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                                                                   EXHIBIT 10.16


                                   1995 - 2000




                              BASIC LABOR AGREEMENT


                                       AND


                         SENIORITY RULES AND REGULATIONS



                                     between



                                  SIMCALA, INC.


                                       and


                         UNITED STEELWORKERS OF AMERICA

                                    (AFL-CIO)




                                 August 8, 1995



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                                    1995-2000

                              LABOR AGREEMENT INDEX




ARTICLE                                  SUBJECT                                                        PAGE
                                                                                                  
     PREAMBLE........................................................................................    1

I    RECOGNITION.....................................................................................    1
II   PURPOSE AND SCOPE...............................................................................    1
         2.1  Purpose................................................................................    1
         2.2  Employees Defined......................................................................    1
         2.3  Unit Change............................................................................    1
         2.4  Excluded Personnel.....................................................................    1
         2.5  Contracting Work.......................................................................    2
III
     CHECKOFF........................................................................................    2
         3.1  Monthly Reports........................................................................    2
         3.2  Initiation Fees and Dues...............................................................    2
         3.3  Remittance.............................................................................    2
         3.4  Preference.............................................................................    2
         3.5  Indemnity Clause.......................................................................    2
         3.6  Report to Union........................................................................    2
         3.7  Dues Exemption.........................................................................    2
IV   MANAGEMENT......................................................................................    3
V    STRIKES AND LOCKOUTS............................................................................    3
VI   RATES OF PAY....................................................................................    3
         6.1  The Standard Hourly Wage Scale.........................................................    3
         6.2  New or Changed Job.....................................................................    3
         6.3  Inequity Grievances Prohibited.........................................................    4
         6.4  Shift Premium..........................................................................    4
         6.5  Sunday Premium Pay.....................................................................    5
         6.6  Funeral Pay............................................................................    5
VII  HOURS OF WORK...................................................................................    5
         7.1  Definitions............................................................................    5
         7.2  Normal Hours...........................................................................    6
         7.3  Scheduling.............................................................................    6
         7.4  Allowance for Jury Service.............................................................    7
         7.5  Overtime Hours and Pay.................................................................    7
         7.6  Attendance and Absenteeism.............................................................    8
VIII VACATIONS.......................................................................................   10
         8.1  Intent.................................................................................   10
         8.2  Qualifying Services....................................................................   10



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         8.3  Eligibility Requirements for Vacation with Pay.........................................   11
         8.4  Allowance..............................................................................   12
         8.5  Pay....................................................................................   12
         8.6  Forfeit................................................................................   13
IX   HOLIDAYS........................................................................................   13
         9.1  Production Optional With Company.......................................................   13
         9.2  Holidays...............................................................................   13
         9.3  Employees Not Working..................................................................   13
         9.4  Employees Scheduled....................................................................   14
         9.5  Holiday Pay............................................................................   14
         9.6  Maximum Pay............................................................................   14
X    INJURY PAY......................................................................................   14
         10.1   Allowed Time for Injury..............................................................   14
XI   ADJUSTMENT OF GRIEVANCES........................................................................   15
         11.1   Step 1...............................................................................   15
         Step 2......................................................................................   15
         Step 3......................................................................................   16
         Step 4......................................................................................   16
         11.2   Statement of Facts...................................................................   17
         11.3   Rules of Appeal and Answer...........................................................   17
         11.4   Witnesses............................................................................   18
         11.5   Grievance Committee..................................................................   18
         11.6   List of Union Representatives........................................................   18
XII  SUSPENSION AND DISCHARGE........................................................................   18
         12.1   Procedure............................................................................   18
         12.2   Reinstatement Pay....................................................................   19
XIII SAFETY..........................................................................................   20
         13.1   Company Provisions...................................................................   20
         13.2   Joint Safety Committee...............................................................   20
         13.3   Safety Rules.........................................................................   20
         13.4   Unsafe Conditions-Practices..........................................................   20
         13.5   Life Endangered......................................................................   20
         13.6   Annual Physical......................................................................   21
XIV  LEAVE OF ABSENCE................................................................................   21
         14.1   Personal, Medical or Family Leave....................................................   21
         14.2   Union Absence........................................................................   21
         14.3   Military.............................................................................   21
         14.4   Personal Leave.......................................................................   22
XV   SENIORITY.......................................................................................   22
         15.1   Acquisition of Seniority.............................................................   22
         15.2   Excluded Personnel...................................................................   22
         15.3   Loss of Seniority....................................................................   23
         15.4   Seniority Factors....................................................................   24




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         15.5   Seniority Units......................................................................   25
         15.6   Permanent Vacancies..................................................................   25
         15.7   Filling Temporary Vacancies..........................................................   27
         15.8   Promotions, Reductions in Forces.....................................................   28
         15.9   Transfers and Retaining Seniority Rights.............................................   29
         15.10  Temporary Transfer at Management's Direction.........................................   29
         15.11  Loss of Work Arising from Work Stoppages or Strikes..................................   30
         15.12  Manning New Facilities...............................................................   30
XVI   TERMINATION....................................................................................   30
XVII  TRAINING.......................................................................................   30
XVIII ENTIRE AGREEMENT...............................................................................   32
         SCHEDULE 'A' -- Standard Hourly Wage Scale..................................................   34
         Simcala Inc. 401-K Plan.....................................................................   35
         Simcala Inc. Profit-Sharing Agreement.......................................................   36
         Local Agreements............................................................................   39
         Exhibit 'A' -- Line of Progression..........................................................   40




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                                    AGREEMENT

This Basic Agreement dated as of August 5, 1995 is between SIMCALA, INC. or its
successors and assigns (hereinafter referred to as the "Company") and the UNITED
STEELWORKERS OF AMERICA, AFL/CIO or its successors and assigns (hereinafter
referred to as the "Union") on behalf of its members employed by the Company at
its Montgomery, Alabama Plant.

                             ARTICLE 1 - RECOGNITION

1.1      In accordance with and subject to the provisions of the Labor
         Management Relations Act, 1947, as amended, the Company recognizes the
         Union as the sole exclusive bargaining agency of the production and
         maintenance employees of the Company at the above-named plant of the
         Company for the purpose of collective bargaining in respect to rates of
         pay, hours of work, and conditions of employment.

1.2      The Union agrees to keep the Company advised at all times of the names
         of its duly elected officers and committeemen with whom the Company
         will deal to carry out the provisions of this Agreement.

                          ARTICLE 2 - PURPOSE AND SCOPE

2.1      Purpose - It is the intent and purpose of the parties hereto that this
         Agreement will set forth herein the basic understanding covering rates
         of pay, hours of work, and conditions of employment to be observed by
         the parties hereto so as to maintain uninterrupted operations in the
         plant and to achieve the highest level of employee performance and
         efficiency through ongoing training and consistent with safety, good
         health, and sustained effort.

2.2      Employees Defined - Whenever the terms "employee" or "employees" are
         used in this Basic Agreement, they shall be regarded as including all
         employees of the plant named above, and shall not include office
         clerical employees, professional employees, guards, foremen, or any
         supervisory positions, salaried employees, lab technicians and
         analysts, chemists, research employees, and certain other technical
         employees.

2.3      Unit Change - Any change in the bargaining unit shall be by mutual
         agreement.

2.4      Excluded Personnel

         A.       Supervisors are not within the definition of "employee," but
                  may perform bargaining unit work from time-to-time, however,

         B.       A grievance if granted under this section will provide four
                  (4) pay to an employee or employees off injured or sick as
                  designated by the Grievance Committee and Plant Manager.


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2.5      Contracting Work

         A.       Contracting out of work will not be done to replace or
                  displace a bargaining unit employee.

         B.       The Company agrees to notify the Union of its intent to
                  contract out work.

                              ARTICLE 3 - CHECKOFF

3.1      Monthly Reports - On or before the fifteenth day of each calendar month
         the Company shall submit to the Union a list showing the name, address
         and employee number of each new employee hired during the preceding
         month.

3.2      Initiation Fees and Dues - The Company agrees to deduct from each
         employee's first pay of the succeeding calendar month next following
         the receipt of a voluntary union dues checkoff authorization card
         executed by that employee, the monthly union dues for the preceding
         month and shall also deduct any assessments against the employee which
         are general and uniform among all employees who at the time are members
         of the union, and also if owed an initiation fee in the amount
         designated by the union.

3.3      Remittance - The Company shall promptly remit any and all amounts so
         deducted as a result of receipt of aforesaid assignments to the
         International Treasurer, United Steelworkers of America, 6200 E.J.
         Oliver Blvd., Suite 44, Fairfield, AL 35064, or to wherever designated
         by the Treasurer.

3.4      Preference - It is understood and agreed that deductions for Old Age
         Benefits, Withholding Tax, Insurance, Company Property, and Court
         Assignments shall have preference over the aforesaid deductions.

3.5      Indemnity Clause - In consideration of the Company's deducting dues
         under the foregoing arrangement, the Union agrees that it shall
         indemnify and hold the Company harmless against any and all claims,
         demands, civil suits or other forms of liability that may arise out of
         or by reason of any action taken or not taken by the Company for the
         purposes of complying with any of the provisions of this Article 3 or
         any information furnished to the Company by the Union or any of its
         duly authorized representatives.

3.6      Report to Union - A list of employees names from whom dues, initiation
         fees and assessments have been deducted shall be furnished to the
         Financial Secretary of the Local Union each month. Included in the list
         of names of employees from whom dues were deducted shall be the names
         of those from whom it was impossible to deduct dues and a statement of
         the reason.

3.7      Dues Exemption - The constitution of the Union provides that members
         who have not received forty (40) hours pay in any one month, through no
         fault of their own, shall be exonerated from the payment of dues. It is
         agreed that in cases where employees do not



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         have earnings in the pay period from which dues are customarily
         deducted, but did have forty (40) hours pay or more in the month, the
         Company will deduct the dues for the particular month from the next pay
         period in which the employee has earnings. It is understood that the
         above exemption does not apply when the time lost is due to earned
         vacation. The provisions of this paragraph will be changed only as a
         result of official notice from the International Treasurer of the
         Union.

                             ARTICLE 4 - MANAGEMENT

4.1      Subject to the provisions of the Agreement, the Union recognizes that
         the Management of the works and the direction of the working forces
         including, but not limited to, introduction of new technologies,
         equipment and processes, the assigning of work schedules and job
         duties, and transfer, the right to hire, suspend, or discharge for
         proper cause including lack of qualification or inability to achieve
         minimum levels of competence during the initial probationary period of
         employment, and thereafter, and proper attendance, and successful
         completion of training programs, and the right to relieve employees
         from duty because of lack of work or for other legitimate reasons, is
         vested exclusively in the Company.

                        ARTICLE 5 - STRIKES AND LOCKOUTS

5.1      There shall be no lockouts on the part of the Company, no suspension of
         work on the part of the employees. It is agreed between the parties
         hereto that the procedure provided in the Agreement is adequate, if
         followed in good faith by both parties, for a fair and expeditious
         settlement of grievances arising between the parties. It is further
         agreed that if this procedure is not followed or is disregarded and a
         strike occurs, all members who are proven to have advocated,
         instigated, or caused such strike, in violation of this Agreement shall
         be subject to disciplinary action. The Union officers and committeemen
         shall work with Company representatives to first, prevent any violation
         of this Agreement and second, to immediately correct any violation.

                            ARTICLE 6 - RATES OF PAY

6.1      THE STANDARD HOURLY WAGE SCALE

         It is understood and agreed that the Standard Hourly Wage Scale as
shown in Schedule A, attached hereto and made a part of this Agreement, shall be
the rates of pay, except as changed under the terms of this Agreement.

6.2      DESCRIPTION AND CLASSIFICATION OF NEW OR CHANGED JOB

6.2.1    To establish a description and classification for a new job at some
         subsequent date, the Company shall within sixty (60) operating days of
         the installation of the new job, describe said new job in accordance
         with the Current Manual and shall submit two copies of such description
         to the Union; the sixty (60) days may be extended by written agreement.


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6.2.2    After the Company and the Union have agreed upon and signed the job
         description, the Company shall classify such job and shall submit two
         copies of such classification to the Union.

6.2.3    If Management and the Union are unable to agree upon the description
         and/or classification, Management shall install the proposed
         description and/or classification and the employee or employees
         affected may, within thirty (30) days after such disagreement, file a
         grievance alleging that the job description and/or classification is
         improper under the procedure established in the Procedural Agreement.
         Such grievance shall be processed under the Grievance Procedure of the
         Basic Agreement, beginning at the second step.

6.2.4    An existing job shall not be reclassified unless accumulative changes
         occurring shall alter the requirements of such job. Introduction of new
         technologies or processes will not be grounds for reclassification.

6.2.5    Jobs will not be combined without mutual agreement of the parties.

6.3      The Company and the Union agree that "inequity" grievances over
         relative rates of pay among the various job classifications are
         prohibited.

6.3.1    No basis shall exist for an employee to allege that a wage rate
         inequity exists and no grievance on behalf of an employee alleging a
         wage rate inequity shall be filed or processed during the term of the
         Agreement.

6.4      SHIFT PREMIUM

6.4.1    Effective for the term of this Agreement, shift premiums shall be paid
         as follows:

         A.       For hours worked which would fall in the prevailing night
                  shift, which includes all shifts regularly scheduled to
                  commence between 10:00 p.m. and 12:00 midnight, there shall be
                  paid a shift premium of thirty (30) cents per hour.

         B.       For hours worked which would fall in the prevailing day shift,
                  which includes all shifts regularly scheduled to commence
                  between 6:00 a.m. and 8:00 a.m., no shift premium will be
                  paid.

         C.       For hours worked which would fall in the prevailing afternoon
                  shift, which includes all shifts regularly scheduled to
                  commence between 2:00 p.m. and 4:00 p.m., there shall be paid
                  a shift premium rate of twenty (20) cents per hour.

         D.       For shifts commencing at times other than covered in A, B, and
                  C above, the afternoon shift premium will be paid for all
                  hours worked between 4:00 p.m. and midnight and the night
                  shift premium will be paid for all hours worked between
                  midnight and 8:00 a.m.


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6.4.2    Shift premiums shall be included in the calculation of overtime
         compensation.

6.4.3    Shift premiums shall be paid for allowed time or reporting time when
         the hours for which payment is made would have called for a premium, if
         worked.

6.5      SUNDAY PREMIUM PAY

6.5.1    For all time worked on Sunday, which is not paid for on an overtime
         basis, a premium on the regular rate for the job as defined in the
         Standard Hourly Wage Scale as shown in Schedule A, attached to and made
         a part of this Agreement, shall be paid as follows:

                            TWENTY-FIVE (25) PERCENT

6.5.2    For the purpose of this provision, Sunday will be deemed to be the
         twenty four (24) hours beginning with the turn change time nearest to
         12:01 a.m. Sunday.

6.6      FUNERAL PAY

6.6.1    Any employee losing work because of the death of the employee's father,
         mother, brother, sister, father-in-law, mother-in-law, husband, wife,
         child, grandfather, grandmother, grandchild or step parents and step
         children (when they have lived with the employee in an immediate family
         relationship) shall be entitled to maximum of three (3) days' pay, or
         the day of the funeral in the event of the death of the employee's
         immediate brother-in-law or sister-in-law or son-in-law or
         daughter-in-law, if the employee was scheduled to work on any of those
         days.

6.6.2    In the event of the death of a spouse or child during the employee's
         vacation, three (3) days of the vacation will be rescheduled at a later
         date, four (4) days if the funeral is over 100 miles away.

6.6.3    The above days shall not extend beyond the date of the funeral and will
         require attendance at the funeral, except, that one of the four days
         may be applied to the first day after the funeral, if the funeral is
         held at a distance of 100 miles or more from the employee's home, and
         such day is required for travel.

6.6.4    Proof of relationship, such as an obituary notice, must be attached to
         the claim for pay. The rate of such "Funeral Pay" shall be the standard
         hourly wage rate shown in Schedule A, attached hereto, for the job said
         employee worked on his last day of actual work and shall not include
         any premium pay for whatever cause.

                           ARTICLE 7 -- HOURS OF WORK

7.1      DEFINITIONS


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7.1.1    A day is the twenty-four (24) hour period from the time an employee
         commences work.

7.1.2    A week is a calendar week.

7.2      NORMAL HOURS

7.2.1    The normal hours as shown below shall not be construed as a guarantee
         of hours of work per day or per week, or for days of work per week.

7.2.2    The normal hours per day shall be eight (8) hours of work and sixteen
         (16) consecutive hours of rest.

         A.       The employee shall not have an established lunch period, shall
                  eat at the convenience of the operation, but shall not be
                  required to eat sooner than three (3) hours nor later than
                  five (5) hours after he commences work, and shall not take
                  time to exceed a total of thirty (30) minutes during any work
                  shift.

         B.       It shall not be considered normal hours and the overtime
                  provisions of Section 7.6 shall not apply when either a local
                  ordinance or State or Federal legislation changes the time and
                  such action forces a short return.

7.2.3    The normal hours per week shall be forty (40) hours of work consisting
         of five (5) work days and two (2) scheduled rest days.

7.2.4    All hours worked beyond the normal hours as set forth in this Section
         shall be paid at the overtime rate, as provided in Section 7.5 below.

7.2.5    Where possible, employees will be scheduled to work so they will work
         five (5) consecutive days in a week and have two (2) consecutive
         scheduled rest days per week.

7.3      SCHEDULING

7.3.1    Determination of the daily and weekly work schedules shall be made by
         the Company and such schedules may be changed by the Company from time
         to time to suit varying conditions of the business or conditions beyond
         the Company's control; provided, however, that the plant work week
         shall not be reduced below forty (40) hours without mutual agreement.
         The Company further agrees that it will return to a forty (40) hour
         week before hiring any additional employees.

7.3.2    An employee shall not be laid off a day to make up for working his
         scheduled day off in order to avoid payment of sixth or seventh day
         overtime.

7.3.3    Schedules of the employees' regular workdays whenever possible shall be
         posted or otherwise made known to employees by 3:00 P.M. CST Friday.



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7.4      ALLOWANCE FOR JURY SERVICE

7.4.1    An employee who is called for jury service shall be excused from work
         for the days on which he serves and shall receive for each day of
         service on which he otherwise would have worked his normal wages and
         benefits.

7.4.2    The employee will be required to present proof of service.

7.4.3    This allowance shall not apply in the case of a witness when he is
         being paid for such service as a deputy or peace officer.

7.5      OVERTIME HOURS AND PAY

7.5.1    It is understood and agreed that some overtime is expected. Therefore,
         it shall be at Management's discretion to assign overtime work,
         provided:

         No employee shall work more than sixteen (16) consecutive hours from
         the time he commences work nor return to work within 8 hours after
         working 16 consecutive hours nor more than twenty-four (24) overtime
         hours within one calendar week unless extended by mutual agreement
         between the affected employee and the Company.

7.5.2    When management determines that overtime is necessary, the following
         procedure will be used:

         Offer overtime to personnel on the shift present, in the classification
         where the vacancy exists first, in seniority order unless the line of
         progression is fully utilized.

                  1.       Offer overtime to personnel on the shift present, in
                           the classification where the vacancy exists first, in
                           seniority order.

                  2.       If no one accepts, offer the overtime to the
                           personnel in the same classification from the
                           on-coming crew in seniority order.

                  3.       Call all other personnel scheduled in the
                           classification in seniority order.

                  4.       If no one accepts, go directly to the qualified
                           voluntary overtime list for that classification.
                           These lists will be changed quarterly.

                  5.       If no one volunteers from that list, employees at
                           work will be forced to work.

         A.       Should problems arise in the administration of this procedure,
                  the parties agree to discuss them at that time.

         B.       Grievances that arise from the administration of this
                  procedure will be settled by allowing the aggrieved employee
                  or employees to work the same amount of time as missed and
                  paid at the same rate.



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7.5.3    OVERTIME PAY

         A.       The overtime rate to be paid employees for overtime hours
                  shall be one and one-half (1-1/2) times the regular rate of
                  pay for the occupation on which the overtime hours are worked,
                  except as excluded under 7.5.4 and 7.5.5 below.

7.5.4    OVERTIME RATES SHALL BE PAID FOR:

         A.       Hours worked in excess of eight (8) hours within the
                  twenty-four (24) hour period commencing with the time an
                  employee begins work, except that this shall not apply in
                  instances excluded by local agreements.

         B.       Hours worked in excess of forty (40) hours in any calendar
                  week.

         C.       Hours worked by an employee on the sixth or seventh work day
                  in a payroll week (Sunday through Saturday), during which work
                  was performed on employee's scheduled five (5) workdays,
                  except that if laid off by Company on scheduled workday, lost
                  time will be counted.

         D.       Any employee who must bump to a shift involving a short return
                  in order to stay in his classification or preserve his
                  employment.

         E.       Lost time for Union business will be counted as time worked
                  for overtime purposes for officers and grievance committeemen.

7.5.5    NONDUPLICATION

         A.       Payment of overtime rates shall not be duplicated for the same
                  hours worked, but the higher of the applicable rates shall be
                  used. Hours compensated for at overtime rates shall not be
                  counted further for any purpose in determining overtime
                  liability under the same or any other provisions, provided,
                  however, that a holiday, whether worked or not, shall be
                  counted for purposes of computing overtime liability under the
                  provisions of subsection 7.5.4C above and hours worked on a
                  holiday shall be counted for purposes of computing overtime
                  liability under the provisions of subsection 7.5.4A above.

         B.       Except as above provided, hours paid for but not worked shall
                  not be counted in determining overtime liability.

7.6      ATTENDANCE AND ABSENTEEISM

7.6.1    DETERMINATION OF ABSENTEEISM

         A.       An Absentee Rate will be computed for each employee and that
                  rate will be compared to a fixed percentage rate which the
                  Company will tolerate. Any 


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                  employee with a rate higher than the fixed rate will receive
                  the next higher degree of discipline.

         B.       The Absentee Rate will be computed over a time period of a
                  minimum of six weeks since previous discipline (if any) or a
                  minimum of six weeks from the present offense backwards toward
                  the last discipline (if any). If the employee has had no
                  previous discipline, the last six week period (or longer) can
                  be considered. For purposes of the calculation, the six week
                  period shall represent 30 days. The points referred to below
                  shall represent the absentee demerits. Thus, if an employee
                  has three unexcused absences (with proper two hour
                  notification of the absence) during said six week period, his
                  absentee percentage would be 10% (3130) and he would be
                  subject to disciplinary actions as noted below.

         C.       In computing the Absentee Rate, each unexcused absence,
                  unexcused tardy or unexcused "out early" will count as one
                  point towards absence. An unexcused absence with a late call
                  in (less than two hours notice preceding shift) will count as
                  one and one half absences. The sum of the above will be
                  divided by the total number of working days in the period
                  under consideration in B. above.

         D.       Management determines what will be an excused or unexcused
                  absence as follows:

         EXCUSED ABSENCES:

                  1.       Death in the family (those covered in article 6.6 of
                           the Basic Labor Agreement).

                  2.       Industrial Injury

                  3.       Union Business

                  4.       Jury Duty

                  5.       Extended Illness (for physically incapacitated days
                           accompanied by a doctors certificate).

                  6.       Sickness (when accompanied by a doctor's excuse).

         Unexcused absences consist of all absences not covered as excused.
         Tardiness and leaving early, unless for one of the above excused
         reasons will be considered unexcused. Failure to report off will result
         in an advancement to the next step, regardless of percentage rate.

         E.       The fixed absentee rate for the Mt. Meigs plant will be 4%.
                  Any employee with a higher rate as prescribed in B, C. and D
                  above will receive the next higher step in the discipline
                  procedure.


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         F. The Steps of Discipline are as follows:

                  1.       Written Reprimand

                  2.       1 Day Suspension

                  3.       3 Day Suspension

                  4.       5 Day Suspension pending discharge.

         G.       Any employee who maintains a percentage of less than 4% as
                  computed in B, C, and D above for six months since his last
                  reprimand will back up one step in the procedure. Any employee
                  who maintains a perfect attendance record for six months will
                  completely clear his absenteeism record.

7.6.2    REPORTING ABSENCE OR LATENESS

         A.       In reporting off from a scheduled shift, calls must be made 2
                  hours prior to the start of that shift, except 1 hour on "B"
                  shift. Failure to meet this time requirement will result in
                  one-half point against the attendance record and one point for
                  one hour or less notice.

         B.       Employees missing their scheduled turn will have one point
                  assessed against attendance record.

         C.       Failure to call in by the start of the shift and then missing
                  scheduled shift will result in advancement to the next step of
                  disciplinary procedure.

         D.       A late report for work without calling to advise of expected
                  lateness will result in an additional one-half point and said
                  employee may be reassigned or sent home.

                              ARTICLE 8 - VACATIONS

8.1      VACATIONS INTENT

         Vacations are granted as a reward for service, as indicated by the
qualifying requirements of this vacation plan. It is the intent of this section
to grant vacations, with pay, to those employees who are consistently employed
and who have given faithful attendance to their employment.

8.2      QUALIFYING SERVICES

         A.       In determining length of continuous service for the purpose of
                  deciding vacation eligibility of an employee, his total number
                  of years of continuous service shall be calculated from his
                  last date of hire (calendar year).


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         B.       Continuous service credit will be given an employee who has
                  "Lay- Off Standing," "Leave of Absence Standing" or "Military
                  Standing" on any vacation eligibility date, who returns to the
                  payroll of the Company during the calendar year, who completes
                  one (1) year or more of continuous service during that
                  calendar year, and who otherwise meets the eligibility
                  requirements of this Article 8.

8.3      ELIGIBILITY REQUIREMENTS FOR VACATION WITH PAY

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

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

         B.       Have received earnings in at least fifty percent (50%) of the
                  pay periods in the preceding calendar year, except that in
                  case of an employee who completes his first year of continuous
                  service in such calendar year, he shall have received earnings
                  in at least fifty percent (50%) of the pay periods during the
                  twelve (12) months following the date of his original
                  employment and still be on the payroll on his first
                  anniversary date.

         C.       No more than one (1) vacation shall be paid during any one (1)
                  calendar year.

         D.       In cases where an employee has been absent from work due to a
                  disability arising out of his employment at the Company's
                  plant, hours worked credit will be granted for vacation
                  purposes for all hours lost due to the disability during the
                  twelve (12) months following the date the injury occurred, but
                  not to exceed eight (8) hours a day or forty (40) hours a
                  week.

         E.       An employee entering the Military Service for his first
                  enrollment, who has completed at least one (1) year of
                  continuous service shall receive, for such year of enrollment,
                  not less than fifty percent (50%) of his vacation allowance,
                  notwithstanding the number of pay periods worked in.

         F.       If an employee does not qualify under the above provisions and
                  has two (2) years of continuous service and has worked at
                  least two hundred sixty (260) hours during the last preceding
                  calendar year, he shall be eligible for a prorated vacation.
                  based on the ratio of his actual hours worked to one thousand
                  forty (1,040) hours.

         G.       All active SiMETCO employees employed on the closing date of
                  the SIMCALA acquisition who are hired by SIMCALA shall be
                  recognized for prior continuous service for purposes of this
                  Section 8 only.

         H.       It is agreed that the purpose of this Article 8, Vacations, is
                  to provide actual time off to all employees; therefore, all
                  vacations shall be taken with the exception that


                                     - 11 -
   16

                  the Company may, with the consent of the employee, pay him
                  vacation allowance, in lieu of time off for vacation.

8.4      VACATION ALLOWANCE

         A.       In line with the above eligibility requirements, continuous
                  service shall earn vacation pay allowance as follows provided,
                  however, that no employee shall be entitled to more than two
                  weeks of vacation during the first two years of this
                  Agreement:



                           Years of Service               Weeks of Vacation
                           ----------------               -----------------
                                                           
                           1 but less than 3........................1
                           3 but less than 15.......................2
                           15 or more...............................3


         B.       All vacations shall be taken in full week periods; a one
                  week's vacation shall consist of seven (7) consecutive days, a
                  two weeks' vacation of fourteen (14) consecutive days, a three
                  weeks vacation of twenty-one (21) consecutive days. Each
                  vacation week shall include five (5) regularly scheduled
                  working days. When vacations are split, they shall be paid
                  accordingly.

         C.       Vacations will, as far as possible, be granted at times most
                  desired by employees, but vacations must necessarily be
                  governed by business conditions and the final right to
                  allotment of individual vacation period is exclusively
                  reserved to the Company in order to insure the orderly
                  operation of the plant.

8.5      VACATION PAY

         A.       Each employee requesting vacation time and pay shall fill in
                  and sign a regular Vacation Request Form furnished by
                  Management, and submit to his supervisor for approval. This
                  form will also require approval of the Plant Superintendent or
                  his designated representative, and will then be forwarded to
                  the Payroll Department for execution. In each case, the
                  employee must file such Vacation Request Form at least thirty
                  (30) days ahead of the desired vacation time in order to
                  exercise his seniority for preference on vacation time
                  approval. The Vacation Request Form provides that an employee
                  may list jobs he would be interested in bidding upon should
                  they be posted during his vacation period.

         B.       Each employee granted a vacation under this Section 8 will be
                  paid at his current hourly rate times forty.

         C.       Vacations shall commence after January 1st each calendar year
                  and as near as possible, shall be scheduled on a planned basis
                  of an approximate equal number of employees each month.



                                     - 12 -
   17

8.6      FORFEIT OF VACATION

         A.       An employee who voluntarily quits will forfeit all rights to
                  eligibility and pay unless he gives two (2) weeks' written
                  notice to Management and continues to work through the notice
                  period, and has met the eligibility requirements of Section
                  8.3 above.

         B.       An employee who is discharged for cause prior to an
                  eligibility date will forfeit all rights to eligibility and
                  pay.

         C.       Any employee with three years' service who quits after working
                  50 percent of any pay periods and thereby earning a vacation
                  for the next year shall receive said vacation pay after
                  January 1 subject to the provisions of 8.6A above.

                              ARTICLE 9 - HOLIDAYS

9.1      PRODUCTION OPTIONAL WITH COMPANY

         Regular production on days defined as holidays shall be optional with
the Company. When the plant is scheduled to work on any of these days, those
employees scheduled to work shall report on their regular shifts.

9.2      HOLIDAYS

         For the purpose of this Agreement, the following days shall be
considered holidays, and when such holiday falls on Sunday, it shall be observed
on Monday, and such Monday shall be construed as the holiday:

                  New Year's Day, Martin Luther King Jr's. Birthday, Good
                  Friday, Memorial Day, Independence Day, Labor Day,
                  Thanksgiving Day, Day before Christmas and Christmas Day.

9.3      EMPLOYEES NOT WORKING

         A.       All employees not required to work on a day on which any of
                  the above holidays occur shall be paid the rate of the job he
                  last worked or his bid rate, whichever is higher, for eight
                  (8) hours, if they worked their last scheduled day prior to
                  the holiday and their first scheduled day after the holiday,
                  except that Management shall waive the work requirement for
                  personal illness (when validated by a doctor's certificate
                  stating the employee's physical inability to work) or death in
                  the immediate family.

         B.       Paragraph A above shall not apply to employees laid off, on
                  leave of absence, or off due to an illness or injury except an
                  employee absent due to such causes who 


                                     - 13 -
   18

                  works during the pay period in which the holiday occurs. An
                  employee who is on vacation during the week in which a holiday
                  occurs shall be paid as computed in Paragraph A above.

9.4      EMPLOYEES SCHEDULED

         A.       Any employee who is normally scheduled to work on a day on
                  which any of the above holidays occur and who does not report
                  for work for any reason, may not be paid except that this work
                  requirement shall be waived for personal sickness or death in
                  the immediate family.

9.5      HOLIDAY PAY

         For all hours worked by an employee on any of the holidays specified in
Section 9.2 above, Holiday Pay shall be as follows:

         A.       The employee shall receive two (2) times his regular rate of
                  pay.

         B.       If an employee has been scheduled off but then is called to
                  work on his normal schedule on a holiday but works less than
                  eight (8) hours, he shall be entitled to the benefits of
                  Subsection 9.3A of this Article 9 to the extent that the
                  number of hours worked by him on the holiday are less than
                  eight (8).

         C.       An employee scheduled off on a holiday and then called out
                  shall receive the holiday premium pay for hours worked plus
                  the holiday pay as outlined in 9.3A above.

         D.       An employee working his normal scheduled shift on the holiday
                  who is required to work in excess of his normal eight (8) hour
                  shift shall receive no more than the rates outlined in 9.5A
                  above.

9.6      MAXIMUM PAY

         However, no employee shall receive more than the above specified rates
         for hours worked on any holiday.

                             ARTICLE 10 - INJURY PAY

10.1     ALLOWED TIME FOR INJURY

         A.       Any employee suffering an injury on the job, requiring the
                  attention of a doctor which in the opinion of the attending
                  doctor or nurse renders him unable to continue work, shall be
                  paid for the balance of that work shift at the rate of the job
                  he was working at the time of said injury. On the date of the
                  employee's injury, if 


                                     - 14 -
   19


                  such employee returns to work and finds he is unable to work,
                  and such employee then goes home, he shall be paid for the
                  balance of that shift.

         B.       All hours paid for above will count as hours worked for the
                  purpose of overtime calculation under the provision of Article
                  7.

         C.       When additional visits are required due to injury, and
                  supported by written proof of appointment, such employee will
                  be compensated for lost time for a maximum of two (2)
                  additional visits. Whenever possible doctors visits will be
                  scheduled on the employee's off time.

                      ARTICLE 11 - ADJUSTMENT OF GRIEVANCES

11.1 Should differences arise between the Company and the Union as to the
meaning and application of the provisions of this Agreement or should any
trouble of any kind arise in the plant, there shall be no suspension of work or
refusal to perform the duties assigned, on account of such differences, but an
earnest effort shall be made to settle such differences immediately in the
following manner.

Step 1

         A.       Grievances or complaints must be reported within five (5) days
                  from the date of occurrence. Grievances or complaints not
                  adjusted within fifteen (15) days of occurrence or within
                  fifteen (15) days (excluding Saturdays, Sundays and Holidays)
                  of the date the employee or employees or Committee become
                  aware of the occurrence, or last occurrence, on which the
                  grievance is based, shall be reduced to writing by the
                  aggrieved employee or employees or the grievance committeeman
                  on suitable forms furnished for this purpose in triplicate,
                  and presented to the immediate supervisor before they will be
                  considered further.

         B.       These written grievances shall be signed and dated by the
                  aggrieved employee and the committeeman. In such grievance,
                  should it be decided by the Personnel Department that it is
                  necessary to consider the merits and demerits of the
                  grievance, the department may do so, but in all cases it shall
                  enter a written disposition of the same within five (5)
                  working days of the date of the presentation of the written
                  grievance. The Personnel Department shall date and sign all
                  three copies of the written grievance and will return two
                  copies to the Chairman of the Grievance Committee.

Step 2

         A.       Grievances not settled in Step 1 above, may be appealed by the
                  Grievance Committee to the Personnel Department, which appeal
                  must be in writing, addressed to the Personnel Department and
                  must be presented to it not later than five (5) days after
                  receipt of the written disposition by the Personnel
                  Department.


                                     - 15 -
   20

         B.       Within five (5) days from the date of the presentation of such
                  written grievance, a representative of the Personnel
                  Department shall meet with the General Grievance Committee for
                  a discussion of said appeal and attempt to settle such
                  grievance.

         C.       It is understood, by the above paragraph, that the Grievance
                  Committee will investigate all alleged grievances before
                  processing them to Step 2 of this Grievance Procedure and any
                  alleged grievance found not to be based on fact will not be
                  affirmed by the Committee and will be withdrawn.

         D.       If no agreement is reached during the discussion of such
                  appeal, the Personnel Department will submit its written
                  disposition of such grievance within five (5) days from the
                  date of the hearing. Grievances not appealed in writing from
                  the decision in Step 1 within five (5) days from the date of
                  such decision shall be considered settled on the basis of the
                  decision last made and shall not be eligible for further
                  appeal.

Step 3

         A.       Grievances not settled in Step 2 may be appealed to the
                  representatives of the International Union and representatives
                  of the Company, which appeal shall be in writing and shall be
                  made within five (5) days from the date of the last decision.

         B.       Within another fifteen (15) days from such appeal, the
                  representatives of the International Union of his designees
                  shall contact representatives of the Company, in writing, to
                  request a meeting on the grievance, or advise that he has not
                  affirmed the grievance, and same has been withdrawn. After
                  such written appeal, a Management representative shall make
                  verbal or written contact, within ten (10) days, to arrange a
                  date for a meeting.

         C.       Management must answer in ten (10) days (excluding Saturdays,
                  Sundays, and Holidays) from the date of the meeting or from
                  the date of the last meeting if several meetings are held.

Step 4

         A.       If the Union wishes to appeal the disposition made in Step 3
                  of any grievance, a representative of the Union shall mail to
                  the Company a written notice of appeal of such grievance to
                  arbitration, within ten (10) days from such disposition.

         B.       When he deems it advisable, and prior to proceeding into
                  arbitration, even though appealed, the Union Staff
                  Representative may appeal a case in this Step 4, in writing,
                  to an Executive of the Company and the District Director of
                  the Union for the District involved, for review and an attempt
                  to solve. The Executive of the Company and the District
                  Director, or their respective designees, shall arrange to


                                     - 16 -
   21

                  meet at their convenience to review the case and develop all
                  facts in an effort to find a solution.

         Either party may call in witnesses who can contribute to a better
understanding or development of facts. The stipulated officials of the parties
will then proceed in their own method toward reaching a solution.

         If, after a thorough examination of the facts, no agreement can be
reached in this case, it may be withdrawn or may be referred back to the Union
Staff Representative to process on into arbitration. In either instance, the
Company shall be notified in writing within fifteen (15) days after the final
meeting of the officials referred to above.

         C.       1.       The Union upon the filing of an appeal to arbitration
                           will simultaneously request from the Federal
                           Mediation and Conciliation Service (FMCS) a panel of
                           not more than five impartial arbitrators. The Union
                           and the Company within 14 days of receipt of the FMCS
                           panel will select an arbitrator by alternating
                           strikes. The Union and the Company may agree to
                           request a second FMCS panel if the first panel is
                           deemed for any reason unacceptable to both.

                  2.       No new evidence shall be submitted in Step 4;
                           however, should any new facts develop after the Third
                           Step, said case shall be referred back to the Third
                           Step.

                  3.       Post hearing briefs will only be filed by mutual
                           agreement.

         D.       The said umpire shall not have the power to add to, subtract
                  from or modify the terms of this Labor Agreement or any
                  Agreement supplemental thereto. The decision of the umpire
                  shall be final and binding on both parties. The fees and
                  expenses (including the cost of the original copy of any
                  stenographic record) shall be paid equally and jointly if
                  jointly requested by the Company and the Union. It shall be
                  the duty of the umpire to make his decision within thirty (30)
                  days after final submission of the case to him, which includes
                  receipt of the transcript and post hearing briefs.

11.2     The employee or the committeeman in reducing any grievances to writing
         shall state clearly and concisely in writing all fads known to him
         which are the basis of his grievance and, if he claims that any Article
         or Articles of this Agreement are involved, he shall specify such
         Article or Articles on such grievance form.

11.3     Unless an extension of time has been mutually agreed upon by and
         between the parties:

11.3.1   The parties shall not be under any obligation to discuss any difference
         unless such difference is submitted within the time limits specified in
         Article 11.


                                     - 17 -
   22

11.3.2   If a grievance is not appealed from one stage of negotiation to the
         next higher stage of negotiation within the specified time limits, or
         if a written notice of intention to appeal a grievance has not been
         given within such time limits, such grievance shall be considered
         settled on the basis of the last answer which has been made; provided,
         however, that such settlement shall not constitute a precedent in any
         other case.

11.3.3   If a grievance is not answered within the specified time limits, the
         grievance shall be considered by the parties to have been granted;
         provided, however, that the disposition of such grievance shall not
         constitute a precedent in any case.

11.4     In all grievance hearings it shall be permissible for either party to
         bring in employees of the Corporation, who are involved in the
         grievance or other witnesses who may present direct evidence to the
         grievance.

11.5     The General Grievance Committee shall consist of three (3) employees
         designated by the Local Union. The lost time involved for a maximum of
         one Third Step meeting per month, if held, will be paid by the Company.
         Additional time off will be afforded without pay as may be required: To
         attend regularly scheduled or special committee meetings with
         Management; and to attend meetings pertaining to discharges or other
         matters which cannot be reasonably postponed until the time of the next
         regular meeting with Management.

11.5.1   Any officer or Grievance Committeeman of the Union required to attend
         meetings outside the plant property shall notify in writing the
         Personnel Department two (2) days in advance of such meetings so that
         necessary arrangements can be made for his replacement.

11.6     The Union, from time to time, shall furnish the Company with a list
         showing the names of the Officers of the Local Union, General Grievance
         Committee and Shop Stewards, and the Company shall recognize as
         Officers, Committeemen and Shop Stewards only such persons as are named
         on the most recent list certified.

                      ARTICLE 12 - SUSPENSION AND DISCHARGE

12.1.    PROCEDURE

         A.       In the exercise of its right as set forth in Article 4,
                  Management, of this Agreement, the Company agrees that no
                  employee shall be peremptorily discharged from and after the
                  date thereof, but that in all instances in which the Company
                  may conclude that an employee's conduct may justify discharge,
                  he must be first suspended. Such suspension shall be for not
                  more then five (5) calendar days excluding Saturdays, Sundays,
                  and Holidays). In all cases of suspension, a Union
                  representative and the employee's Foreman will be present at
                  the time of such action.


                                     - 18 -
   23

         B.       The employee will be advised of his rights for a hearing
                  during this period of suspension, and the employee or the
                  Grievance Committee may, if he believes that he has been
                  unjustly dealt with, request a hearing and a statement of the
                  offense before the Personnel Department with or without the
                  member or members of the Grievance committee present as he may
                  choose. Such hearing shall be held within five (5) calendar
                  days (excluding Saturdays, Sundays, and Holidays) after the
                  date of such request. If any such employee shall not request a
                  hearing within the five (5) day provisional discharge period,
                  his discharge shall become final. Reprimands, docking,
                  suspensions or anything detrimental (excluding absenteeism) to
                  the employee's work record will be removed from the employee's
                  record after twenty-four (24) months and shall not be used
                  against him or cited in arbitration.

         C.       At any such hearings all of the known facts concerning the
                  case shall be made available to both parties. After such
                  hearing, the Company shall conclude within five (5) calendar
                  days (excluding Saturdays, Sundays, and Holidays) whether the
                  discharge shall become final or, dependent upon the facts of
                  the case, that such discharge shall be revoked. If the
                  discharge is revoked, the employee shall be returned to
                  employment and shall receive such compensation, if any, as
                  provided in Section 12. 2 below.

         D.       If the discharge of the employee is affirmed, the employee may
                  within five (5 calendar days (excluding Saturdays, Sundays,
                  and Holidays); after such disposition, file a grievance under
                  the procedure for the adjustment of grievances set forth in
                  Article 11 of this Agreement, and such grievance shall be
                  filed at Step 3. If any such employee shall not file a
                  grievance within such five (5) day period, his discharge shall
                  become final. No new evidence shall be used after the Third
                  Step. However, should any new facts develop after the Third
                  Step, said case shall be referred back to the Third Step.

         E.       The Grievance Committee shall be notified of all such
                  suspensions and reason for same and shall, following a
                  requested hearing, receive a copy of the decision of the local
                  Management of the Company. However, Management shall be
                  relieved of all requirements if a strike, work stoppage, or
                  other impeding of production in violation of this Agreement is
                  in progress.

12.2     REINSTATEMENT PAY

         A.       If it is agreed by the parties or determined in arbitration,
                  as provided in Article 11 of this Agreement, that an employee
                  was unjustly discharged, such employee shall be reinstated to
                  his job, with no loss of seniority, and shall be paid such
                  amount, if any, as may be agreed upon by the parties or
                  determined in arbitration, to be fair and just.

         B.       Said employee shall be paid the amount of what would have been
                  his normal earnings including overtime shift premium, holiday
                  pay and all other earnings and 


                                     - 19 -
   24

                  benefits for his normally scheduled work during the period
                  from his discharge to his reinstatement, less any unemployment
                  compensation received during said period.

         C.       In the event a grievance concerning suspension or discharge
                  goes to arbitration, the arbitrator shall have the authority
                  to modify the penalty. The arbitrator may substitute his
                  judgment for that of the Company on appropriate discipline.

                               ARTICLE 13 -SAFETY

13.1     The Company shall continue to make reasonable provisions for the safety
         and health of its employees at the plant during the hours of their
         employment. Protective devices, special wearing apparel and other
         equipment necessary to properly protect employees from injury shall be
         provided by the Company, and such equipment shall be used by the
         employees. The wearing of appropriate safety apparel is mandatory.

13.2     A joint Management and Union Safety Committee shall be established for
         the plant. The committee shall be composed of one Management
         Representative and one Union Representative for each 150 employees;
         however, the minimum shall be four members, two being appointed by
         Management and two being appointed by the Union. Time spent on
         committee work by the members shall be compensated by the Company for
         time lost. The Committee shall hold regular monthly meetings, at times
         determined by the Committee, and shall be compensated for lost time.
         The duties of the Committee shall be:

         A.       To advise plant Management concerning safety and health
                  matters.

         B.       To make requested inspections of safety and health conditions
                  and participate in the investigation of all accidents.

         C.       To maintain a safety standard and a safety program for the
                  plant.

13.3     The purpose of the plant safety rules shall be for the protection of
         our employees, and flagrant or intentional violation of such rules
         shall subject an employee to immediate discharge.

13.4     Any unsafe condition or practice, alleged to be existing in the plant,
         shall be brought to the attention of the Supervisor immediately by the
         employee noticing said condition or practice. The Company will take
         appropriate action necessary to correct the condition within a
         reasonable time.

13.5     In case any employee alleges a condition to be dangerous over and
         beyond the inherent hazards of the job, to the extent of endangering
         the life or limb of an employee, the employee will immediately report
         the matter to the employee's Supervisor.


                                     - 20 -
   25

13.6     The company shall retain the right to require all employees to take
         annual physical examinations and bi-annual vision and hearing tests
         with the costs of such tests to be borne by the company.

                          ARTICLE 14 - LEAVE OF ABSENCE

14.1     The Company agrees to conform to the terms and conditions of the Family
         and Medical Leave Act.

14.2     UNION ABSENCE

14.2.1   An employee who has two (2) years or more of continuous service with
         the Company and who is duly elected or selected by the Union to an
         office of the Union which is the bargaining unit shall be granted a
         leave of absence for a period not to exceed two (2) years.

14.3     MILITARY AND NAVAL SERVICE

14.3.1   The parties agree to follow the Universal Military Training and Service
         Act, as amended, in connection with the reinstatement and employment of
         former employees of the Company, who have been honorably discharged
         from military and naval service of the United States, who have
         seniority rights under this Agreement.

14.3.2   An employee who meets the requirements of 14.4.1 above shall be granted
         time and military allowance or military allowance in lieu of time for
         the year of his reinstatement and employment, following such service,
         notwithstanding any eligibility requirements of Article 8, Vacations,
         of the Agreement.

14.3.3   An employee required to lose work in order to report for pre-induction
         physical shall be paid a maximum of eight (8) hours, provided he
         resumes work on his next scheduled workday.

14.3.4   An employee with one or more years of continuous service who is
         required to attend an encampment of the Reserve Armed Forces, shall be
         paid, for a period not to exceed two (2) weeks in any calendar year,
         the difference between the amount paid by the Government (not including
         travel, subsistence and quarters allowance) and the amount calculated
         by the Company in accordance with the following formula. Such pay shall
         be based on the number of days such employee would have worked had he
         not been attending such encampment during such two weeks (plus any
         holiday in such two weeks which he would not have worked) and the pay
         for each such day shall be eight (8) times his average straight-time
         hourly rate of earnings (excluding shift differentials and Sunday and
         overtime premiums) during the last payroll period worked prior to the
         encampment. If the period of such encampment exceeds two weeks in any
         calendar year, the period on which such pay shall be based shall be the
         first two weeks he would have worked during such period. Riot and
         National Guard duty are excluded from this allowance.



                                     - 21 -
   26

14.4     PERSONAL LEAVE

A.       An employee who desires to pursue a course of study at an accredited
         school of learning shall be granted such leave, not to exceed four (4)
         years, provided:

         1.       The employee advises the Company in writing at least thirty
                  (30) days prior to the start of such course of his desire for
                  a leave.

         2.       The employee must notify the Company and the Union in writing
                  at least once a year of his continued interest to resume
                  active employment with the Company upon completion or
                  terminating such course of study.

         3.       The employee must report for reemployment within thirty (30)
                  days after completion or termination of such course of study.

B.       Such personal leave of absence, outlined in A above, shall not
         constitute a break in the record of continuous service of such employee
         if he meets the requirements outlined therein. No more than two (2)
         such leaves shall be granted at one time except as may be mutually
         agreed to.

                  ARTICLE 15 -- SENIORITY RULES AND REGULATIONS

15.1     PREAMBLE

         A.       The Seniority Rules hereafter set forth, which implement the
                  seniority provisions of the Production and Maintenance Labor
                  Agreement, shall be used to govern the application of
                  seniority from and after August 8, 1995, as it relates to
                  hourly-paid production and maintenance employees represented
                  by the United Steelworkers of America.

         B.       These rules shall remain in effect unless and until modified
                  by written agreement signed by Management representatives and
                  appropriate representatives of the United Steelworkers,
                  including the Chairman and Secretary of the Grievance
                  Committee.

         C.       The intent and spirit of these Seniority Rules and Regulations
                  is to insure the placement and retention of the most qualified
                  employees with the longest continuous service.

15.2     PROBATION

         A.       Any person having one hundred-eighty (180) calendar days or
                  less of continuous service shall be deemed to be a
                  probationary employee. During such probationary period, the
                  Company may separate said probationary employee at its
                  discretion.


                                     - 22 -
   27

         B.       Any employee retained after sold one hundred-eighty (180)
                  calendar days shall become a regular employee.

         C.       Should a new hire be laid off prior to the end of his
                  probationary period and then recalled at a later date (not to
                  exceed one hundred eighty (180) days), previous probationary
                  time will be used in determining the completion of the
                  probationary period only.

         D.       Should the layoff continue past the one hundred-eighty (180)
                  day period, the employee shall be considered as a new hire and
                  a new probationary period shall be served.

         E.       Those former employees of SiMETCO who were rehired by SIMCALA,
                  INC. shall not suffer a break in continuous service.

15.3     LOSS OF SENIORITY

         A.       Voluntary quit.

         B.       Discharge for proper cause.

         C.       Failure to report for work or failure to report reason for
                  absence for four (4) consecutive days.

         D.       Failure to report for work or report intent following a
                  layoff:

                  (a) if notified of recall to work, either in person or by a
                  person-to--person telephone call, he will report intent to
                  return and, if he refuses, he will be sent a notice by
                  registered or certified mail, and failing to report within
                  twenty-four (24) hours after receiving notice, he will be
                  terminated.

                  (b) Should the Company be unable to reach you by telephone,
                  you will have four (4) calendar days to report to work after
                  receipt of notice by registered or certified mail.

         E.       Absence in excess of any leave of absence granted under
                  Article 14.

         F.       If an employee shall be absent because of layoff or physical
                  disability, he shall continue to accumulate continuous service
                  during such absence for two (2) years, and shall be eligible
                  for recall for an additional period equal to (a) two (2)
                  years, or (b) the excess, if any, of his length of continuous
                  service at commencement of such absence over two (2) years,
                  whichever is less. Any accumulation in excess of two (2) years
                  during such absence shall be counted, however, only for the
                  purposes of this Article 15, including local agreements
                  thereunder, and shall not be counted for any other purpose
                  under this or any other agreement between the Company and


                                     - 23 -
   28

                  the Union. In order to avoid a break in service after an
                  absence of two (2) years, the employee must give the Company
                  annual written notice that he intends to return to employment
                  when called, if the Company at least thirty (30) days prior
                  thereto has mailed him a notice at the most recent address
                  furnished by him to the Company that he must file such written
                  notices.

         G.       Absence due to a compensable disability incurred during the
                  course of employment shall not break continuous service,
                  provided such individual is returned to work within thirty
                  (30) days after final payment of statutory compensation for
                  such disability or after the end of the period used in
                  calculating a lump sum payment.

15.4     SENIORITY FACTORS

         A.       The parties recognize that promotional opportunity and job
                  security in event of promotions, decrease of forces, and
                  recalls after layoffs should increase in proportion to length
                  of continuous service, and that in the administration of this
                  section the intent will be that wherever practicable full
                  consideration shall be given continuous service in such cases.
                  In recognition of the responsibility of Management for the
                  efficient operation of the works, it is understood and agreed
                  that in all cases of promotion, layoff and recall the
                  following factors will apply:

                  (a)      Ability to perform the work.

                  (b)      Training, experience and education.

                  (c)      Prior job performance.

                  (d)      Continuous Service (Plant Service).

                  Where (a), (b) and (c) are relatively equal, (d) will be the
                  determining factor.

         B.       Nothing in this Subsection "B" shall prevent Plant Management
                  and the Grievance Committee from mutually agreeing to fill an
                  equal or lower job in a promotional sequence with a senior
                  employee, nor shall anything in this Subsection "B" prevent
                  Plant Management and the Grievance Committee from executing an
                  agreement in writing to provide an opportunity to any employee
                  displaced in the course of a reduction of forces to exercise
                  his seniority to the extent appropriate to obtain a job paying
                  higher earnings; provided, such employee is otherwise
                  qualified with respect to relative ability to perform the work
                  and relative physical fitness as provided above. Plant
                  Management and the Grievance Committee may mutually agree to
                  provide training for employees disabled in the plant and to
                  assign them to vacancies for which they are qualified on the
                  basis of such seniority arrangements as they may determine.


                                     - 24 -
   29

         C.       Wherever used in these rules (unless expressly defined
                  otherwise) "continuous service" shall mean an employee's
                  length of continuous service within the plant, calculated from
                  the first day worked on any occupation in the plant or his
                  first day worked upon re-employment following a break in
                  continuous service in the plant, whichever is later.

         D.       If the plant continuous service dates for two (2) or more
                  employees are the same, then the employee with the lowest dock
                  number will be accorded benefits to be derived from having the
                  greater plant continuous service date.

15.5     SENIORITY UNITS

         A.       The units to which the seniority factors, as set forth above,
                  shall be applied are the lines of promotion, also referred to
                  as "seniority units" which are attached as an Appendix hereto.
                  These units may be changed or now units established from time
                  to time by written agreement, on chart form, signed by Local
                  Plant Management and by the Chairman of the Grievance
                  Committee of the Local Union.

         B.       The seniority unit in which an employee has status on a
                  permanent basis is referred to hereinafter as the employee's
                  "home seniority unit."

15.6     PERMANENT VACANCIES

         A.       Appointments to fill permanent vacancy in a line of promotion
                  (including a permanent vacancy in a regular relief assignment)
                  created by an employee promotion, demotion, death, discharge,
                  quit, retirement or transfer out of the seniority unit shall
                  be made in the following order of priority:

                  1.       Employee(s) with the greatest seniority occupying the
                           immediately preceding occupation to the vacant
                           occupation in the line of promotion, or occupying an
                           occupation of equal rank in the line of promotion
                           where lateral movement is provided for by connecting
                           lines on the chart will be offered the promotion.

                  2.       In the event that the candidate above refuses a
                           promotion, then employees on successively lower
                           ranking occupations in the line of promotion will be
                           similarly considered for promotion.

                  3.       Each successive lower ranking job in the line of
                           promotion is filled in the same manner with the
                           employees present, then employees who have recall
                           rights to the line of promotion shall be recalled in
                           order of their plant continuous service to fill the
                           remaining vacancies.

                  4.       After all employees with seniority rights in the line
                           of promotion have been recalled, then the vacancy
                           will be filled by the following bid procedure:


                                     - 25 -
   30

                           a.       When it becomes necessary to fill a job
                                    vacancy through the posting of a bid the
                                    senior employee(s) within the classification
                                    will be permitted the option of moving to
                                    the vacancy before the bid is posted. The
                                    vacancy remaining will then be subject to
                                    the bid award.

                           b.       Notice of the permanent vacancy shall be
                                    posted in the clock room. Such notice shall
                                    show the department, job title, job class,
                                    estimated number of employees required, date
                                    of posting, designed location where bid is
                                    to be filed, and shall remain posted for
                                    seven (7) calendar days.

                           c.       Any employee holding plant continuous
                                    service in the plant may bid for the job in
                                    writing on forms furnished by the Company,
                                    and bids shall be received by Management
                                    during the seven (7) calendar day period
                                    provided above. When the employee presents
                                    his bid at the designated location in the
                                    plant, his bid shall be recorded as received
                                    and the employee shall be given a copy as
                                    evidence of receipt of his bid.

                           d.       Management shall have seven (7) days (longer
                                    periods than seven (7) days may be required
                                    if there is a large volume of bids received)
                                    following the seven (7) day posting period
                                    in which to make an evaluation of all
                                    bidders, the selection will be made on the
                                    basis of:

                                            (a)      Ability to perform the
                                                     work.

                                            (b)      Training, experience and 
                                                     education.

                                            (c)      Prior job performance.

                                            (d)      Continuous Service (Plant 
                                                     Service).

                           Where (a), (b) and (c) are relatively equal, (d) will
                           be the deciding factor.

         B.       Promptly upon selection management, notice of the employee
                  selected by Management to fill a permanent vacancy shall be
                  posted for ten (10) days on the same bulletin boards, as the
                  notice of vacancy was posted. The notice shall show the name,
                  badge number, plant continuous service date of the employee
                  appointed, department, occupation title, the effective day of
                  the appointment, and the day of posting. In the event
                  Management determines not to fill a vacancy that has been
                  posted for bidding, a cancellation notice will be posted in
                  the same manner.


                                     - 26 -
   31

                  1.       Any complaint or grievance contesting Management's
                           selection must be filed in writing with the
                           department Superintendent or his designated
                           representative during the ten (10) day period that
                           the notice of appointment is posted. If no grievance
                           is filed within the ten (10) day period as above
                           provided, no grievance will thereafter be entertained
                           either by the Union or the Company unless an employee
                           was temporarily absent during the entire ten (10) day
                           period that the notice of appointment was posted
                           because of vacation, illness, injury, and in such
                           event in order to be considered, such employee must
                           file a grievance within the ten (10) day period after
                           the date he returns to work.

                  2.       If a grievance protesting the appointment to fill a
                           permanent vacancy is settled in favor of the
                           aggrieved employee, he shall displace the employee
                           assigned to the occupation in question; and all other
                           affected employees shall be returned to their former
                           positions. If additional employees are needed, the
                           job will again be posted for bids.

         C.       New jobs may be filled directly by the bid procedure or may be
                  inserted into an existing line of promotion and then filled by
                  candidates occupying the immediately preceding occupation to
                  the new job after it is inserted in the line of promotion. In
                  the event that the Union and the Company fail to agree on the
                  appropriate position in the line of promotion, Management may
                  insert the job in the position they deem appropriate subject
                  to challenge in the Grievance Procedure, including
                  Arbitration.

         D.       Should an employee in the seniority unit eligible for
                  promotion be unable to accept such assignment because of
                  temporary absence due to vacation, illness, injury or leave of
                  absence, another employee may be temporarily assigned to the
                  vacant occupation, pending return to work of the employee
                  initially eligible for promotion. The Company may fill an
                  occupation on a temporary basis during the time required to
                  determine the successful candidate by the bid procedure.

         E.       An employee who refuses a permanent promotion shall be
                  required to sign a waiver form. Such waiver shall be binding
                  on the employee until revoked by the employee in writing, when
                  he will again be considered for such promotion.

15.7     FILLING TEMPORARY VACANCIES

         A.       VACANCIES OF THREE WEEKS (21 DAYS OR LESS).

                  In filling a temporary vacancy in an occupation within a line
of promotion for a period of three (3) weeks or less, the employee on the same
turn occupying the occupation immediately preceding the vacant occupation with
the greatest length of plant continuous service shall be offered the temporary
promotion. In other words, in filling all temporary vacancies in a line of
promotion, each turn shall stand on its own.


                                     - 27 -
   32

         B.       VACANCIES OVER THREE WEEKS (21) DAYS

                  In filling a temporary vacancy within a line of promotion,
other than one caused by an employee vacation that continues beyond the initial
three week period, the vacancy will be filled as though it was permanent (A.1.).
The employee with the greatest length of plant continuous service occupying the
occupation immediately preceding the temporarily vacant occupation regardless of
the shift he is working. Such assignments shall be posted.

         C.       STATUS OF EMPLOYEES AT THE END OF A TEMPORARY VACANCY

                  1.       When an absent employee gives notice at least two (2)
                           hours in advance of his intention to return to work
                           at the end of a temporary vacancy (that was filled on
                           the turn), he will on reporting displace the employee
                           promoted in his place and, in turn, the temporary
                           incumbents will be returned to the occupations from
                           which they came in the line of promotion if their
                           plant continuous service still entitles them to be
                           retained in such jobs; otherwise they will exercise
                           their plant continuous service on successively lower
                           ranking jobs.

                  2.       When an absent employee is to return to work
                           following an extended period wherein the temporary
                           vacancies were filled by crossing turns, then
                           displacement of all temporary incumbents and their
                           returning to the occupations from which they came
                           will take place for the next payroll week covered by
                           the posting of the weekly work schedule if their
                           plant continuous service still entitles them to be
                           retained in such jobs; otherwise, they will exercise
                           their plant continuous service on successively lower
                           ranking jobs. In the interim, employees returning
                           from extended periods of absence will be offered
                           whatever jobs are available without displacement in
                           their home line of promotion.

         D.       When it is necessary to supplement the regular scheduled crews
                  by doubling over employees for a period estimated at less than
                  a full turn, the employees doubled over will be assigned
                  independently of the regular scheduled crews. This does not
                  affect the filling of temporary vacancies created by absences
                  of any member of the regular scheduled crews.

15.8     PROMOTIONS, REDUCTION IN FORCES AND RECALLS AFTER LAYOFFS

         A.       A qualified employee may exercise his plant continuous service
                  to displace a junior employee on lower ranking occupations or
                  occupations of equal rank where lateral movement is provided
                  for by connecting lines on the he line of promotion charts
                  only under the conditions listed below, provided he will move
                  laterally or downward in the line of promotion only until he
                  reaches the highest occupation where his qualifications and
                  his plant continuous service is sufficient for him to


                                     - 28 -
   33

                  hold. Employees displaced by more senior employees in a
                  reduction in force will move likewise.

                  1.       In a reduction in forces.

                  2.       If the occupation to which he is assigned is
                           eliminated.

                  3.       If he is demoted because of inability to meet
                           satisfactorily the requirements of the occupation to
                           which he is assigned.

         When an employee's position is filled following a reduction in force,
he will be required to return to that position (unless the employee has since
bid into another line of promotion).

         B.       If an employee would otherwise be laid off due to a reduction
                  in force, or the elimination of the occupation to which he is
                  assigned, he may be retained in the line of promotion if he
                  has sufficient plant continuous service to displace a junior
                  employee on the occupation that is next above the occupation
                  to which he was last permanently assigned; provided, however,
                  the employee with the greatest seniority similarly located
                  will get the benefits of the promotion provided he is
                  qualified.

         C.       Employees who are the successful bidders for a job in a line
                  of promotion will enter the line of promotion with their
                  entire plant continuous service date for promotional purposes.

         D.       Employees may be promoted on increases in forces to an
                  occupation of higher rank in the line of promotion or an
                  occupation of equal rank in the line of promotion where
                  lateral movement is provided by connecting lines on the chart,
                  only when a vacancy is to be filled in such occupation.

15.9     TRANSFERS AND RETAINING SENIORITY RIGHTS

         A.       When an employee temporarily transferred is recalled for
                  regular assignment to a job in his home line of promotion, he
                  shall return to his home line of promotion on the next weekly
                  schedule.

15.10    TEMPORARY TRANSFER AT MANAGEMENT'S DIRECTION

         A.       An employee, who is temporarily transferred at Management's
                  direction will be considered in filling permanent vacancies in
                  higher ranking jobs in his home line of promotion the same as
                  if he were still actively employed in that line of promotion
                  on the job from which temporarily transferred.

         B.       If at any time during the term of a temporary transfer, the
                  services of an employee are no longer required by Management,
                  his temporary transfer will be terminated.


                                     - 29 -
   34

         C.       Senior employees, on rotating or frozen shift jobs, will be
                  given preference once every year for changing shifts on
                  January 1.

15.11    TEMPORARY LOSS OF WORK ARISING OUT OF STRIKES OR WORK STOPPAGES

         A.       Because of the difficulties of reopening the plants, no claims
                  for violation of seniority provisions shall be made or
                  processed in the grievance procedure with respect to the first
                  two (2) weeks after the ending of a strike or work stoppage.

15.12    MANNING NEW FACILITIES

         A.       Prior to the manning of a new or expanded department at the
                  Mt. Meigs Plant, Management and Plant Grievance Committee
                  shall meet to seek agreement in accordance with the Labor
                  Agreement to facilitate efficient manning and preserve job
                  security for longer service employees.

                            ARTICLE 16 - TERMINATION

16.1     This Agreement shall terminate at the expiration of sixty (60) days
         after either party shall give written notice of termination to the
         other party but in any event shall not terminate earlier than August 8,
         2000. The company agrees to sit down with the union and discuss wages
         after thirty (30) months.

16.2     It is understood and agreed herewith that with the signing of this
         Agreement, both parties waive or withdraw all other questions raised
         and/or discussed during negotiations but which have not been written
         into this Agreement specified parts hereof or agreed to by other
         action.

16.3     Any notice given under this Article 16, shall be given by registered or
         certified mail, and, if given by the Company, shall be addressed to the
         United Steelworkers of America, 6200 E. J. Oliver Blvd., Suite 44,
         Fairfield, AL 35054, and, if given by the Union, shall be addressed to
         SIMCALA, Inc., P.O. Box 68, Mt. Meigs, Alabama 36057. Either party
         shall, by like written notice, advise the other of any change in
         address.

16.4     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, religious creed, national origin, age, sex,
         handicap or veteran status.

                              ARTICLE 17 - TRAINING

It is the intent of the Company to provide all of its employees with the
training required to evaluate, control and continuously improve all production
and support service processes and to maintain and upgrade the Plant to ensure
efficient production. This will enable the Company to provide its customers with
products and services which meet or exceed the customers' requirements and
expectations.


                                     - 30 -
   35

The following types of training will be required for all hourly employees:

         Basics of Statistical Process Control

         --       Training approach is to include:

                  --       Use of SIMCALA historical data in training programs.

                  --       Specific applications data used for special
                           functional areas:

                           --       Shipping data used to train Shipping
                                    employees.

                           --       Production data to train Production
                                    employees.

                           --       Raw material data to train Maintenance
                                    employees.

         --       Training in Statistical Process Control techniques

                  --       Gathering data, averaging numbers, SPC chart
                           production.

                  --       Determination of SPC control limits.

                  --       Recognition of out--of--control conditions and
                           appropriate actions.

         Problem--Solving Skills

         --       Training is to include:

                  --       Trend, Gap, Pareto and Ishikawa (Fishbone)

         Minimum Competency Training (for employees below high--school
         competency)

         --       Training approach is to include:

                  --       Needs analysis for each employee.

                  --       Specific training as needed.

         ESTIMATED TRAINING HOURS

         Basics of Statistical Process Control: 6 Hours per Employee
         Problem Solving Skills: 2 Hours per Employee
         Minimum Competency Training:  Structured to Individual's Needs

         Other training for electricians shall be developed by the Company to
         ensure adequate levels of competency when considering the electrical
         complexity of the Plant.


                                     - 31 -
   36

         TRAINING DELIVERY APPROACH

         - All training is to be delivered by qualified trainers at either the
         SIMCALA conference room or off-site. Employees will be compensated at
         the bid hourly rate for all training hours.

                          ARTICLE 18 - ENTIRE AGREEMENT

Section 1.        This Agreement contains the sole and entire agreement and
                  understanding of the Company and the Union with respect to the
                  entire subject matter hereof, all prior discussions,
                  negotiations, commitments, and undertakings being merged
                  herein. During the negotiations which resulted in this
                  Agreement, both the Company and the Union had the unlimited
                  right and opportunity to make demands and proposals with
                  respect to any subject matter not removed by law from the area
                  of collective bargaining, and the understandings and
                  agreements arrived at by the parties hereto after the exercise
                  of that right and opportunity are set forth in this Agreement.
                  The Company and the Union, for the life of this Agreement,
                  each voluntarily and unqualifiedly waives the right, and each
                  agrees that the other shall not be obligated, to bargain
                  collectively with respect to any subject or matter whether or
                  not such subject or matter is specifically referred to or
                  covered in this Agreement.

Section 2.        No Local Agreements, Bargaining History of Assumption of
                  Liability.

                  It is understood and agreed that no "local" agreements, letter
                  agreements, or understandings, bargaining, history, arbitral
                  or grievance precedent, plant practices or "traditions," which
                  were or may have been observed prior to the date of this
                  Agreement shall have any force or effect on the parties
                  hereto. The Union understands and agrees that the Company by
                  this Agreement is not assuming liability for any wages,
                  benefits, vacations or other rights which may have accrued
                  prior to the date of acquisition of the Plant by SIMCALA.

Section 3.        This Agreement may not be modified of terminated orally, and
                  no modification, termination, or waiver shall be valid in
                  writing and signed by the party against whom the same is
                  sought to be enforced.



                                     - 32 -
   37


         IN WITNESS of the foregoing, the Company and the Union have caused this
Agreement to be executed by their duly authorized representatives, all on the
8th day of August, 1995.

SIMCALA, INC.                               UNITED STEELWORKERS OF AMERICA 
                                            AFL--CIO--CLC
BY:                                         BY:

/s/ C.E. Boardwine                          /s/ George Becker
- --------------------------------            ------------------------------------
C.E. Boardwine, President/C.E.O.            George Becker, Intl. President

/s/ Donald J. Williams                      /s/ Leo W. Gerard
- --------------------------------            ------------------------------------
Donald J. Williams, Corp. Dir.              Leo W. Gerard, Intl. Sec.-Treasurer
Human Resources

/s/ Arthur M. Danison                       /s/ Richard H. Davis
- --------------------------------            ------------------------------------
Arthur M. Danison, Plant Mgr.               Richard H. Davis, Intl. V.P. Adm.

                                            /s/ Leon Lynch
                                            ------------------------------------
                                            Leon Lynch, Intl. V.P. Human Affairs

                                            /s/ Joe L. Kiker
                                            ------------------------------------
                                            Joe L. Kiker, Director, District 9

                                            /s/ David L. Newell
                                            ------------------------------------
                                            David L. Newell, Staff Rep.


                                            LOCAL 8538 NEGOTIATING COMMITTEE

                                            /s/ Clarence W. Hellums, Jr.
                                            ------------------------------------
                                            Clarence W. Hellums, Jr., Pres.

                                            /s/ Johnny L. Ross
                                            ------------------------------------
                                            Johnny L. Ross, Vice Pres.

                                            /s/ T. H. Hatfield
                                            ------------------------------------
                                            T. H. Hatfield, Chairman

                                            /s/ Kyle King
                                            ------------------------------------
                                            Kyle King, Committeeman



                                     - 33 -
   38


                                  SCHEDULE 'A'

                           STANDARD HOURLY WAGE SCALE




         Job Class '95                                           Effective
         -----------------------------------------------------------------
                                                                  
               1-2                                                $11.485
                 3                                                $11.602
                 4                                                $11.719
                 5                                                $11.836
                 6                                                $11.953
                 7                                                $12.070
                 8                                                $12.187
                 9                                                $12.304
                10                                                $12.421
                11                                                $12.538
                12                                                $12.655
                13                                                $12.772
                14                                                $12.889
                15                                                $13.006
                16                                                $13.123
                17                                                $13.240
                18                                                $13.357




                                     - 34 -
   39



                                  SIMCALA INC.
                                   401-K PLAN

SIMCALA, Inc. and United Steelworkers of America have agreed upon the following
provisions in regard to establishing a 401 (k) plan for the benefit of hourly
employees at the Montgomery, Alabama plant:

a.       The 401 (k) plan will be established no later than March 1, 1995.

b.       Each hourly employee has the option of participating in the plan by
         contributing, from each pay, a percentage of their compensation.

c.       The Company has agreed to match 100% of the first 2% of employee
         contributions.

d.       Employee contributions are not now subject to Federal and/or State
         income tax.

e.       A choice of investment options will be offered for each participant.

f.       Employee contributions are 100% vested.

g.       Employer contributions are 100% vested after five years of service,
         including plant service prior to enrolling in the plan.

h.       SIMCALA, Inc. will pay the administration charges necessary to maintain
         the plan.

i.       SIMCALA agrees to fund any employee contributions which were deducted
         from an employee's payroll check but not paid by SiMETCO, Inc. (under
         its old plan date: __/10/90), as of September 17, 1993. Such amounts
         shall be funded plus 5% interest from the date signed below over the
         first twenty (20) days after the establishment of the plan.

SIMCALA, INC.                                UNITED STEELWORKERS OF AMERICA
                                             Local 8538

/s/                                          /s/
- --------------------------------             -----------------------------------

/s/                                          /s/
- --------------------------------             -----------------------------------

/s/                                          /s/
- --------------------------------             -----------------------------------

                                             /s/
- --------------------------------             -----------------------------------



                                     - 35 -
   40


                                  SIMCALA, INC.
                            PROFIT SHARING AGREEMENT


Section 1.        Effective August 8, 1995, the operating profit of the Mt.
                  Meigs plant will be considered in the derivation of a Profit
                  Sharing Bonus for all employees of the plant. The term
                  "operating profit" is defined as the Mt. Meigs Plant profit
                  before interest expenses and taxes ("Profit").

Section 2.        A Profit Sharing Pool is established and will include the
                  total amount of funds that will be distributed to the hourly
                  employees of the plant at various levels of operating profit.
                  All active plant hourly employees who satisfy the eligibility
                  requirements of Section 5 of this Appendix will share equally
                  in the funds provided at the appropriate level of the
                  Distribution Pool (the "Pool") for the amount of the operating
                  profit earned. The Pool will remain a fixed amount for the
                  life of the 1994-199_ Agreement. As necessary, the monthly
                  bonus will be calculated through interpolation within the
                  Pool.

Section 3.        The Profit Sharing Bonus, if earned, will be distributed on a
                  quarterly basis. The first quarter of the Plan will be the
                  three month period beginning fiscal January. 1995 and
                  concluding at the end of fiscal September, 1999. The last
                  quarter of the Plan will be the quarter ending fiscal
                  December, 1999.

Section 4.        The Company will provide to the Union on a timely basis at the
                  end of each quarter information, including P&L statements and
                  pertinent data from outside audits regarding the Mt. Meigs
                  Plant operating profit and the derivation and calculation of
                  the quarterly Profit Sharing Bonus. Checks for the Bonus will
                  be issued promptly upon calculation of the Bonus.

Section 5.        To be eligible to receive a Profit Sharing Bonus for a
                  particular quarter, an employee must meet the following
                  requirements:

                  (a)      The employee must have satisfied his probationary
                           period by the beginning of the quarter being
                           considered.

                  (b)      The employee must have worked at least two hundred
                           forty (240) hours within the quarter, or have been
                           off work due to an on-the-job-injury. Hours will be
                           considered as worked for all paid time away from the
                           job. Union leave and S&A.


                                     - 36 -
   41

Section 6.        A cap of $150,000 is provided on the Profit Sharing Pool.



                       QUARTERLY PROFIT                      DISTRIBUTION POOL
                       ----------------                      -----------------
                                                              
                          $3,000,000                              $150,000
                          $2,500,000                              $120,000
                          $2,000,000                              $ 90,000
                          $1,500,000                              $ 65,000
                          $1,000,000                              $ 40,000
                          $  500,000                              $ 20,000




                                     - 37 -
   42

                                 SIGNATURE SHEET
                            PROFIT SHARING AGREEMENT


SIMCALA, INC.                                UNITED STEELWORKERS OF AMERICA
                                             Local 8538

/s/
- --------------------------------             -----------------------------------

/s/
- --------------------------------             -----------------------------------

/s/
- --------------------------------             -----------------------------------

                                             /s/
                                             -----------------------------------

                                             /s/
                                             -----------------------------------

                                             /s/
                                             -----------------------------------

                                             /s/
                                             -----------------------------------

                                             /s/
                                             -----------------------------------



Dated:
        ------------------------



                                     - 38 -
   43

                                  SIMCALA, INC.
                       LOCAL AGREEMENTS - MONTGOMERY PLANT
                                 AUGUST 8, 1995



1.       Safety shoe allowance will be $50.00 per calendar year. Allowance not
         used during the year of entitlement may be carried over into the next
         year with the total accumulation not to exceed two allowances during
         any calendar year.

2.       Overtime meal allowance will be set at $2.00 and $5.00.


SIMCALA, INC.                                UNITED STEELWORKERS OF AMERICA
                                             Local 8538

/s/
- --------------------------------             -----------------------------------

/s/
- --------------------------------             -----------------------------------

/s/
- --------------------------------             -----------------------------------

                                             /s/
- --------------------------------             -----------------------------------

                                             /s/
                                             -----------------------------------

                                             /s/
                                             -----------------------------------

                                             /s/
                                             -----------------------------------

                                             /s/
                                             -----------------------------------



                                     - 39 -
   44


                                   Exhibit 'A'


1.       Maintenance Department Progression:

                              Certified Electrician
                                        |
                              Shift Maintenance Man
                                        |
                              Welder / Maintenance
                                        |
                                   Blacksmith
                                        |
                                 Oilier / Helper


2.       V.S. Department Progression:

                              Raw Material Handler
                                        |
                                Stores Attendant
                                        |
                                 V.S. Attendant
                                        |
                                   V.S. Bagger

3.       Shipping Department Progression:

                            Finished Material Handler
                                        |
                                 Shipping Labor

4.       Furnace Department Progression:

                                 Head Furnaceman
                                        |
                                   Furnaceman
                                        |
                                   Head Tapper
                                        |
                                     Tapper
                                        |
                                  Furnace Crane
                                        |
                                 Ladle Repairman
                                        |
                                  Metal Breaker
                                        |
                                  Furnace Labor
                                        |
                               Electrode Installer




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