or anticipated failure after the issuance
of a Notice of Termination (as defined below) by the Executive for Good
Reason (as defined below)).

For purposes of this definition, no act, or failure to act, on the Executive’s
part shall be considered “willful” unless done, or omitted to be done, by her
not in good faith and without reasonable belief that her action or omission was
in the best interest of the Company. Notwithstanding the foregoing, the
Executive’s employment shall not be deemed to have been terminated for Cause
unless (A) a reasonable notice shall have been given to her setting forth in
reasonable detail the reasons for the Company’s intentions to terminate for
Cause, and if such termination is pursuant to clause (i) or (iii) above, and
the damage to the Company is curable, only if the Executive has been provided a
period of ten (10) business days from receipt of such notice to cease the
actions or inactions, and she has not done so; (B) an opportunity shall have
been provided for the Executive together with her counsel, to be heard before
the Board; and (C) if such termination is pursuant to clause (i) or (iii)
above, delivery shall have been made to the Executive of a Notice of
Termination from the Board finding that in the good faith opinion of a majority
of the nonmanagement members of the Board she was guilty of conduct set forth
in clause (i) or (iii) above, and specifying the particulars thereof in
reasonable detail. Any determination of Cause made by the Company in
accordance with the foregoing procedure shall

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be made by the Company, in its sole discretion. Any such determination shall be final and binding on the
Executive.

     (c) By the Executive for Good Reason. The Executive may terminate her
employment during the Employment Period for Good Reason. For purposes of this
Agreement, “Good Reason” shall mean, without the Executive’s express written
consent, any of the following, unless such act or failure to act is corrected
prior to the Date of Termination specified in the Notice of Termination given
in respect thereof:

        (i)        any material breach by the Company of its obligations under this
Agreement, including but not limited to (x) a reduction in the
Executive’s Base Salary as such salary may be increased from time to time
thereafter, and (y) the Company’s requiring the Executive to be based
anywhere other than the offices that constitute the Company’s corporate
headquarters and/or the Company’s principal executive offices;

        (ii)       the Executive is removed from her position set forth in Section
2 hereof for any reason other than (A) by reason of death or Disability,
or (B) for Cause, or the failure to appoint or re-appoint the Executive
to such position with the Company;

        (iii)      the Executive is assigned any duties inconsistent with the
Executive’s position (including status, offices, titles and reporting
relationships), authority, duties or responsibilities as in effect as of
the Effective Date (excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and
which is remedied by the Company promptly following notice thereof given
by the Executive);

        (iv)      the failure to assume this Agreement by any successor to the
Company;

        (v)       any purported termination of the Executive’s employment that is
not effected pursuant to a Notice of Termination satisfying the
requirements of paragraph (d) below, which termination for purposes of
this Agreement shall be ineffective; or

        (vi)      termination of employment by the Executive that is deemed by a
majority of the nonmanagement members of the Board to constitute Good
Reason.

Notwithstanding the foregoing, the Company’s failure to extend this Agreement
in accordance with Section 1(b) shall not be deemed to constitute “Good Reason”
for termination of the Executive’s employment, and a termination shall not be
treated as a termination for Good Reason unless the Executive shall have
delivered a Notice of Termination within 90 days of the Executive’s having
actual knowledge of the occurrence of one of such events, stating that the
Executive intends to terminate employment for Good Reason. For purposes of
this Agreement, any good faith determination of “Good Reason” made by the
Executive shall be conclusive.

     (d) Notice of Termination. Any termination of the Executive’s employment
(other than by reason of death) shall be communicated by Notice of Termination
to the other party hereto in

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accordance with Section 11(b) of this Agreement. For purposes of this
Agreement, a “Notice of Termination,” means a written notice that indicates the
specific termination provision in this Agreement relied upon, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive’s employment under the provision so indicated, and
specifies the Date of Termination. The failure by the Executive or the Company
to set forth in the Notice of Termination any fact or circumstance that
contributes to a showing of Good Reason or Cause shall not waive any right of
the Executive or the Company under this Agreement or preclude the Executive or
the Company from asserting such fact or circumstance in enforcing the
Executive’s or the Company’s rights under this Agreement.

     (e) Date of Termination. “Date of Termination” shall mean:

              (i)       if the Executive’s employment is terminated by reason of
Disability, or by the Executive for Good Reason, other than a termination
pursuant to Section 4(c)(iv) of the definition of Good Reason, the date
specified in the Notice of Termination (which shall not be less than 30
nor more than 60 days from the date such Notice of Termination is given);

              (ii)      if the Executive’s employment is terminated by the Company for
Cause or without Cause, or by the Executive for other than Good Reason,
the date the Notice of Termination is received;

              (iii)     if the Executive’s employment is terminated by the Executive
for Good Reason pursuant to Section 4(c)(iv) hereof, the date upon which
any succession referred to therein becomes effective;

              (iv)     if the Executive’s employment is terminated by reason of death,
the date of death; and

              (v)      if the Executive’s employment is terminated by reason of the
expiration of the Employment Period, the last day of the Employment
Period.

    5.     Obligations of the Company upon Termination.

           (a) Termination by the Executive for Good Reason or by the Company
without Cause. If the Executive’s employment is terminated by the Executive
for Good Reason or by the Company without Cause:

             (i)      the Company shall pay to the Executive, within 10 days following
the Date of Termination, a lump sum amount in cash equal to the sum of:

                 (A)      the Executive’s Annual Base Salary through the Date of
Termination to the extent not previously paid;

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                 (B)      an amount equal to the target Bonus for the year prior to
the Date of Termination, to the extent such Bonus has been earned
but not paid, and for the year that includes the Date of
Termination, the target Bonus multiplied by a fraction, the
numerator of which shall be the number of days from the beginning
of such year to and including the Date of Termination and the
denominator of which shall be three hundred and sixty-five (365);
and

                 (C)      any compensation previously deferred by the Executive
(together with any accrued interest or earnings thereon) and any
accrued vacation pay, in each case to the extent not previously
paid.

The amounts specified in clauses (A), (B) and (C) hereof shall be
hereinafter referred to as the “Accrued Obligations”;

             (ii)      subject to the Executive’s continued compliance with Section 9
hereof, the Company shall pay to the Executive, within 10 days following
the Date of Termination, a lump sum amount, in cash, equal to one times
(two and one-half times if the Date of Termination occurs on or after the
date of a Change in Control) the sum of the Final Average Salary and the
Final Average Bonus, where (A) the “Final Average Salary” means the
average of the Executive’s Annual Base Salary as in effect for each of
the three years preceding the Date of Termination (or, if shorter, the
number of years from the Effective Date to the Date of Termination) and
(B) the “Final Average Bonus” means the average of the Bonuses awarded
to the Executive pursuant to the Annual Incentive Program with respect to
the three years preceding the Date of Termination (or, if shorter, the
number of years from the Effective Date to the Date of Termination, and
provided that, until such time as Executive has received a Bonus with
respect to 2004, the Final Average Bonus shall be deemed to be 70% of the
Executive’s Annual Base Salary as then in effect); provided, however,
that if the Executive is found in breach of the requirements in Section
9(b) of this Agreement, she shall repay to the Company a pro-rata share
of the lump sum to coincide with the period of time she was not in
compliance with Section 9 (that is, the lump sum shall be multiplied by a
fraction, the denominator of which is the number of days the Executive
was required to comply with Section 9(b), and the numerator of which is
the number of days the Executive was not in compliance, and the Executive
shall repay that amount to the Company) (the “Repayment”); and

             (iii)     subject to the Executive’s continued compliance with Section 9
hereof, the Company shall continue life, disability, accident and health
insurance benefits substantially similar to those that the Executive was
receiving immediately prior to the Date of Termination (or if applicable,
prior to the Change in Control, or thereafter, if higher) until the
earlier to occur of (i) the first anniversary of the Date of Termination
(or if the Date of Termination occurs on or after a Change in Control,
the date that is 30 months following the Date of Termination) or (ii)
such time as the Executive becomes

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eligible for comparable programs of a subsequent employer; provided, however, that in the event the Company is
unable to provide such benefits, the Company shall make annual payments
to the Executive in an amount such that following the Executive’s payment
of applicable taxes thereon, the Executive retains an amount equal to the
cost to the Executive, net of any cost that would otherwise be borne by
the Executive, of obtaining comparable life, disability, accident and
health insurance coverage. Benefits otherwise receivable by the
Executive pursuant to this Section 5(a)(iii) shall be reduced to the
extent the Executive is eligible for comparable coverage during the one
year (or 30-month, as the case may be) period following termination, and
any such eligibility for comparable coverage shall be reported to the
Company; and.

                  (iv)      all of the Executive’s stock options (vested or nonvested) shall
become exercisable and shall remain exercisable for one year, but in no event
shall such period exceed the term of the stock options; and all restrictions
pertaining to the Executive’s restricted stock or other equity based awards
shall lapse on the Date of Termination.

           (b) Termination By Reason of Death or Disability. If the Executive’s
employment shall be terminated by reason of the Executive’s death or
Disability, then the Company shall pay the Executive the amounts and benefits
described in clauses (a)(i) and (a)(iv) above (and solely in the case of
Disability, the benefits in clause (a)(iii) above), as well as all death and
disability benefits payable under group insurance programs and other fringe
benefit programs that the Company may from time to time make available to its
executive officers.

           (c) Termination By Company Upon Expiration of the Employment Period. If
the Executive’s employment shall be terminated by the Company (other than for
Cause) upon the expiration of the Employment Period, then the Company shall pay
to the Executive the amounts and benefits described in clauses (a)(i)-(iv)
above.

           (d) Termination by the Company for Cause or By the Executive for Other
than Good Reason. Subject to the provisions of Section 6 of this Agreement, if
the Executive’s employment shall be terminated by the Company for Cause or by
the Executive for other than Good Reason, death or Disability, in either case,
during the Employment Period, the Company shall have no further obligations to
the Executive under this Agreement other than the Accrued Obligations, and the
Executive shall have no further obligations to the Company under this Agreement
other than pursuant to Section 9(a) of this Agreement. All of the Executive’s
stock options that have not yet become exercisable shall expire and all of the
Executive’s restricted stock awards and other restricted equity based awards as
to which the applicable restrictions have not yet lapsed shall be forfeited on
the Date of Termination.

           (e) Certain Tax Consequences. Whether or not the Executive becomes
entitled to the payments and benefits described in this Section 5, if any of
the payments or benefits received or to be received by the Executive in
connection with a change in ownership or control of the

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Company (a “Statutory Change in Control”), as defined in section 280G of the
Internal Revenue Code of 1986, as amended (the “Code”), or the Executive’s
termination of employment (whether pursuant to the terms of this Agreement or
any other plan, arrangement or agreement with the Company, any person whose
actions result in a Statutory Change in Control or any person affiliated with
the Company or such person) (collectively, the “Severance Benefits”) will be
subject to any excise tax (the “Excise Tax”) imposed under section 4999 of the
Internal Revenue Code of 1986, as amended (the “Code”), the Company shall pay
to the Executive an additional amount equal to the Excise Tax (the “Excise Tax
Payment”).

           For purposes of determining whether any of the Severance Benefits will be
subject to the Excise Tax and the amount of such Excise Tax:

           (i)      all of the Severance Benefits shall be treated as “parachute
payments” within the meaning of Code section 280G(b)(2), and all “excess
parachute payments” within the meaning of Code section 280G(b)(1) shall
be treated as subject to the Excise Tax, unless, in the opinion of tax
counsel selected by the Company’s independent auditors and reasonably
acceptable to the Executive, such other payments or benefits (in whole or
in part) do not constitute parachute payments, including by reason of
Code section 280G(b)(4)(A), or such excess parachute payments (in whole
or in part) represent reasonable compensation for services actually
rendered, within the meaning of Code section 280G(b)(4)(B), in excess of
the “Base Amount” as defined in Code section 280G(b)(3) allocable to such
reasonable compensation, or are otherwise not subject to the Excise Tax;
and

           (ii)     the value of any non-cash benefits or any deferred payment or
benefit shall be determined by the Company’s independent auditors in
accordance with the principles of Code section 280G(d)(3) and (4).

           In the event that the Excise Tax is subsequently determined to be less
than the amount taken into account hereunder at the time of termination of the
Executive’s employment, the Executive shall repay to the Company, at the time
that the amount of such reduction in Excise Tax is finally determined (the
“Reduced Excise Tax”), the difference of the Excise Tax Payment and the Reduced
Excise Tax. In the event that the Excise Tax is determined to exceed the
amount taken into account hereunder at the time of the termination of the
Executive’s employment (including by reason of any payment the existence or
amount of which could not be determined at the time of the Excise Tax Payment),
the Company shall make an additional Excise Tax payment in respect of such
excess (plus any interest or penalties payable by the Executive with respect to
such excess) at the time that the amount of such excess is finally determined.
The Executive and the Company shall each reasonably cooperate with the other in
connection with any administrative or judicial proceedings concerning the
existence or amount of liability for Excise Tax with respect to the Severance
Benefits.

-8-

 

               (f) Other Fees and Expenses. With respect to a termination of
Executive’s employment prior to a Change in Control, the prevailing party shall
be entitled to recover from the other party to this Agreement, all reasonable
legal fees and expenses incurred in contesting or disputing any termination of
employment or in seeking to obtain or enforce any right or benefit to which
such party is entitled under this Agreement. With respect to a termination of
Executive’s employment following a Change in Control, the Company shall bear
its own legal fees and expenses in connection with any such dispute, but the
Company shall pay the Executive’s reasonable legal fees and expenses if the
Executive is the prevailing party in connection with any such dispute.

     6.     Non-Exclusivity of Rights. Nothing in this Agreement shall prevent or
limit the Executive’s continuing or future participation in any benefit plan,
program, policy or practice provided by the Company and for which the Executive
may qualify (except with respect to any benefit to which the Executive has
waived her rights in writing), nor shall anything herein limit or otherwise
affect such rights as the Executive may have under any other contract or
agreement entered into after the Effective Date with the Company. Amounts that
are vested benefits or that the Executive is otherwise entitled to receive
under any benefit plan, policy, practice or program of, or any contract or
agreement entered into after the date hereof with, the Company at or subsequent
to the Date of Termination, shall be payable in accordance with such benefit
plan, policy, practice, program, contract or agreement, except as explicitly
modified by this Agreement.

     7.     Full Settlement; Mitigation. Other than as provided in this Agreement,
the Company’s obligation to make the payments provided for in this Agreement
and otherwise to perform its obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim, right or action that
the Company may have against the Executive or others. The Executive shall not
be required to mitigate the amount of any payment or benefit provided for in
Section 5 hereof by seeking other employment or otherwise, nor (except as
specifically provided in Section 5 hereof) shall the amount of any payment or
benefit provided for in Section 5 hereof be reduced by any compensation earned
by the Executive as the result of employment by another employer or by
retirement benefits after the Date of Termination, or otherwise.

     8.     Arbitration. Except as otherwise provided in Section 9 hereof, the
parties agree that any dispute, claim, or controversy based on common law,
equity, or any federal, state, or local statute, ordinance, or regulation
(other than workers’ compensation claims) arising out of or relating in any way
to the Executive’s employment, the terms, benefits, and conditions of
employment, or concerning this Agreement or its termination and any resulting
termination of employment, including whether such dispute is arbitrable, shall
be settled by arbitration. This agreement to arbitrate includes but is not
limited to all claims for any form of illegal discrimination, improper or
unfair treatment or dismissal, and all tort claims. The Executive shall still
have a right to file a discrimination charge with a federal or state agency,
but the final resolution of any discrimination claim shall be submitted to
arbitration instead of a court or jury.

-9-

 

The arbitration proceeding shall be conducted under the employment dispute
resolution arbitration rules of the American Arbitration Association in effect
at the time a demand for arbitration under the rules is made. The decision of
the arbitrator(s), including determination of the amount of any damages
suffered, shall be exclusive, final, and binding on all parties, their heirs,
executors, administrators, successors and assigns.

     9.     Confidential Information; Non-Solicitation; Non-Competition. (a) The
Executive shall hold in a fiduciary capacity for the benefit of the Company all
secret, proprietary, or confidential materials, knowledge, data or any other
information relating to the Company or any of its affiliated companies, and
their respective businesses (“Confidential Information”), which shall have been
obtained by the Executive during the Executive’s employment by the Company or
any of its affiliated companies and that shall not have been or now or
hereafter have become public knowledge (other than by acts by the Executive or
representatives of the Executive in violation of this Agreement). During the
Employment Period and (a) for a period of five years thereafter with
respect to Confidential Information that does not include trade secrets, and
(b) any time thereafter with respect to Confidential Information that does
include trade secrets, the Executive shall not, without the prior written
consent of the Company or as may otherwise be required by law or legal process,
communicate or divulge any such information, knowledge or data to anyone other
than the Company and those designated by it.

             (b) In addition, the Executive shall not, at any time during the
Employment Period and for any period thereafter with respect to which the
Executive is in receipt of a severance benefit under this Agreement (by way of
illustration, if the Executive terminates her employment for Good Reason, for a
period of one year), (i) engage or become interested as an owner (other than as
an owner of less than 5% of the stock of a publicly owned company),
stockholder, partner, director, officer, employee (in an executive capacity),
consultant or otherwise in any business that is competitive with any business
conducted by the Company or any of its affiliated companies during the
Employment Period or as of the Date of Termination, as applicable or (ii)
recruit, solicit for employment, hire or engage any employee or individual
consultant of the Company or any person who was an employee or individual
consultant of the Company within two (2) years prior to the Date of
Termination. The Executive acknowledges that these provisions are necessary for
the Company’s protection and are not unreasonable, since she would be able to
obtain employment with companies whose businesses are not competitive with
those of the Company and its affiliated companies and would be able to recruit
and hire personnel other than employees of the Company. The duration and the
scope of these restrictions on the Executive’s activities are divisible, so
that if any provision of this paragraph is held or deemed to be invalid, that
provision shall be automatically modified to the extent necessary to make it
valid.

             The Executive acknowledges that a violation or attempted violation on the
Executive’s part of this Section 9 will cause irreparable damage to the
Company, and the Executive therefore agrees that the Company shall be entitled
as a matter of right to an injunction, out of any court of competent
jurisdiction, restraining any violation or further

-10-

 

violation of such promises by the Executive or the Executive’s employees,
partners or agents. The Executive agrees that such right to an injunction is
cumulative and in addition to whatever other remedies the Company may have
under law or equity.

     10.     Successors.

     (a) This Agreement is personal to the Executive and without the prior
written consent of the Company shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution.

     (b) This Agreement shall inure to the benefit of and be enforceable by
the Executive’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive
should die while any amount would still be payable hereunder if the Executive
had continued to live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to the Executive’s
devisee, legatee or other designee or, if there is no such designee, to the
Executive’s estate.

     (c) The Company shall require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
As used in this Agreement, “Company” shall mean the Company as defined
above and any successor to its business and/or assets that assumes and agrees
to perform this Agreement by operation of law, or otherwise. Prior to a Change
in Control, the term “Company” shall also mean any affiliate of the Company to
which the Executive may be transferred and the Company shall cause such
successor employer to be considered the “Company” and to be bound by the terms
of this Agreement and this Agreement shall be amended to so provide. Following
a Change in Control, the term “Company” shall not mean any affiliate of the
Company to which Executive may be transferred unless the Executive shall have
previously approved of such transfer in writing, in which case the Company
shall cause such successor employer to be considered the “Company” and to be
bound by the terms of this Agreement and this Agreement shall be amended to so
provide. Failure of the Company to obtain an assumption and agreement as
described in this Section 10(c) prior to the effective date of a succession
shall be a breach of this Agreement and shall entitle the Executive to
compensation from the Company in the same amount and on the same terms as the
Executive would be entitled to under this Agreement if the Executive were to
terminate the Executive’s employment for Good Reason, except that, for purposes
of implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination.

-11-

 

     11.     Miscellaneous.

     (a) This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware, without reference to the conflict of laws
provisions thereof. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect. No provision of this
Agreement may be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and signed by the Executive
and such officer as may be specifically designated by the CEO. No waiver by
either party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed
by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time. No
agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party which are
not expressly set forth in this Agreement.

     (b) All notices and other communications hereunder shall be in writing
and shall be given by hand delivery to the other party or by registered or
certified mail, return-receipt requested, postage prepaid, addressed as
follows:

If to the Executive:

Lisa E. Gordon-Hagerty

c/o USEC Inc.

2 Democracy Center

6903 Rockledge Drive

Bethesda, Maryland 20817-1818

If to the Company:

USEC Inc.

2 Democracy Center

6903 Rockledge Drive

Bethesda, Maryland 20817-1818

Attention: General Counsel

or to such other address as either party shall have furnished to the other in
writing in accordance with this Agreement. Notice and communications shall be
effective when actually received by the addressee.

     (c) If any provision of this Agreement shall be declared to be invalid or
unenforceable, in whole or in part, such invalidity or unenforceability shall
not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.

-12-

 

     (d) The Company may withhold from any amounts payable under this
Agreement such federal, state and local taxes as may be required to be withheld
pursuant to any applicable law or regulation.

     (e) This Agreement contains the entire understanding of the parties with
respect to the subject matter herein and supersedes any prior agreements
between the Company and the Executive. There are no restrictions, agreements,
promises, warranties, covenants or undertakings between the parties with
respect to the subject matter herein other than those expressly set forth
herein.

     (f) To the extent, and only to the extent, that a payment or benefit paid
or provided under this Agreement would also be paid or provided under the terms
of an applicable plan, program or arrangement, such applicable plan, program or
arrangement will be deemed to have been satisfied by the payment made or
benefit provided under this Agreement.

     (g) This Agreement may be signed in several counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.

     IN WITNESS WHEREOF, the Executive and the Company have caused this
Agreement to be executed as of the day and year first above written.

	 	 	 	 	 
	 	 	USEC Inc.
	 	 	 	 	 
	 	 	 	 	 
	 	 	
By:
	 	/s/ William H. Timbers
	 	 	 	 	

	 	 	 	 	William H. Timbers

President and Chief Executive Officer
	 	 	 	 	 
	 	 	 	 	 
	 	 	EXECUTIVE
	 	 	 	 	 
	 	 	 	 	 
	 	 	/s/ Lisa E. Gordon-Hagerty

	 	 	Lisa Gordon-Hagerty

-13-

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