Document:

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                                                                  EXHIBIT 10.40

                                AGREEMENT BETWEEN

                                 SOUTHDOWN, INC.

                           WAMPUM, PENNSYLVANIA PLANT

                                       AND

                         THE UNITED CEMENT, LIME GYPSUM

                               AND ALLIED WORKERS

                                    DIVISION

                   (INTERNATIONAL BROTHERHOOD OF BOILERMAKERS,

                    IRON SHIP BUILDERS, BLACKSMITHS, FORGERS,

                              AND HELPERS, AFL-CIO)

                              LOCAL UNION NO. D-173

                         EFFECTIVE DATE: AUGUST 29, 1999

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ARTICLE  I - AGREEMENT AND PURPOSE

1.1      This agreement is entered into this 29 day of August, 1999 for the
         purpose of maintaining the existing harmonious relationship and close
         cooperation between Southdown, Inc., hereinafter called the "Company",
         and members of the United Cement, Lime, Gypsum and Allied Workers
         Division (International Brotherhood of Boilermakers, Iron Ship
         Builders, Blacksmiths, Forgers and Helpers, AFL-CIO), hereinafter
         called the "Union", who are employees of the Wampum Plant of Southdown,
         Inc.

1.2      It is the continuing policy of the Company and the Union that the
         provisions of this Agreement shall be applied to all employees without
         regard to race, color, sex, religious creed, national origin, handicap
         or Vietnam era veteran status.

1.3      It is agreed that all applicable mutually agreed upon agreements,
         policies and practices have been incorporated in this Agreement, and
         any additional agreements, policies or practices must be mutually
         agreed upon by both parties from this date forward to become
         applicable. The Appendix and Letters of Intent, included within this
         booklet, are considered to be incorporated as a part of this Agreement.

ARTICLE II - UNION RECOGNITION AND SECURITY

2.1      The Company agrees to, recognize the Union as the sole bargaining agent
         for the employees of the Company's Wampum Plant insofar as working
         conditions, hours of work, and wages are concerned.

2.2      As a condition of employment, it is agreed that all eligible employees
         at the Wampum Plant shall become members of and remain in good standing
         with the Union within thirty (30) days after the signing of this
         Agreement. Newly hired employees shall become members of and remain in
         good standing with the Union within thirty (30) days from the date of
         hiring.

2.3      The term "employee" as used in this Agreement shall include only those
         employed in the job classifications attached in Appendix A.

2.4      The Company will deduct from the monthly earnings of any of its
         employees their Initiation Fee and Union Membership Dues, and will pay
         the same to the party to whom such employee directs the Company in
         writing. Each such employee desiring such deduction to be made from
         his/her earnings must present to the Company his signed order, which
         shall be substantially as follows:

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                  "I hereby authorize and direct Southdown, Inc. to deduct and
                  pay from my earnings accumulated to my credit my Initiation
                  Fee and Union Membership Dues, and pay same to . . . I further
                  agree to hold the Southdown, Inc. harmless on account of the
                  deductions and payments herein authorized.

                  Wampum Facility (Southdown, Inc.)
                  Signed
                         ------------------------------------
                  Timekeeper
                             --------------------------------
                  Employee Check No.                         "
                                     ------------------------

                  This authorization may be canceled by the Union member on any
                  anniversary date of this Agreement upon thirty (30) days prior
                  notice, in writing, to the Company and the Union.

2.5      The Company is willing at all times to meet its employees' committee
         and representatives of the International Union for the purpose of
         discussing wages, hours, and working conditions, with the object to
         reach a satisfactory agreement.

2.6      The Union shall furnish in writing to the Plant Manager the names of
         employees who will serve on the committee. The committee shall consist
         of not more than seven (7) and not less than three (3) members. If a
         vacancy occurs on the committee, the Plant Manager shall be informed,
         in writing, of the name of the new member before a meeting is held. No
         other members of the Union who are employees at the Wampum Plant are
         eligible to attend these meetings unless previously agreed to between
         the parties hereto.

2.7      Notwithstanding the provision of Article 2.2 above, any employee who is
         a member of and adheres to established and traditional tenets or
         teachings of a bona fide religion, body or sect which has historically
         held conscientious objections to joining or financially supporting a
         labor organization shall not be required to join or financially support
         the Union as a condition of employment; provided, however, that each
         such employee shall, as a condition of his or her employment, in lieu
         of the payment of periodic dues and initiation fees to the Union, pay
         sums equal to such dues and initiation fees to any one of the following
         non-religious charitable funds, which are exempt from taxation under
         Section 501 (c) (3) of the Internal Revenue Code:

                           1.   City of Hope
                           2.   American Cancer Society
                           3.   American Heart Association
                           4.   National Multiple Sclerosis Society
                           5.   American Red Cross

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         It is expressly understood that any such employee holding conscientious
         objections and choosing not to join or financially support the Union,
         who requests the Union to use the grievance - arbitration procedure on
         the employee's behalf, shall be required to pay the Union the
         reasonable costs of processing any grievance on his or her behalf,
         including reasonable costs of arbitration, if any.

2.8      Upon receipt from an employee authorizing payroll deduction and
         specifying the amount to be deducted, the Company will deduct voluntary
         contributions to the City of Hope. All amounts so deducted shall be
         remitted by the Company to the City of Hope. The Company shall be held
         harmless from any claim demand or action arising out of such
         deductions.

         Employees contributing to the City of Hope cannot discontinue or change
         such contribution for one year.

ARTICLE III - SUBCONTRACTING

3.1      The Company will not contract for production or maintenance work
         customarily performed by its own employees unless it is more
         economical, expeditious, and/or efficient to do otherwise.

3.2      The Company may enter into contract arrangements for obtaining raw
         materials, semi-finished or finished products.

3.3      Notwithstanding the above, the Company will not contract or subcontract
         work covered by Paragraphs (3.1) or (3.2) above if it will directly
         result in the, (1) laying off of bargaining unit employees, or (2) the
         reduction of hours of bargaining unit employees below 40 hours a week;
         or (3) reduction of employees to a lower rated classification.

3.4      Further (3.1), (3.2) and (3.3) above does not apply to new construction
         or to construction involved in major modification work. The Company may
         subcontract any work in connection with or related to new construction
         or major modification.

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3.5      The Company agrees to notify the Local Union in writing with a copy to
         the International or District Representative who services the Local
         Union, sent by registered mail, at least fourteen (14) days in advance
         if reasonably possible, and to meet with the Union, upon request by the
         Union, for explanation to the reasons causing the Company to decide to
         contract any production and maintenance work.
         The parties agree that while notification is an important part of
         working relationship between the parties and should be adhered to in
         order to reduce the number of disputes concerning sub-contracting the
         parties also recognize and agree that this Section of the Contract does
         not require any penalty when the Company fails to give proper written
         notice of its intention to sub-contract.

ARTICLE IV - UNION ACTIVITY

4.1      The Union Grievance Committee, representing the employees in matters
         including negotiations and consisting of not more than six (6)
         employees and the recording secretary, shall meet with the Company once
         a month as mutually agreed upon.

4.2      Insofar as practical, meetings will be conveniently scheduled so as to
         complete all business within normal working day for day employees. Any
         employee who is scheduled to work during the hours the meeting is held
         and who attends the meeting will be compensated only by multiplying his
         regular classified hourly wage rate by the straight time hours he
         attends the meeting.

4.3      When a meeting is scheduled at which a representative of the
         International Union or a representative of the Company from Corporate
         Headquarters will attend, any member of the committee who is scheduled
         to work the third shift immediately preceding the meeting will be
         excused from working the third shift and will be compensated by
         multiplying eight (8) hours at his regular classified hourly wage rate
         plus shift differential if the employee has attended the meeting.

4.4      Any member of the committee who is scheduled to work the second shift
         immediately following the meeting will be excused from working the
         second shift if the employee has attended the meeting for six (6)
         hours. In the event the employee is excused from working the second
         shift, he will be compensated by multiplying eight (8) hours at his
         regular classified hourly wage rate plus shift differential.

4.5      Any employee who is receiving sickness and accident benefits, or
         Worker's Compensation Benefits for the day of the meeting or who is
         absent due to disciplinary layoff shall not receive any compensation
         under this article.

4.6      Where possible, a member of the Grievance Committee shall be notified
         before any employee is suspended from work. If a member of the
         Grievance Committee is not notified prior to suspension, he shall be
         notified as soon as practical thereafter.

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4.7      The Company and the Union Grievance Committee shall meet prior to a
         discharge of an employee to review the facts of the case.

4.8      (1) Where there is a discussion between an hourly employee and a
         supervisor that is intended as a disciplinary measure resulting in
         written warning, the employee may request that a grievance
         committeeman, job steward or other designated employee be present.

         (2) It shall be the responsibility of the Union to appoint and have
         available on each shift a committeeman, job steward or other employee
         designated for purposes of this Section who shall be identified to the
         Company in writing.

         (3) It is not the intent of this Section to expand the total number of
         committeemen as provided for in Article 4.1.

4.9      Union activities shall not be conducted during working hours, except
         that, with the consent of the Company, a member or members of the Union
         Grievance Committee may try to adjust an existing problem between the
         Union and the Company. There shall be one (1) steward on each rotating
         shift who may, in the absence of a committee member, try to adjust an
         existing problem. Such consent will not be unreasonably withheld or
         delayed. Local Union officers and stewards off duty and representatives
         of the International Union shall, upon permission from the Company, be
         permitted on the Company's premises to investigate grievances. Such
         permission shall come from the Plant Manager or his designee and will
         not be unreasonably withheld or delayed.

4.10     An International Representative, upon permission from the Plant Manager
         or his designee, may be present at any of the above -mentioned
         meetings.

ARTICLE V - MANAGEMENT RIGHTS

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

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ARTICLE VI - WAGES

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

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

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

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

6.3      Each employee regularly scheduled to work on the 2nd shift shall be
         paid a premium of sixty cents ($.60) for all hours worked by him or her
         on that shift. Each employee regularly scheduled to work on the 3rd
         shift shall be paid eighty-five cents ($.85) for all hours worked by
         him or her on that shift. These premium rates do not apply to day
         workers even though they may work over into a premium pay shift. If,
         however, the day worker is scheduled to take the place of a regular
         scheduled shift worker, then the premium rate applies. Employees called
         out will receive the appropriate shift premium for hours worked prior
         to their normal shift.

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

6.5      TIME CHANGES - STANDARD TIME AND DAY LIGHT SAVINGS TIME
         When clocks are turned ahead one (1) hour and an employee's work
         schedule is reduced one (1) hour by this change, she/he will be given
         the option of working one (1) additional hour for a full shift's pay.
         When the clocks are turned back one (1) hour affected employees shall
         receive one (1) hour at the applicable overtime rate.

6.6      The Company may at its discretion increase wage in any class or to an
         individual in any class without necessitating a change in the rate of
         any individual or class.

6.7      The employees will participate in a gain-sharing program developed by
         the Company, beginning August 1, 1999 and continuing through the term
         of this Agreement.

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ARTICLE VII - VACATIONS WITH PAY

7.1      Any employee who works and receives earnings during at least thirteen
         (13) weeks in each calendar year shall be granted a vacation off work
         without loss of pay, according to the following schedule.

7.2      Notwithstanding Section 7.3 employees hired prior to May 1, 1996 will
         continue to accrue vacation eligibility in accordance with the vacation
         schedule in the 1996-1999 Agreement through December 31, 2001.
         Effective January 1, 2002, employees eligible for 6 and 7 weeks
         vacations shall be grand-fathered for that vacation for the duration of
         their employment.

7.3      All employees who have completed one (1) or more anniversary years of
         service, but less than five (5) years of service, will be entitled to
         two (2) weeks of vacation, provided they meet all other requirements of
         this Article. Employees who have completed five (5) or more anniversary
         years of service, but less than fifteen (15) years of service will be
         entitled to three (3) weeks of vacation, provided they meet all other
         requirements of this Article. Employees who have completed fifteen (15)
         or more anniversary years of service, but less than twenty (25) years
         of service, will be entitled to four (4) weeks of vacation, provided
         they meet all other requirements of this Article. Employees who have
         completed twenty-five (25) or more anniversary years of service, will
         be entitled to five (5) weeks of vacation. provided they meet all other
         requirements of this Article.

7.4      Vacation pay will be based on a forty (40) hour week at the rate of the
         permanently assigned classification on which an employee is working at
         the time he takes his vacation. If an employee has held a single higher
         rated classification for more than six (6) months during the year
         preceding his vacation, he will receive vacation pay computed at the
         higher rate. Vacation pay shall include appropriate shift differential
         for those on fixed shifts. Employees working on rotating shifts shall
         be paid an average of the rates for the rotating shifts involved. Upon
         sufficient notice given to the Personnel Clerk, the Company will give
         an employee his vacation pay on his last shift prior to the beginning
         of his vacation.

7.5      Vacations will not be cumulative, but so far as practical, be granted
         at times most desired by employees, but the final right to allotment of
         vacation periods is exclusively reserved to the Company in order to
         insure the orderly operation of the plant. In exercising its right to
         allot vacation periods, the Company will not require any employee who
         is on layoff to take his vacation during periods of plant shutdown or
         curtailment of operation. Where requested vacation periods conflict,
         preference shall be given to the older employee in point of service.

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7.6      It is further agreed that if any employees have previously selected
         their vacation period so that it occurs during an unforeseen shut-down,
         such vacation period shall not be changed. Vacations shall be taken by
         the employee within the calendar year in which it is granted.

7.7      The Company shall submit appropriate application blanks to the
         employees within the first week of November, and they are to be
         returned to the Company within one (1) month. In the event an employee
         fails to return this form to the Company, then, after this one (1)
         month period, the Company shall designate the employee's vacation
         period, and notify the employee who fails to return this application to
         the Company and the Union of the vacation period designated for the
         employee. All vacation blanks received from employees or issued by the
         Company shall be returned to the employees not later than January 1st.

7.8      An employee with four (4) or more weeks of vacation can take pay in
         lieu of vacation for a maximum of two (2) weeks of his total vacation
         eligibility. The above employee may request his payment at any time
         from January 1st till the date he turns in his application blank for
         his vacation selection. He will receive payment the next pay period
         following the date he makes the request.

         However, if the above employee does not request two weeks pay in lieu
         of time off, he may request up to two weeks pay in lieu of time off
         during the calendar year during periods of plant shutdown or
         curtailment of operations. Such payment will be made the next pay
         period following the date he makes such request.

         An employee with four or more weeks vacation, may change two of his
         scheduled weeks of vacation and reschedule them during a plant shutdown
         or production curtailment provided that the departmental vacation rules
         will allow him to be absent from the department.

7.9      Any change in an employee's selected and designated vacation period
         must be approved by the Company and the Union committee, except as
         provided in paragraph 7.8 above.

 7.10    Employees entitled to two (2) or more weeks of vacation may be
         permitted to take such vacations in two (2) separate periods of not
         less than one (1) week each. Seniority preference, however, can be
         exercised in only (1) of such vacation periods.

 7.11    In addition to the vacation general rules that are now in effect, the
         following procedure, which indicates how paragraphs 7.5 through 7.10
         will be applied, shall be followed:

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         7.11.1   Step I. The most senior employee in a department will be asked
                  to choose his preference period which must be a period of one
                  or more consecutive weeks. After the aforementioned weeks have
                  been selected, each man in terms of descending seniority will
                  be asked to select his preference period until all employees
                  in the department have made their preference choice.

         7.11.2   Step II. Next, the most senior employee in the department will
                  again be asked to make a selection for those weeks remaining
                  that have not been earmarked as a preference period. He will
                  now have made a selection for all weeks for which he is
                  eligible. After the aforementioned weeks have been selected,
                  each man in terms of descending seniority will be asked to
                  select his "other than preference" weeks until the least
                  senior man had made his selection. The procedure for this
                  department is now complete.

7.12     Employees who have one (1) or more years of service and who are
         separated from service for any reason will receive vacation pay due
         them on the following basis: One-twelfth (1/12) vacation credit for
         each one hundred (100) hours worked in his current calendar year.

7.13     In the event the employment of any such employee is terminated for any
         reason, the Company shall pay to the employee, or to his beneficiary in
         the event of his death, all vacation pay due.

7.14     If an employee enters military service and is not expected to return
         before the end of the calendar year, the Company shall pay to the
         employee, all vacation pay due.

7.15     Employees who wish to have a separate vacation check issued must give
         the Company two weeks notice and they will be only issued on payroll
         weeks.

7.16     An employee will be allowed to take one (1) week of vacation on a day
         to day basis for prearranged time off with at least seven (7) days
         prior notice. The Company will maintain the corresponding percentage of
         employees for vacation purposes at 14.5% plus two extra employees off
         during May, June, July, August and September. Vacation taken on a day
         to day basis, as noted in this paragraph, shall not be included in the
         calculation of the percentage of employees permitted off for vacation
         purposes.

7.17     The final right of allotment of vacation periods is exclusively
         reserved to the Company in order to ensure the orderly operation of the
         plant.

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ARTICLE VIII - LEAVES OF ABSENCE

8.1      JURY DUTY It is agreed that the Company shall make up the wage loss
         incurred by a regular employee (as distinguished from a probationary
         employee) because of jury service by payment of the difference between
         the amount received for such jury service on the day such employee
         would have been regularly scheduled to work and their regular rate of
         pay. Any employee reporting for jury duty will not be required to work
         their regular shift that calendar day or with management approval an
         adjoining calendar day may be substituted for third shift employees.
         The employee will be excused for the entire day without loss of pay.
         Hours spent on jury service and paid for hereunder shall be considered
         as time actually worked for all overtime purposes. Further as outlined
         above, the Company shall make up the wage loss incurred by an employee
         when subpoenaed as a witness in an action when the employee or the
         Union or the Company are neither the plaintiff nor the defendant.

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

8.2      MILITARY LEAVE Employees with one (1) year seniority who are members of
         organized reserve components of the Armed Forces, including the
         National Guard, will be allowed leave of absence annually for the
         purpose of attending required military training encampments or cruises.
         The Company will pay any employee who goes on such leave of absence the
         difference between the employee's straight time pay for up to two (2)
         weeks (ten (10) working days) annually and the employee's military pay
         including longevity pay but excluding all allowances such as rent,
         subsistence, uniform, and travel. Payment will be made when the
         employee returns from reserve training on presentation of satisfactory
         proof of the amount of pay received.

8.3      FUNERAL LEAVE An employee upon the notification of the death of his or
         her father, mother, spouse, son, son-in-law, daughter, daughter-in-law,
         brother, sister, stepfather, stepmother, stepson, stepdaughter,
         grandson, granddaughter, half-sister, half-brother, mother-in-law,
         father-in-law, brother-in-law, sister-in-law, grandparents, and spouses
         grandparents shall be granted his or her next three (3) scheduled
         working days off with pay (four (4) days off with pay if the employee
         is required to travel beyond a radius of 500 miles).

         The foregoing to the contrary notwithstanding no bereavement payment
         will be made unless the employee attends the funeral nor will payment
         be made if there are more than fourteen calendar days between the date
         of death and the next scheduled workday.

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         Payment by the Company for such time lost shall be on the basis of
         eight (8) hours per day at the employee's regular straight time hourly
         rate, including shift differential.

         As used herein, brother-in-law is defined to mean (1) the brother of
         one's husband or wife, (2) the husband of ones sister, (3) the husband
         of the sister of one's spouse: and sister-in-law is defined to mean (1)
         the sister of one's husband or wife, (2) the wife of one's brother, (3)
         the wife of the brother of one's spouse.

         The above clause shall not apply to an employee who is laid off, except
         that when an employee is notified to return to work on or before the
         date of the funeral, he shall be granted full funeral leave with pay.

8.4      UNION LEAVE Any employee elected or appointed to a full time position
         with the International Brotherhood of Boilermakers, Cement, Lime,
         Gypsum, and Allied Workers, or Local Union or the AFL-CIO or any of its
         subordinate bodies, shall be granted an indefinite leave of absence,
         providing thirty (30) days notice is given the Company prior to the
         beginning of such leave. During such leave seniority shall accumulate.
         Insurance benefits shall be suspended after thirty (30) days of such
         leave and will again be in effect the first day of returning to work
         with the Company. Upon returning to work, such employee will be
         reinstated on his former job, providing it is still in existence; if
         not, he shall be eligible to apply for any job within the Bargaining
         Unit by means of the existing bidding procedure, or by bumping. The
         Company agrees to consent to the absence of no more than one (1)
         employee at any time.

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

         After a waiting period of one (1) week (waived if the employee is
         hospitalized as an in-patient), the disability benefits are payable at
         a rate of $49 per day for a maximum of five days per week. A disabled
         employee may receive weekly sickness and accident benefits during the
         period of disability not to exceed five (5) months. It is the
         employee's responsibility to make application for this benefit and the
         attending physician must document the nature of the disability and
         expected date of return to work.

         No benefits shall be payable for the following:

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

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

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

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

         This benefit terminates upon retirement or upon termination of
         employment.

8.6      PERSONAL LEAVE Subject to the approval of the Company, employees
         requesting a leave of absence in writing for personal reasons may be
         granted leaves of absence not to exceed thirty (30) calendar days.

ARTICLE IX - GRIEVANCE PROCEDURE

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

         9.1.1    STEP I. The complaint, within fifteen (15) days of its
                  occurrence, or the occurrence of the matter out of which the
                  complaint arises, may be taken up by the employee involved,
                  with or without Union representation, with his Supervisor. If
                  the issue is not resolved verbally, the matter shall be
                  reduced to writing, stating specific article(s) and
                  paragraph(s) of the Contract that are alleged to have been
                  violated. This will be presented to the employee's Supervisor
                  within 10 days for the grievance to be considered and
                  processed. The grievance will be answered in writing within
                  five (5) days.

         9.1.2    STEP II. If no satisfactory settlement is reached in Step I,
                  the matter shall be presented to the Plant Manager and/or
                  Designee within five (5) days from the date of answer by the
                  Supervisor. The Plant Manager and/or the Director of
                  Industrial Relations will meet with the Grievance Committee to
                  hear and discuss the grievance at the monthly grievance
                  meeting unless the matter requires immediate attention. The
                  Company shall answer the grievance in writing within five (5)
                  days after said meeting.

         9.1.3    STEP III. If no agreement is reached in Step II, the Committee
                  may, within five (5) days of the receipt of the above answer,
                  refer the matter to higher officials of the Company and the
                  Union, who may attend a meeting to be held within thirty (30)
                  days upon request.

         9.1.4    STEP IV.

                  (a)    Any grievance not settled in Step III above may be
                         referred to arbitration. Notice to refer a grievance to
                         arbitration shall be given in writing within fifteen
                         (15) days after being notified of the decision rendered
                         in Step III or the matter will be considered closed.
                         Only one (1) grievance (Arbitrability and grievance to
                         be considered as a single grievance) may be submitted
                         to or under review by any one (1) Arbitrator at any one
                         (1) time unless by prior mutual written consent of the
                         parties.

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

                    (c)  Any grievance referred to arbitration shall be heard as
                         soon as possible and a decision rendered within thirty
                         (30) days of the hearing or the date of postmark of the
                         post hearing briefs. The arbitrator shall have no power
                         to add to or subtract from or change, modify or amend
                         any of the provisions of this Agreement. The decision
                         rendered by the Arbitrator will be final and binding
                         upon the Union, the Company, the grievant, and all the
                         employees covered by this Agreement. The Arbitrator
                         selected pursuant to this Article shall interpret and
                         apply the terms of this Agreement; he/she shall not
                         substitute his/her discretion and judgement for that of
                         the Company. If the Arbitrator finds that a
                         dischargeable offense was committed by the employee,
                         he/she shall not substitute his/her judgement for that
                         of the Company as to whether discharge or a more
                         lenient penalty was appropriate in a particular case.

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

                    (e)  Each party hereto shall pay the expense incurred in the
                         presentation of its own case, and the expenses incident
                         to the services of the Arbitrator, including the cost
                         of the transcript, shall be shared equally by the
                         Company and the Union.

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

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

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

<PAGE>   15

9.5      Grievances presented in any of the regular steps set forth and not
         answered within the time specified or as the same may be extended by
         mutual agreement shall be considered appealed to the next step of the
         grievance procedure.

9.6      Disciplinary letters issued to employees will remain in the Company's
         employee file. At the end of the twelve (12) month period, the
         disciplinary letters will not be held against the employee.

ARTICLE X - NON-BARGAINING UNIT EMPLOYEES

10.1     The Company will take immediate actions to ensure that non-bargaining
         unit employees do not perform routine bargaining unit work, with the
         following exceptions: work involving corrective action which must be
         performed expeditiously; instruction or training of employees;
         demonstration; inspection or testing of equipment; work of an emergency
         nature; and development work for new process and/or procedures.

ARTICLE XI - STRIKES AND LOCKOUTS

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

ARTICLE XII - HOLIDAYS

12.1     New Year's Day, Good Friday, Memorial Day, Independence Day, Labor Day,
         Veteran's Day, Thanksgiving Day, the first day of Pennsylvania Deer
         Season, the day before Christmas, Christmas Day and one floating
         holiday are recognized as "holidays".

12.2     If any such holiday falls on Sunday, the following Monday shall be the
         recognized holiday. The holiday hours shall be those hours within the
         24 hour period, commencing with the beginning of the first shift on the
         morning of the holiday and ending at the beginning of the first shift
         the following day.

12.3     If any holiday falls on Saturday, the preceding Friday shall be the
         recognized holiday.

<PAGE>   16

12.4     Employees who are scheduled to work on a holiday shall be paid two and
         one half (2.5) times the classified hourly rate.

12.5     Hours worked on a holiday in excess of eight (8) in a work day, in
         excess of forty (40) in a work week, on off days, and on callouts shall
         be paid for at the applicable overtime rate.

12.6     If no work is required of an employee on the above holidays, he will
         receive eight (8) hours pay at his regular straight time rate, provided
         he meets the following qualifications:

        12.6.1 The employee shall have been employed by the Company for at least
               thirty (30) Calendar days prior to the holiday.

        12.6.2 The employee shall have worked his last scheduled working day
               prior to and his next scheduled working day after such holiday
               unless excused therefrom by the Plant Manager on account of
               sickness, accident, death in the family, or other excused
               absence. In no event shall a holiday be paid for unless an
               employee has also worked during the thirty (30) day period
               immediately preceding or immediately following the holiday except
               that the thirty day limitation shall not apply if the employee
               was temporarily absent from work because of sickness, accident,
               or layoff. In any event, the employee must work at least one (1)
               day in the calendar year in which the holiday is granted.

12.7     If an employee is scheduled to work on a holiday and fails to work, he
         shall not receive holiday pay.

12.8     If an employee works on a holiday, the holiday shall be counted as a
         day worked for computing his weekly overtime. Paid holiday is to count
         as day worked for overtime purposes, provided holiday falls on one of
         employee's scheduled work days and he would have worked that day except
         for holiday observance.

12.9     Work schedules for each work week which include a holiday will be
         posted prior to the end of the first shift on Thursday of the previous
         week. If an employee is scheduled to work on a holiday, but then is
         instructed by the Company not to work he shall receive for that holiday
         eight (8) hours pay at two and one-half (2.5) times his regular
         straight time hourly rate.

12.10    The phrase "straight time hourly wage rate" as used solely in Article
         XII, Holidays, shall mean the higher of either the employee's regular
         straight time hourly wage rate or the highest straight time hourly wage
         rate for a job on which the employee works at least eight (8)
         consecutive hours in the work week in which the holiday falls provided
         (1) that the eight (8) hours had been previously scheduled or (2) the
         hours are worked the day before or the day after the holiday whether
         previously scheduled or not.

<PAGE>   17

12.11    The Company will consider the request by an employee to take his
         "floating holiday" the day before or the day after a scheduled holiday.
         This request must be designated when the employee turns in his annual
         vacation request. The efficient operation of the plant and its
         departments will be the first consideration and the Company reserves
         the right to decline any individual request. If there is a scheduling
         conflict between two or more employees, when the Company grants a
         request which those employee have made for the same floating holiday,
         seniority will govern.

ARTICLE XIII - SENIORITY

13.1     Seniority shall consist of an employee's length of continuous service
         with the Company since the employee's last day of hire at its facility
         located at Wampum, Pennsylvania, including the bargaining unit jobs at
         the quarry.

13.2     Each new employee shall be considered as a probationary employee for
         the first ninety (90) days of actual work after which the employee's
         seniority shall date back to his or her date of hire. There shall be no
         seniority among probationary employees. Such employees may be laid off
         or discharged as exclusively determined by the Company.

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

         13.3.1 is discharged;

         13.3.2 is terminated upon permanent shutdown of the Wampum
                facilities;

         13.3.3 is laid off for a period of thirty-six (36) months or the
                length of his or her seniority as of his or her last day of
                work, whichever period is shorter;

         13.3.4 voluntarily quits which shall be deemed to include:

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

                (b) an absence for three (3) consecutive scheduled work days
                    without notifying the Company or reporting to work unless
                    excused by Management in advance;

<PAGE>   18

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

         13.3.5 retires.

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

13.5     An employee on continuous absence due to disability shall accrue
         seniority and retain recall rights for a period not to exceed
         thirty-six (36) months, or sixty (60) months if the employee was
         injured on the job. An employee absent because of disability shall only
         be returned to work after he or she is physically able to perform the
         job. However, should such an employee be declared totally and
         permanently disabled prior to thirty-six (36) months or sixty (60)
         months for work related injury, such employee's name shall be removed
         from the payroll and a notice to this effect will be sent to his or her
         last address as shown on Company records.

13.6     If an incapacitated employee is released to return to work and is not
         physically able to perform the job that the employee was performing
         before the disability occurred, the released employee shall be allowed,
         subject to mutual agreement between the Company and the Union, to
         displace a less senior employee in a job that the released employee is
         physically capable of performing. The displaced employee shall be the
         least senior person in the job classification. Qualification will be
         handled as in the normal layoff procedure outlined in Article 14.2. If
         a less senior employee is displaced from their job, the displaced
         employee, with the ability and qualification to perform another job,
         shall be allowed to also displace a less senior employee following the
         same procedure.

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

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

<PAGE>   19

ARTICLE XIV - LAYOFF

14.1     The Company recognizes that all employees shall retain the right to
         seniority preference in cases of layoffs, production curtailment,
         temporary shutdown and recall. The last employee hired shall be the
         first laid off and the last laid off the first rehired. Such
         preferences in the cases of layoffs and recall shall take into
         consideration the employee's ability to perform the available work and
         the efficient operations of the operation. It is recognized that, in
         periods where business conditions necessitate that the level of
         production be reduced to a point where only a minimum of employees is
         required, it shall be necessary, in some cases, to deviate from strict
         plant seniority in order that some positions be available to service
         and adjust the equipment when production requirements increase. When
         deviating from strict plant seniority, the Company will keep the most
         senior, qualified employees, as determined by the Company, in the
         classification(s) needed to service and adjust such equipment. If the
         Company does not layoff in accordance with seniority, the Company will
         meet with the Union to explain the reasons prior to the layoff.

14.2     In the event that an employee is displaced for any reason, other than
         disciplinary, the employee may elect to exercise plant seniority to
         displace the least senior person in a position the senior employee is
         qualified to perform after being placed on the job. To qualify, it must
         be reasonable to expect that the senior employee can demonstrate the
         ability to adequately perform a satisfactory amount of the primary
         duties within a reasonable amount of time not to exceed (90) ninety
         calendar days as determined by the Company.

14.3     When an employee has been laid off or displaced because of permanent
         changes in the working force and/or in the event the Company constructs
         a new cement manufacturing plant that will affect the employment status
         of an employee in the Wampum plant bargaining unit, such employee may
         make written application within fifteen (15) days of layoff for
         employment in the new plant and be given preferential employment rights
         for the next highest rated vacant job the employee is capable of
         performing in that plant. Any such employee will maintain his last hire
         date for employee benefit purposes. Seniority rights at the Wampum
         plant shall terminate upon the completion of the employee's
         probationary status at the new plant.

ARTICLE XV - JOB BIDDING

15.1     When the Company determines a vacancy exists, other than a minimum pay
         job, the Company will post a notice of such fact. Said vacancies shall
         be posted for seven (7) days to allow any employee in a classification
         whose straight time hourly rate is less than the bid job to make
         application in writing for such job. The Company will consider every
         application in terms of:

<PAGE>   20

          15.1.1 Seniority

          15.1.2 The applicant's skill and ability measured against the
                 requirements of the job.

          Where two or more applicant's qualifications in (15.1.2) are
          relatively equal, seniority shall govern.

          Knowledge, training, skill and ability gained while holding jobs under
          the bid system and seniority will be given consideration in making
          promotions, layoffs, or reductions in work force.

          If an employee proves unsatisfactory, he/she shall be reinstated to
          his/her previous job, and the Company will consider the remaining
          applicants in accordance with the above.

          This article does not require the Company to award a job to any
          applicant if no applicants are qualified to perform the work.

          The Company has the right to assign any employee to fill a new job or
          to fill a vacancy until the job has been awarded.

          The Company will meet with Local Union Committee to explain its
          decision when the Company awards a job to a junior applicant. Any
          senior applicant shall have the right to challenge the Company's award
          by filing a grievance in a timely manner. Any employee reinstated to
          his previous job shall have the right to challenge his
          disqualification by filing a grievance in a timely manner.

15.2      Prior to the time that bids are removed from the bid box, an employee
          may withdraw his bid by placing a withdrawal slip in the bid box. Bid
          boxes will contain two (2) locks; one for the Company and one for the
          Union.

15.3      Any employee can give the Company a letter which lists in order of
          preference all jobs that the employee wishes to bid if such jobs
          become vacant and are posted while the employee is absent form work
          because of a scheduled vacation or due to an illness or an injury.
          Furthermore, if the Company creates and post a new job during such
          period that an employee is absent from work due to an illness or an
          injury, the Company will use its best efforts to notify the employee
          about such job no later than the last day such job is posted to learn
          whether the employee wishes to bid on the job.

15.4      An employee who bid for and is awarded a permanent job can bid for the
          same permanent job even though it is in the same bracket if the
          employee's sole reason is to work different day and/or shifts.

          An employee who bids and is awarded a job shall receive the rate of
          the new job when he/she moves on the job.

<PAGE>   21

15.5      If there are no applicants or if there are no applicants qualified to
          perform the work, the Company at it option (1) can hire a new employee
          who if qualified to perform the work for the vacant or new job, or (2)
          award the job to the least senior laborer and train her/him or train
          the most senior applicant. This statement of intent shall not limit
          the Company's right to disqualify the employee if the employee fails
          to perform all the duties of the job within a reasonable period of
          time.

15.6      Temporary Reassignment. An employee who is temporarily assigned by a
          supervisor to perform work of a higher paid job classification will be
          paid the rate of such higher job classification for time actually
          worked, whichever is greater. An employee temporarily assigned by a
          supervisor to perform work in an equal or lower paid classification
          will be paid the base hourly wage rate of the employee's permanent
          classification.

15.7      In no event shall the Company be requested or required to post any job
          temporarily vacated by reason of vacations, illness, or injury.

15.8      SUMMER HELP PROGRAM

          15.8.1  Temporary summer help employees may be employed between May 1
                  and September 30, or longer if there is a mutual agreement
                  between the Union and the Company.

          15.8.2  Preference will be given to college students who are sons and
                  daughters of employees in applying for summer help positions.

          15.8.3  The Company reserves the sole right to determine who will be
                  hired.

          15.8.4  Summer help employees will be treated as "at will"
                  probationary employees and may be terminated by the Company
                  with or without cause or reason. Summer help employees will
                  not be entitled to participate in benefit plans found in
                  Article XX or paid leaves in Article VIII. Summer help
                  employees will not bid jobs but may be temporarily assigned to
                  various jobs by the Company.

          15.8.5  No summer employee will be hired when any regular employee is
                  on layoff.

ARTICLE  XVI - WORKWEEK AND OVERTIME

16.1      HOURS OF WORK

          Eight (8) hours shall be the regular work day and forty (40) hours
          shall be the regular work week. This shall not constitute a guarantee
          of work. The work day shall commence with the beginning of the morning
          shift and work week shall commence with the beginning of the morning
          shift on Sunday.

<PAGE>   22

16.2      WORK SCHEDULES

          16.2.1  Work schedules for each work week will be posted on Thursday
                  of the previous week prior to the end of the first shift. If
                  an employee's work schedule is changed after the end of the
                  first shift of the preceding Thursday a thirty-five dollar
                  ($35.00) premium shall be paid in addition to whatever
                  compensation the employee is otherwise entitled to receive
                  under any other Section of the Agreement.

          16.2.2  If any employee's schedule is changed after the Thursday
                  posting as a result of an employee who is absent from the
                  plant not notifying the Company by 9:00 A.M. on the date of
                  the posting that he will be available for work the following
                  week, no schedule penalty shall be paid to the employees so
                  affected including the employee returning to work.

          16.2.3  The above exemption from the scheduling clause penalty shall
                  not apply to schedules changed as a result of an employee
                  returning from vacation, a floating holiday, bereavement leave
                  or jury duty.

          16.2.4  The current practice of scheduling an employee so that the
                  employee has two consecutive days off work under normal
                  working conditions shall not be changed during the term of
                  this Agreement except by written agreement of the Company and
                  Union.

          16.2.5  When the Company changes an employee's schedule, the Company
                  will explain to the employee the reason for the change and the
                  estimated duration of the change. The estimated duration of
                  the change is provided the employee solely to assist the
                  employee in personal planning and does not limit the Company's
                  right to increase or decrease the duration of the change.

          16.2.6  If the Company decides that the work schedule for a job should
                  be permanently changed, the Company will eliminate the old job
                  and bid the new job.

          16.2.7  Twenty (20) minutes prior to the end of the shift the whistle
                  will blow. This will provide ample time for employees to put
                  tools away and shower. As soon as employees' tools are put
                  away, they may immediately proceed to the showers. Employees
                  should stay on their job until this whistle blows.

16.3      RATE OF PAY - OVERTIME The applicable overtime rate shall be time and
          one-half (1.5) the employee's straight time hourly rate for hours
          worked over eight (8) in a day or over forty (40) in a week and double
          time (2X) for all hours worked over twelve (12) except on a holiday,
          in which case the applicable rate shall be:

<PAGE>   23

          16.3.1  SUNDAY WORK All hours worked by an employee on Sunday which
                  are not paid for on a premium and/or overtime basis shall be
                  paid at the rate of one and one-half (1.5) times the
                  classified hourly rate, exclusive of shift differentials.
                  Callouts on Sunday will be paid at double (2X) time. There
                  shall be no duplication or pyramiding of premium pay and/or
                  overtime under this provision.

          16.3.2  HOLIDAY WORKED Hours worked on a holiday will be paid at two
                  and half (2.5X) times in lieu of holiday pay.

          If an employee does not work a regularly scheduled workday through
          action of the Company, excused absence or because of a holiday, that
          day shall be considered as actually a day worked for all overtime
          purposes.

16.4      SEVENTH CONSECUTIVE DAY: If an employee actually works seven (7)
          consecutive workdays in the plant workweek regardless of the number of
          hours worked on any workday, the employee shall be compensated by
          multiplying the classified hourly wage rate by one (1.0) for each and
          every hour worked during the seventh consecutive workday, and this
          premium shall be paid in addition to whatever compensation the
          employee is otherwise entitled to receive under any other section of
          the Agreement.

16.5      CALLOUTS AND OFF-DAYS. In case an employee is called for emergency
          work during any hour in the day or week, in addition to his regular
          schedule, he shall receive a minimum of four (4) hours pay for such
          work, at the applicable overtime rate. However, if he is notified
          before the end of his regular shift to report early, it shall not be
          considered a callout. Callout hours and off-day hours are overtime
          hours.

16.6      REPORTING PAY. Any employee who is required to report for work shall
          be given at least four (4) hours pay at the classified hourly rate,
          and shall receive full time pay for all time thereafter that he is
          required to remain on the premises ready for work. Any employee put to
          work on his regular working day shall receive a full day's pay at the
          classified hourly rate.

          The above does not apply to an employee who is returning to work from
          a medical absence who has not given the company 24 hours advance
          notice of his return.

16.7      After an employee has been engaged in work for twelve (12) consecutive
          hours, he shall be paid for all consecutive hours worked immediately
          succeeding and in excess of such twelve (12) hours at double (2X) his
          regular straight time hourly rate. If an employee is being paid the
          rate of double time under the foregoing paragraphs, his rate of pay
          shall not be reduced when his work continues into or overlaps his
          regular shift. However, the Company may exercise either of the
          following options:

<PAGE>   24

          16.7.1  The Company may instruct the employee to continue to the end
                  of the shift at the double time rate, or

          16.7.2  The Company may send the employee home at any time during the
                  shift provided the remainder of the shift is paid for at
                  straight time.

16.8      Overtime paid for on a daily basis shall not be duplicated on a weekly
          basis.

16.9      OVERTIME:

          16.9.1  Every reasonable effort will be made by the Company to avoid
                  requesting any employee to work overtime and the Company will
                  consider under the circumstances involved any reasonable
                  excuse from an employee for not working the overtime. During
                  the extended period of scheduled overtime, the Company will
                  give special consideration to an employee's request to be
                  excused from overtime work because of fatigue as long as it is
                  consistent with the Labor Agreement and plant operational
                  requirements. However it is understood that each employee is
                  expected to work a reasonable amount of overtime.

          16.9.2  Overtime in the various job classifications shall be equally
                  divided among the employees of the respective job
                  classifications insofar as it is practical to do so. When an
                  employee is not available for overtime in his classification,
                  the Company will make every effort to use another qualified
                  employee in the same department before going to another
                  department. This will not prevent the Company from going
                  outside the department where the overtime is required to avoid
                  the payment of a rate whether penalty or premium of greater
                  than time and one-half (1.5). The practice of posting overtime
                  will be continued.

          16.9.3  After an employee is transferred or assigned to a
                  classification other than his own, he shall be eligible for
                  the same overtime within that classification as would the
                  employee he replaced.

          16.9.4  Employees who are called upon to work overtime shall not be
                  laid off during their regular work time for the purpose of
                  equalizing said overtime.

          16.9.5  The Company will pay overtime in fifteen (15) minute
                  increments during the first hour of overtime.

<PAGE>   25

16.10     OVERTIME LUNCH

          16.10.1 Any employee who has not been notified of his overtime
                  assignment at least twelve (12) hours prior to the
                  commencement of the overtime assignment and who works more
                  than ten (10) consecutive hours, shall be provided with a hot
                  lunch. The Company will allow the employee thirty (30) minutes
                  away from his/her job to eat his/her lunch. Subsequent lunches
                  and (30) minute lunch breaks will be provided every four (4)
                  consecutive hours worked beyond the ten (10) consecutive
                  hours.

          16.10.2 Any employee who is called out and works more than four (4)
                  consecutive hours shall be provided with a hot lunch which
                  shall be eaten at the end of said four (4) consecutive hours.
                  In addition, said employee shall be provided with a hot lunch
                  every four (4) consecutive hours worked thereafter.

                  There shall be no duplication of hot lunches under
                  provisions (1) and (2) above. The employee shall be given
                  reasonable time to eat his lunch without loss of pay.

16.11     EIGHT CONSECUTIVE HOURS OFF-DUTY

          16.11.1 In the event an employee does not receive eight (8)
                  consecutive hours off work within the fourteen (14)
                  consecutive hours immediately preceding the start of his next
                  scheduled shift, the Company shall exercise one of the
                  following options:

                  (A)  Instruct the employee to report late for his next
                       scheduled shift by the number of hours his longest
                       consecutive off-duty period falls below eight (8) hours
                       and pay the employee the appropriate straight time rate
                       for those hours not worked between the starting time of
                       his scheduled shift and the time he reports to work in
                       accordance with the Company's instructions. The
                       appropriate straight time rate on the workday Sunday
                       shall be one and one-half (1.5) and on a recognized
                       holiday, two and one-half (2.5).

                  (B)  Instruct the employee to report to work at the starting
                       time of his scheduled shift. The employee shall receive
                       a premium for those hours worked which, if added to his
                       longest consecutive off-duty period, equal eight (8)
                       hours. The premium shall be determined by multiplying
                       the classified hourly wage rate by one (1.O). The
                       premium shall be in addition to whatever compensation
                       the employee is otherwise entitled to receive under any
                       other section of this Article.

<PAGE>   26

16.12   TEMPORARY JOB VACANCIES

        16.12.1 The Company shall not be required to fill temporary job
                vacancies whether scheduled or unscheduled, unless the
                efficient operation of the plant requires that said
                temporary job vacancies be filled.

        16.12.2 When an employee is scheduled to work in a higher wage
                classification, she/he shall receive the higher rate of
                pay for a minimum of four (4) hours. If an employee has
                been scheduled to work in a higher wage classification,
                at any point in time in each week, within a six (6)
                consecutive weeks time period , the Company will meet
                with the Union to determine how to cover the higher wage
                classification beyond the six (6) consecutive weeks.

        16.12.3 The Company will post a list of all jobs that are to be
                filled the following week. In addition, for the sole
                purpose of facilitating the assignment of fill-ins for
                the following week, the Company will post on Monday, a
                list of the jobs that, to its knowledge, will be needed
                to be filled the following week. If an employee wishes to be
                considered for any fill-in for the following week he must notify
                the Company which job he desires on a form provided by the
                Company by 4:00 P.M. the Wednesday after the Monday posting or
                she/he will not be considered for the fill-in. This Monday
                posting does not replace the Thursday posting requirements nor
                is the Company liable for any penalties for failure to make such
                Monday posting. Laborers who wish to be considered for these
                assignments must follow the above procedures. If there are not
                enough employees signed up to meet the Company's requirements on
                this posting, the Company will assign the junior laborer who is
                broken in on that job (if it is a job that requires break-in
                time).

        16.12.4 The Company can assign laborers to fill temporary
                vacancies, scheduled or unscheduled, according to the
                seniority of the individual provided that he has the
                skill and ability to perform the required work. If only
                one (1) laborer is qualified, he must accept the assignment.
                Once laborer assignments have been completed, no laborer may be
                bumped out of his assigned job, for the week for which the
                assignment has been made, by another laborer.

        16.12.5 The Company will consider a request from a fixed shift
                employee to replace an employee on the day shift in his
                classification when the day shift employee is on vacation or
                extended illness in excess of one week provided however, that
                the laborer used to replace the offshift employee has been
                previously trained in that classification. The Company retains
                the right to decline these requests, but will not unreasonably
                withhold such permission.

<PAGE>   27

16.13     PLANT SHUTDOWNS

          During periods of plant shutdowns when employees are needed for
          maintenance, repairs, or work on plant alternations, the wage rate
          paid to employees who are retained for work during the first
          forty-five (45) days of a plant shutdown shall not be less than the
          employee's regular straight-time wage rate normally paid when the
          plant is producing. After forty-five days, the wage rate paid shall be
          the wage rate of the job performed.

16.14     The Company will not require an employee to clock out and then require
          him to clock back in for the sole purpose of avoiding penalties.

16.15     REST BREAK

          Any employee who does receive a paid lunch period shall be entitled to
          fifteen (15) minutes to eat lunch. Lunch breaks for all employees in
          this group shall be scheduled so that there is no interruption of
          operations. (The Company shall have the right to stagger lunch
          breaks.) Should the employee miss any part of or all of this 15 minute
          lunch break, there is no penalty. However, if said employee is
          regularly denied his lunch break, he may file a grievance in a timely
          manner.

ARTICLE XVII - SAFETY AND HEALTH

17.1      A joint Safety and Health Committee will be established consisting of
          members appointed by the Company and the Union. The "Committee" will
          consist of two (2) members from the Union and two (2) members from the
          Company plus the Plant Manager or designee. Meetings will be held
          regularly to address safety and health concerns and make
          recommendations to the plant management. The "Committee" will
          establish an Accident Investigation Team. The Accident Investigation
          Team will begin their investigation as soon as possible following an
          accident. Safety issues, complaints and/or disputes may be
          investigated by the "Committee". The Company will provide employees
          with required safety equipment. Employees will be required to properly
          use and maintain all personal protective equipment supplied by the
          Company.

17.2      The Company will furnish approved basic prescription ground safety
          glasses to active bargaining unit employees, including the cost of an
          annual eye exam. Prescription safety glasses will not be replaced
          unless the safety glasses were damaged or broken during the
          performance of duties.

17.3      The Company will annually reimburse active bargaining unit employees
          for the purchase of safety shoes. The total annual reimbursement for
          this safety equipment may not exceed $180.

<PAGE>   28

17.4      All time spent by a bargaining unit employee as a member of the
          committees in the Articles listed in this section, including all time
          spent during Federal and State inspections and pre and post close-out
          meetings, shall be compensated at the employee's regular straight time
          rate. Any time spent during the hours the employee is scheduled to
          work shall count toward the calculation of any penalty or premium pay
          section of this Agreement including, but not limited to, daily or
          weekly overtime.

17.5      Any employee who believes his job presents a hazard to his safety or
          health may request an immediate review of his job by the Joint Safety
          and Health Committee. No employee shall be disciplined or discharged
          for refusing to work on a job if his refusal is a bona fide claim that
          said job is not safe or might unduly endanger his health and safety.

17.6      In the event that an employee is required to clean silos under
          conditions that follow confined space entry procedures with proper
          training, the hours worked shall be compensated for by multiplying the
          classified hourly wage rate by one-half (0.5).

ARTICLE XVIII - BULLETIN BOARD

18.1      The Company agrees to allow the proper officers of the Union who are
          employees of the Wampum Plant of the Company to use one designated
          section of the plant bulletin board for posting notices in the
          interest of the Company and its employees.

ARTICLE XIX - MISCELLANEOUS

19.1      The Company will enter into a Union label agreement for the Company's
          package products.

19.2      Any hand tool that the employee uses in the performance of his job
          duties will be replaced in the event that the tool is rendered not
          usable during the course of the employee's work. The tool must be
          presented to the Company prior to replacement.

19.3      The normal time for distribution of pay checks to all employees shall
          begin with the start of the day shift every other Friday, except that
          Quarry employees and any employee starting the second shift will
          receive his pay check on the Thursday preceding the normal pay day.

19.4      Gloves will be made available for purchases to employees at cost on a
          cash basis.

19.5      When the Company decides that an interview between the Company and an
          employee regarding job qualification is to be conducted, a
          Committeeman chosen by the Company will attend the interview for the
          purpose of affirming that said interviews are conducted with a
          reasonable degree of uniformity.

<PAGE>   29

19.6      Printing of Agreement - The necessary Agreements will be printed at
          Company expense and each copy will bear the Union label. The Company
          will provide each local with a supply of the booklets.

ARTICLE XX - BENEFIT PLANS

20.1      During the term of this Agreement the Company will provide employees
          with participation in Southdown, Inc. Medical Network Plan, the
          Southdown, Inc. Group Dental Benefit Plan, the Southdown, Inc. Life
          Insurance and Accidental Death and Dismemberment Plan, the Southdown,
          Inc. Long Term Disability Plan, the Southdown, Inc. Pension Plan, the
          Southdown Inc. Retirement Savings Plan and Southdown, Inc. Voluntary
          Life Insurance Plan, including all amendments and modifications to
          said plans during the life of this Agreement, on the same basis as the
          benefits and eligibility requirements are provided to Southdown,
          Inc.'s salaried employees.

          20.1.1  The Wampum Hourly Pension Plan will be merged into the
                  Southdown, Inc. Pension Plan effective with the date of this
                  Agreement. Any employee retiring during the term of this
                  Agreement will have his pension benefit calculated under both
                  plan formulas and will receive the higher of the two amounts.
                  Employees will continue to accrue credited service at a flat
                  rate of $29.00 per year under the hourly plan through December
                  31, 2001 at which time the accrued benefit will be frozen. At
                  the time of retirement, should an employee have more than 30
                  years of credited service with the Company, the employee's
                  benefit under the hourly plan as of December 31, 2001, will be
                  unreduced for early retirement.

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

20.3      SICKNESS AND ACCIDENT BENEFITS

          If a permanent employee (non-probationary/non temporary) is absent
          from work due to disability, sickness and accident benefits are
          payable. The disability must prevent the employee from performing the
          duties of the job because of a non-occupational sickness or injury.

          After a waiting period of one (1) week (waived if the employee is
          hospitalized as an in-patient), the disability benefits are payable at
          a rate of forty-nine dollars ($49) per day for a maximum of five days
          per week. A disabled employee may receive weekly sickness and accident
          benefits during the period of disability not to exceed five (5)
          months. It is the employee's responsibility to make application for
          this benefit and the attending physician must document the nature of
          the disability and expected date of return to work. No benefits shall
          be payable for the following:

<PAGE>   30

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

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

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

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

          This benefit terminates upon retirement or upon termination of
          employment.

20.4      Health and Medical Plan Contribution Rates

          During the term of this agreement, employee contributions for Health
          and Medical Plans shall be as follows:

                      Employee Only                  $30/month
                      Employee and Children          $50/month
                      Employee and Spouse            $60/month
                      Employee and Family            $70/month

ARTICLE XXI - WORK PRACTICES

21.1      The Company will provide training for one laborer when manning
          requirements of the plant provide ample resources to man required
          operational jobs.

21.2      The following rules shall govern the training of laborers for the
          purpose of filling vacancies.

          21.2.1  Management will, one week in advance, announce and post the
                  job for which training will be provided.

          21.2.2  Laborers must notify the Company, starting with the senior
                  laborer, of their intent to accept the training in 21.1.1
                  above. If no one applies, the junior laborer may be required
                  to train.

          21.2.3  Management will determine the number of laborers who will be
                  trained for each classification.

          21.2.4  Management will determine the classifications for which
                  laborers will be trained for the purposes of filling
                  vacancies.

                  (a) Management will attempt to balance the number of jobs the
                      laborers are to be trained in.

<PAGE>   31

          21.2.5  The Company shall, before offering training in any job higher
                  than bracket nine (9), to a laborer hired after 10/1/77, give
                  the laborers hired prior to 10/1/77 the opportunity to train
                  for a job higher than bracket nine (9) subject to the
                  following conditions:

                  (a)  The opportunity must be offered in order of seniority.

                  (b)  The laborer shall have the choice of accepting or
                       rejecting the training.

          21.2.6  During the time when temporary summer laborers are working at
                  the plant, the following rules shall apply when training is
                  offered to the Labor Department for the purpose of filling
                  vacancies:

                  (a)  Permanent laborers must accept training for purposes of
                       filling vacancies. They shall be selected by canvassing
                       the labor crew in order of seniority. If no permanent
                       laborers voluntarily accept the training, the least
                       senior one is compelled to do so.

                  (b)  Temporary summer laborers can be used to fill vacancies
                       as long as all permanent laborers are already working in
                       that capacity.

          21.2.7  During the transition period before an additional packing crew
                  is put on or taken off, it is recognized that a reasonable
                  amount of overtime will be required. The Company will secure
                  as much information from sales as possible so that this
                  overtime can be held to a minimum and the addition of or
                  removal of a shift is consistent with a continuing increase or
                  decrease in package business.

          21.2.8  It is understood and agreed to by the Local Union No. 173 and
                  the Local Management at the Southdown Wampum Plant that the
                  amount of overtime that an employee has been charged is not a
                  factor that Management must consider when it is making a
                  choice as to who will be scheduled to work on a holiday or
                  premium hours other than overtime hours.

<PAGE>   32

                       (a)   This means that the equalization of overtime is not
                             a controlling factor over, and has no connection
                             with, which employee is asked to work hours that
                             are to be paid for at a premium rate. Contractual
                             distribution of overtime requirements will be
                             followed in all overtime cases.

              21.2.9   Production Utility shall be considered a classified
                       employee for overtime purposes on the day he fills each
                       classification. Once one of these classifications is
                       exhausted on any other day, than those where he fills in,
                       he would be eligible for overtime before going into the
                       department.

              21.2.10  If an employee's job requires a drivers license and he
                       loses said license, said employee shall return to the
                       laborer crew at labor rate with all rights and privileges
                       of a Laborer.

              21.2.11  The Company will maintain all Plant restrooms in a clean
                       and orderly condition. This work will be assigned to a
                       Mill Janitor and/or Laborer as required.

ARTICLE XXII - TERMS OF AGREEMENT

22.1      After ratification by the members of the Local Union, this Agreement
          shall become effective and remain in force and effect and be binding
          upon the parties hereto from August 29, 1999, to and including April
          30, 2002, and it shall continue to be in full force and effect
          thereafter from year to year until either party on or before March
          1st, of any year, beginning March 1, 2002, gives written notice to the
          other party of its desire or intention either to alter and modify or
          terminate the same. If such notice is given, the parties hereto shall
          begin negotiations not later than March 31st in such year.

<PAGE>   33

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

INTERNATIONAL BROTHERHOOD                   SOUTHDOWN, INC.
OF BOILERMAKERS, CEMENT, LIME
GYPSUM AND ALLIED WORKERS,
DIVISION LOCAL BADGE NO. D-173

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

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

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

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

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

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

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

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

<PAGE>   34

                                  APPENDIX "A"

                JOB CLASSIFICATIONS AND WAGE RATES - WAMPUM PLANT
<TABLE>
<CAPTION>

    BRACKET   JOB TITLE                        9-1-99     5-1-00     5-1-01
    -------   ---------------------------      ------     ------     ------
    <S>       <C>                              <C>        <C>        <C>
       1      Utility Janitor                   15.41      15.87      16.35
       2*     Laborer                           15.57      16.04      16.52
       3      ---                               15.74      16.21      16.70
       4      ---                               15.90      16.38      16.87
       5      Unloading Attendant               16.07      16.55      17.05
       6      ---                               16.23      16.72      17.22
       7      ---                               16.40      16.89      17.40
       8      Storekeeper                       16.56      17.06      17.57
     *10      Painting                          16.89      17.40      17.92
      11      Lubeman A                         17.06      17.57      18.10
              Maintenance
      12      Physical Chemist                  17.22      17.74      18.27
              Pack & Load

      13      Equipment Operator                17.39      17.91      18.45

      14      Mix Chemist                       17.55      18.08      18.62
              Truck Mechanic A
              Utility Chemist
              Repairman A
              Production Utility
              Quarry Mechanic A
              Quarry Specialist
              Process Control/Maintenance
      15      Rotating Repairman A              17.72      18.25      18.79

      16      Machinist A                       17.88      18.42      18.97
              Instrumentman A
              Electrician A
              Mechanic Leader
      17      ---                               18.05      18.59      19.14
      18      Electrical Leader                 18.21      18.76      19.32
              Instrument Leader
      19      Control Room Operator             18.54      19.10      19.67

</TABLE>

*(1) Painting - Rate purposes only (Bracket 1O)

 (2) The loader used to load stone into trucks at the quarry face will be
     placed in Bracket 15 for pay purposes only and without precedence for
     any other classification in the job evaluation program.

<PAGE>   35

* Laborer*
      Laborers hired after the date of ratification shall be paid in accordance
      with the following schedule:

<TABLE>
<CAPTION>
                                                     YEAR 1           YEAR 2      YEAR 3
                                                    -------          -------     -------
<S>                                           <C>                    <C>         <C>
New Hire Rate                                      $  9.94          $ 10.24     $ 10.54
I   61st day worked                                $ 10.45          $ 10.77     $ 11.09
II  6 months after D.O.H.                          $ 10.97          $ 11.30     $ 11.64
III 1 year after D.O.H                             $ 12.18          $ 12.55     $ 12.93
IV  2 years after D.O.H                       Current Labor Rate
</TABLE>

<PAGE>   36

                                 APPENDIX A (1)

                                 SENIORITY LIST
                              WAMPUM AS OF 09/01/99
<TABLE>
<CAPTION>
     NAME                        DATE HIRED
     ----                        ----------
<S>                              <C>
ALTMAN, ROBERT J.                  02/29/56
MILLER, ROBERT E.                  05/27/63
EVERSOLE, ROBERT S.                06/11/65
DAVIS, JEFFREY                     04/16/66
KOSIOR, CHARLES M.                 05/10/66
STELTER, RICHARD L.                05/01/67
GENERAO, JOHN R.                   08/30/67
LESLIE, CLARENCE T.                04/17/68
FERRUCCI, FRANK M.                 04/29/68
DRUSCHEL, ROBERT L.                05/21/68
FRANUS, THOMAS                     05/27/68
MCDONALD, GLENN E.                 06/17/68
BUTERA, JAMES S.                   03/10/69
LOUGHHEAD, JOHN W.                 03/17/69
OLAYER, JOSEPH A.                  05/01/69
KOSIOR, THEODORE S.                05/12/69
RADICH, RAYMOND R.                 05/19/69
ARGIRO, DAVID P.                   07/21/69
HOUSEHOLDER, HAROLD                03/30/70
CORY, JOHN L. JR.                  04/13/71
REID, GERALD W.                    04/13/71
PAVKOVICH, GEORGE A.               04/15/71
SCHOTSCH, DAVID L.                 04/15/71
CILETTI, JOSEPH L.                 04/16/71
CWYNAR, RAYMOND L.                 04/16/71
VALENTINO, RUDOLPH JR.             04/16/71
CHANDLER. RUBIN                    04/19/71
COOKE, DONALD                      04/19/71
HAIRHOGER, CHARLES L.              04/19/71
JOHNSON, ERNEST F.                 04/19/71
WRONA, WALTER J.                   04/19/71
BAKER, THOMAS O.                   05/05/71
ISABELLA, JOSEPH B.                05/17/71
</TABLE>

<TABLE>
<CAPTION>
     NAME                        DATE HIRED
     ----                        ----------
<S>                              <C>
FLUMER, DANIEL                     06/07/71
KRAVOS, JOHN III                   06/07/71
SENATORE, VERNON J.                08/23/71
DURBIN, FRANCIS B.                 08/30/71
BORST, RICHARD P.                  10/12/71
GUY, DAVID J.                      10/13/71
MOORE, OVAL E.                     09/18/72
PRESNAR, JOHN                      09/25/72
BLACKWELL, ALVA C.                 11/13/72
BABICK, STANLEY JR.                07/30/73
KINARD, PAUL W.                    07/30/73
CURRY, FREDRICK                    08/06/73
</TABLE>
<PAGE>   37
<TABLE>
<S>                              <C>
HALL, JAMES D.                     09/17/73
YOHO, PHILLIP A.                   09/17/73
PROCOPIO, SAMUEL A.                09/24/73
SMIALOWSKI, JOHN JR.               09/24/73
DAVIS, ROBERT J.                   10/01/73
BABEL, GEORGE J.                   04/29/74
BARBER, EUGENE I.                  04/29/74
HUNTER, THEODORE E.                04/29/74
IPPOLITO, JOHN                     04/29/74
RUSSO, DOMINICK                    09/16/74
MICKLISH, SHEILA                   10/11/77
ALLEN, JUDY                        03/20/78
RUTTER, GARY                       03/20/78
BOBER, RICHARD                     03/27/78
NIEMI, RON                         03/27/78
BATES DON                          04/03/78
SHOUP, KARL                        04/17/78
PEZZI, SAMUEL                      05/22/78
CRANS, GREGORY                     08/21/78
PATTERSON, RANDY                   08/23/78
LEONHARDT, ROBERT                  08/28/78
OSBORNE, DONALD                    08/28/78
SCHLEMMER, DONALD                  08/28/78
TUROK, CHARLES                     08/28/78
MALLARY, GEORGE JR.                09/18/78
DIFRISCHIA, JOSEPH                 09/L9/78
LUTZ, WILLIAM JR.                  09/20/78
ALLISON, DENISE                    03/12/79
BEKOSKI, FRANK                     09/24/79
HERB, THOMAS                       09/24/79
KRIEGISCH, RANDY                   09/24/79
PALAGALLO, JAMES                   09/24/79
HACKETT, JAMES                     10/01/79
HACKETT, RANDY                     10/01/79
HASWELL, LARRY                     10/01/79
HIMES, DAVID                       10/01/79
HOUK, WILLARD                      10/01/79
HALULKO, MIKE                      10/09/79
</TABLE>

<TABLE>
<CAPTION>
     NAME                        DATE HIRED
     ----                        ----------
<S>                              <C>
BELLISSIMO, BRUCE                  12/17/79
HAIRHOGER, EUGENE                  12/17/79
KINARD, PAUL W.                    12/17/79
KROLL, PATTY                       12/17/79
WILLIAMSON, RICK                   12/17/79
CHAPPELL, BRUCE                    01/02/80
MARTIN, WILLIAM                    01/02/80
POLAND, ROBERT L.                  09/03/85
BENNETT, ROBERT                    06/02/86
HERMAN, LARRY                      06/02/86
KING, RANDY                        06/02/86
KIRKWOOD, GARY                     06/02/86
KRUEGER, WILLIAM, J.               06/02/86
</TABLE>
<PAGE>   38
<TABLE>
<S>                                <C>
MARICH, STEVE                      06/02/86
MOORE, DAN                         06/02/86
STELTER, RANDY                     06/02/86
FERRUCCI, FRANK JR.                06/18/87
ALLEN, JOHN D.                     06/08/87
BARGER, RODNEY                     06/08/87
RADER, WILLIAM JR.                 06/08/87
STELTER, FREDERICK                 06/08/87
COLUNDRELLO, SALVATORE JR.         08/12/87
GRYMES, RONALD A.                  08/12/87
LUTZ, BRYAN D.                     08/12/87
DUDA, MARK S.                      03/13/88
CRACRAFT, EDWIN L.                 06/13/88
SKLENCHAR, EDWARD J.               06/13/88
DOUTT, RICHARD J.                  10/02/89
ROONEY, PATRICIA A.                10/02/89
STRICKLER, RICHARD C.              10/02/89
CAPALBO, JAMES M.                  04/22/91
DAVIS, MATTHEW D.                  04/22/9L
MCDONALD, RAYMOND G.               04/22/9L
MILLER, DOUGLAS E.                 04/22/91
CHAPPELL, THOMAS M.                09/21/92
HUBER, REX C.                      09/21/92
KRUEGER, ROBERT E.                 09/21/92
SCHLEMMER, TIMOTHY J.              09/21/92
STRICKLER, DANIEL W.               09/21/92
BRIGHT, JAMES CL.                  09/28/92
SYSMOSKO, KIRK                     01/04/93
ALLEN, DARL J.                     05/10/93
CAMINITI, JAMES                    05/10/93
GRYMES, RODNEY                     05/10/93
HARPER, DONALD L.                  09/27/93
HERB, ROBERT E.                    09/27/93
MICCO, ANTHONY                     09/27/93
GIBBONS, MICHAEL K.                10/04/93
WELSH, MARK W.                     10/04/93
TAYLOR, DEBORAH                    08/25/97
</TABLE>

<PAGE>   39

                                   APPENDIX B

                             1999 WAMPUM NEGOTIATION

In conjunction with the 1999 Wampum Plant negotiations, the parties agreed to
delete Appendix B, pages 54 through 57, of the Labor Agreement. The Company and
Union agree that the work schedules in Appendix B are the work schedules
currently in effect at the Wampum Plant. Further, the parties agree that he
Company may change these schedules or establish new schedules consistent with
the Labor Agreement. These pages will be filed for future reference.

Further, the parties agree to remove all appendixes, attachments and letters
contained in pages 58 through 91 of the existing Labor Agreement and file them
for reference purposes.<PAGE>

                                                                   Exhibit 10.22

                                AMENDMENT TO THE
                             DEAN WITTER START PLAN
                             ----------------------

     WHEREAS, Dean Witter Reynolds Inc. ("DWR"), a Delaware corporation,
maintains the Dean Witter START Plan (the "START Plan");

     WHEREAS, DWR desires that the START Plan be amended as set forth herein;

     NOW, THEREFORE, the START Plan is hereby amended as follows:

1.     Effective January 1, 2000, Section 11(c) of the START Plan shall be
   amended by adding two new sentences immediately following the third sentence
   thereof to read as follows:

     "Effective January 1, 2000, if a Participant whose vested Accounts exceed
     the amount described in Section 411(a)(11) of the Code on the date the
     distribution commences does not consent to the distribution of the
     Participant's Plan Benefit under Section 11(b), then payment of the
     Participant's Plan Benefit shall, subject to Section 13(a), be deferred to
     such date as the Participant shall elect.  Notwithstanding the foregoing,
     effective January 1, 2000, if the Participant's vested Accounts do not
     exceed $5,000 as of January 1 (or such other date(s) as the Plan
     Administrator shall designate from time to time), then the deferral of the
     Participant's Plan Benefit shall end, and distribution of the Participant's
     Plan Benefit shall be made approximately 90 days thereafter, provided,
     however, that at the time of distribution the Participant's vested Accounts
     do not, in fact, exceed $5,000."

2.       Effective January 1, 1999, Morgan Stanley International Incorporated
   ("MSII") shall be a Participating Company, as defined in the START Plan, with
   respect to MSII employees primarily servicing business units or cost centers
   of otherwise Participating Companies;

3.       Effective as of January 1, 1999, the first sentence of Section
   4(b)(i)(3) of the START Plan is hereby amended by inserting the words ",
   determined with regard to the Participant's Earnings while an Eligible
   Employee" within the parenthetical and immediately following the words "up to
   6% of Earnings."
<PAGE>

4.       Effective July 1, 1999, the fifth sentence of Section 6(d) of the START
   Plan is amended by adding the words ", is fully (100%) vested" after the
   words "who has attained age 55" and after the words "who has attained age
   60."

       IN WITNESS WHEREOF, the undersigned had hereunder set his hand as of the
22nd day of December, 1999.

                                    DEAN WITTER REYNOLDS INC.

                                    By: /s/ Michael T Cunningham
                                        ------------------------
<PAGE>

                                                                   Exhibit 10.22

                                AMENDMENT TO THE
                             DEAN WITTER START PLAN
                             ----------------------

          WHEREAS, pursuant to a Stock Purchase Agreement between SPS
Transaction Services, Inc. ("SPS") and Associates First Capital Corporation
("Associates"), SPS has sold substantially all of its assets to Associates and
all of the common stock of SPS held by the Dean Witter START Plan (Saving Today
Affords Retirement Tomorrow) (the "Plan") has been converted into cash; and

          WHEREAS, the Compensation Committee of Dean Witter Reynolds Inc. (the
"Company") has determined that, as a result of the closing of the transaction
between SPS and Associates, it is necessary and appropriate to amend the Plan as
hereinafter set forth and has authorized an officer of the Company to execute
this amendment.

          NOW, THEREFORE, BE IT RESOLVED:

          1.  Section 3(f) of the Plan is amended in its entirety to read as
follows:

          Transferred Employees.  If a Participant transfers employment to SPS
          ---------------------
     Transaction Services, Inc. (or any of its subsidiaries) ("SPS") before
     October 15, 1998 or Nations-Securities, A Dean Witter/Nations Bank Company
     ("Nations"), such transferred Participant's Period of Service shall include
     service with SPS before October 15, 1998 or Nations but not more than the
     lesser of such transferred Participant's service with SPS before October
     15, 1998 or Nations or the service necessary for such transferred
     Participant to fully vest in the Matching Contribution Account, such post-
     transfer service to be determined in accordance with this Section 3.

          2.  Section 3(g) of the Plan is amended in its entirety to read as
follows:

          Service with SPS.  In the case of any individual who was an employee
          ----------------
     of SPS and who either transferred employment to a member of the Affiliated
     Group before October 15, 1998 or severed employment with SPS before October
     15, 1998 and is hired as an Employee by a member of the Affiliated Group
     within 12 months of such severance, such Employee's Service used to
     determine a Year of Service under this Section 3 shall include service with
     SPS before October 15, 1998 determined by applying the rules set forth in
     this Section 3 to such Employee's
<PAGE>

     employment by SPS as if such employment was employment by a member of the
     Affiliated Group.

          3.  Section 6(c) of the Plan is amended by inserting the following new
sentence at the end thereof:

     Notwithstanding any provision of the Plan to the contrary, a Participant
     shall not be permitted to make a Fund Balance Transfer into the SPS Stock
     Fund on or after October 15, 1998.

          4.  Section 7(b) of the Plan is amended by inserting the following new
sentence at the end thereof:

     Notwithstanding any provision of the Plan to the contrary, any amounts that
     are attributable to employer contributions and that are held in the SPS
     Stock Fund on October 15, 1998 shall be transferred to the Morgan Stanley
     Dean Witter Stock Fund as soon as practicable after such date.

          5.  Section 7(c)(v) of the Plan is amended by inserting the following
new sentence at the end thereof:

     Notwithstanding any provision of the Plan to the contrary, as soon as
     practicable after the SPS Stock Conversion Date, the assets of the SPS
     Stock Fund (other than those attributable to employer contributions) shall
     be invested in a U.S. Government money market Investment Fund available
     under the Plan or in such other similar Investment Fund as the Trustee
     deems suitable, and thereafter the SPS Stock Fund shall terminate and cease
     to be an Investment Fund under the Plan.

          6.  Section 9(a) of the Plan is amended by inserting the following new
sentence at the end thereof:

     Notwithstanding any provision of the Plan to the contrary, an Employee
     shall not be permitted to make such a contribution on or after October 15,
     1998 in the form of Stock received from a plan maintained by SPS or a note
     evidencing a participant loan under the SPS Transaction Services, Inc.
     START Plan.

          7.  The first sentence of Section 12(h)(ix) of the Plan is amended by
inserting the phrase "before October 15, 1998" at the end thereof.
<PAGE>

          8.  The first sentence of Section 12(h)(x) of the Plan is amended by
inserting the phrase "before October 15, 1998" at the end thereof.

          9.  Section 21 of the Plan is amended by inserting the following new
definition immediately after the definition of "SPS Stock":

          "SPS Stock Conversion Date" means the date upon which SPS Stock is
           -------------------------
     converted into cash in accordance with the Stock Purchase Agreement between
     SPS and Associates First Capital Corporation.

          10.  The Plan is further amended by inserting the following new
Supplement E immediately after Supplement D:

                                  SUPPLEMENT E

                                  SALE OF SPS

          Pursuant to a Stock Purchase Agreement between SPS and Associates
     First Capital Corporation ("Associates"), SPS has sold substantially all of
     the stock of its subsidiaries to Associates, and all of the SPS Stock held
     by the Plan was converted into cash.  Accordingly, except where the context
     clearly requires otherwise, all of the references in the Plan to SPS, the
     SPS START Plan, SPS Stock and the SPS Stock Fund shall be deemed to be
     deleted effective as of the SPS Stock Conversion Date.  Following such sale
     there were no employees of SPS, the SPS START Plan was transferred to
     Associates, and the SPS Stock Fund was terminated.

          11.  The foregoing amendments to the Plan shall be effective as of
October 15, 1998.

       IN WITNESS WHEREOF, the undersigned had hereunder set his hand as of the
22nd day of December, 1999.

                                    DEAN WITTER REYNOLDS INC.

                                    By: /s/ Michael T Cunningham
                                       -------------------------

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