DRAFT

Memorandum of Agreement

By and Between

Verso, Inc. – Luke Mill (the “Company)

And

United Steel, Paper and Forestry, Rubber, Manufacturing, Allied Industrial and Service Workers International Union (the “USW”) on

behalf it’s Local 8-00676

I. Term of Agreement - Covered in the Master Agreement II. Economic TermsA. Wages – Covered in the Master AgreementB. Premium Pay – Covered in the Master Agreement C. Pyramiding – Covered in the Master Agreement D. Shift Differentials - 1st year – No change, 2nd year $.35 & $.45, 3rd year $.40 & $.50

E. Pension – Covered in the Master Agreement F. Active Medical - Covered in the Master Agreement If the Affordable Care Act (ACA) or rules related to the ACA’s (including but limited to provisions on “excess benefits”) adversely impacts Verso’s and/or the employee’s cost or offer cost savings opportunities, the parties shall meet to discuss an appropriate redesign of benefits and/or alternative delivery methods, while preserving the parties’ overall intent and not increasing the total bargained package.

It is both parties’ intent that plan changes will be made, if necessary, to avoid the ACA excess benefits tax. G. Dental – Covered in the Master Agreement H. Accident & Sickness – Covered in the Master Agreement I. Life and AD&D – Covered in the Master Agreement

III. Language RevisionsArticle II - Union Recognition Section 1b: - eliminate last sentenceSection 1: - add the following:“c. In order to achieve the objectives of the preceding paragraph the parties agree to establish a Labor/Management Committee for the purpose of exchanging information related to the business and discussing issues and opportunities for improvement that will positively impact the mill. The committee will be made up of four (4) members from labor and four (4) members of management. The committee will meet on a monthly basis or as needed unless the committee decides to change the frequency of meetings.Section 2: - add the following:“c. The Company will furnish the USW International an electronic list every six (6) months of bargaining unit employees that have (1) had union dues deductions withheld during that period and (2) have been hired, laid-off or discharged. This list would include the employee’s mailing address, date of employment and classified rate of pay.”

Article III – Hours of WorkSection 3: - delete the 2nd sentence of the 1st paragraph and add the following paragraph: “Should it become necessary for an employee to be absent from work he/she is expected to notify their supervisor as far in advance as possible, but not later than two (2) hours prior to that start of their scheduled shift, and give the reason for the absence. If an employee is prevented from giving such notice by reason of a bona fide emergency, notice must be given as soon as possible thereafter.” Section 6: - add the following:“b. The Company commits that a draft schedule for the following work week will be posted by 12:00 noon on Thursday and the final work schedule will be posted by Friday at 12 noon.

Article IV - Rates of Pay and Wage ScaleSection 3 - Modified to read as follows:“A shift differential will be paid for work performed on 2nd shift from 3pm to 11pm and on 3rd shift from 11pm to 7am. The amounts of shift differential and conditions under which they will be paid as follows:

2nd shift: $.30 per hour 3rd shift: $.40 per houra. Shift differentials are not paid to regular 1st shift (day) employees (non-tour worker)

working overtime on the 2nd and 3rd shifts.

b. Shift differentials will be paid to regular 1st shift (day) employees who are scheduled to work or are replacing a regular tour worker during the shifts stated above.

c. The differentials applicable to any tour during which a tour worker works overtime will be included in calculating the tour worker’s overtime rate of pay. The differential applicable at the time a tour worker reports for work as scheduled will be included in calculating the tour worker’s guarantee under Article V, Section 4.”

Section 4 - Delete Section 5 – Modify to read as follows:“The Company will maintain job descriptions for existing bargaining unit positions. Any changes in duties to a job will be communicated to the Union in writing within 30 days of the change. When the Company creates a new job or substantially changes the duties of existing jobs (by making substantial changes to job duties and responsibilities, abolishing jobs, transferring the duties to other jobs or by any other means), the following steps will be followed:

1. The Company and the Union will meet to negotiate the rate of the new job or the rate of the existing job that has been substantially changed. If agreed retroactive pay will be paid from the initiation of the changes.

2. In the event of a new job, the initial rate will be discussed prior to implementation.3. If no Agreement can be reached, the Company will set the job rate, but such rate may

be subject to negotiations at the next general contract negotiations, and any change agreed upon at that time will be made retroactive to persons then on the payroll of the Company to such time as the Company and the Union shall agree.

4. The Union may also request the use of non-binding mediation prior to the next negotiations

5. In the unlikely event a substantial change in job duties would result in a grade decrease, no employee shall be reduced by more than one labor grade in the classification in which he/she is permanently assigned due to downward changes resulting from re-evaluation during the term of the agreement.

6. In view of the foregoing procedure, the establishment of wage rates shall not be a subject of arbitration.

Section 6 - Modified to read as follows:“In the event a new or temporary job lasts more than six (6) months the Company and the Union will discuss the future plan for the job. If it is deemed that there is a need for the position to continue on a permanent basis, the Company and Union will determine the proper location of the job within the department or job sequence. A temporary job will not last more than 12 months unless agreed to by the parties.”

Section 11 - Delete Section 12 – Modify to read as follows:“Any employee who has a death in their immediate family defined as: spouse, children, parents, siblings, grandparents, grandchildren, in-laws (mother, father, daughter, son), step-parents, step-siblings, step-children, and domestic partner (where the employee can verify the

partner relationship) shall, upon request, be allowed up to 3 days of regularly scheduled lost time pay to attend to business related to the death. Time must be taken between (three) 3 days prior to the funeral, or three (3) days following the funeral or death of the family member.

In the event an employee has a death of a spouse’s or domestic partners’ grandparents, in-laws (sister or brother), and spouses of step-children will be allowed off, if scheduled, to attend the funeral. Regularly scheduled lost time will be paid if applicable.

The Company may require proof of death and relationship before making any such payments.”

Article VI – Seniority - See Attachment 1 for revised Article VI language.

Article VII – Vacations – Language in Appendix E (Vacation Plan) was revised and moved to this article. See Attachment 2 for new Article VII language.

Article VIII – Holidays

The number of recognized holidays remain at thirteen (13) but two (2) of the holidays will be changed to floating holidays in order to allow employees more flexibility in scheduling time off.

Washington’s Birthday Day and Columbus Day will be replaced with floating holidays. As such the following will be added to Section 1:

“e. Individual employees will be allowed to select their floating holidays as follows:

1. The employee must record his/her choice of floating holiday(s) and whether he/she will or will not work on a form provided by the Company. For scheduling purposes the form must be submitted to his/her supervisor no later than Tuesday at 3pm of the week preceding the day requested as the floating holiday.

2. Whenever an employee has been absent with supervisory permission, he/she may elect to have that day considered as a floating holiday by so indicating on the form referenced in #1 above.

3. If an employee fails to work on one or more regularly scheduled days during a workweek in which they had chosen another day to be a floating holiday and indicated he/she would work the holiday, the first day missed will be considered the holiday rather than the day chosen.

4. All floating holiday requests are subject to operating and maintenance requirements and supervisory approval, which will not be unreasonably denied nor be denied solely for the purpose of avoiding overtime.

5. Within a department, the maximum number of employees allowed off on a given day

shall not exceed the number established by the department. Section 1: b. (add the following)“(4) is a member of the Local’s Executive Board that has been granted permission to be off on Labor Day in order to attend a union sponsored activity.”

Article X – Leaves of Absence(Eliminate Sections 8 – 11 and replace and replace as follows)“Section 8: The current Company’s Military Leave Policy, dated May 1, 2017, will be followed for the term of this Agreement.Section 9: Leaves of absence will be reviewed and upon approval by the Company, enable veterans to take advantage of the educational benefits provided for veterans under applicable federal law, provided that upon application for such leave the employee presents a certificate of eligibility for such benefits, at an educational or training institution approved according to such law. Leaves granted under this Section will expire thirty days after the employee either discontinues or completes such education or training. Leaves granted to employees who have not completed at least ninety days’ service with the Company prior to application therefor.

Article XII – Safety and Health (Replace the existing language with the following)“Section 1: The Company shall comply with existing laws and OSHA regulations pertaining to the safety, health and sanitation of its employees. The Company shall make reasonable provisions, including heating and ventilation wherever practical, for the safety and health of its employees during their hours of employment.

Section 2: The Company and the Union commit to work together to maintain an occupational health and safety process in order to enhance a safe and healthy workplace. The parties recognize that safety is everyone’s responsibility and that active participation in safety activities is an important element of our safety program process. As such, the Union and Company will not only encourage all employees to work in a safe manner but to also be active participants in safety related activities.

Section 3: The Company and Union agree to establish a Mill Safety Committee for the purpose of exchanging information and discussing safety related matters such as (but not limited to) safety policy, practices, procedures, communications, workplace hazards, near misses, incidents, injury prevention and PPE.

The Mill Safety Committee will be made up of two (2) management and two (2) union representatives, hourly safety advocates, Safety Manager and EHS Manager. The committee will select a Company and Union Co-Chair and will meet on a monthly basis. The committee co-chairs may schedule additional meetings as needed. The Union and Company agrees to support the Committee in its efforts to create a mill-wide safety culture with a focus on preventing incidents or injuries.

Union representatives on the committee will be paid scheduled lost time when involved with Mill Safety Committee activities. Representatives required to attend meetings or related activities on an “off day” will be paid for time spent.

The parties have agreed to the following with respect to hourly safety advocates:

1. A joint Labor/Management Committee will develop and review on an ongoing basis the qualifications, duties, responsibilities and evaluation process of the Safety Advocate position. Safety Advocate openings will be posted following normal procedures. A joint Labor/Management Committee will select the best person from among those that apply.2. Safety Advocates will serve a three (3) year term. Terms will be staggered among the advocates to ensure an ongoing level of experience. After a Safety Advocate has served their three (3) year term they can request to be considered for one (1) additional term. The Labor/Management Committee referenced above will decide whether or not to grant the request. 3. The current Safety Advocates will be grandfathered under their current agreement.4. Employees accepting a Safety Advocate position will retain all contractual seniority rights. Employees filling the advocate’s former job will be denoted as a “T” promotion.

5. The daily work of the Safety Advocates will be directed by the EHS Manager or his designee. The EHS Manager and Local Union President will work closely to ensure that the work of the safety advocates is meeting the needs of the operation and the members of the local union. 6. Safety Advocates will be responsible for fulfilling their obligations to the local Union and to the Company. Failure to do so may result in the Union or the Company requesting the advocate be returned to their former job and his/her unexpired term be filled as outlined in 1 above. 7. The rate of pay for the Safety Advocate position will be subject to the following progression: Initial Rate: Grade 31* After one (1) year of experience: Grade 32* After two (2) years of experience: Grade 33* Three years of experience or more: Grade 34* Each labor grade step increase is subject to approval by the joint Labor/Management

Committee. Compensation will be for actual hours worked

*The advocate will receive the greater of their permanent labor grade rate or the scheduled labor grade above.

Section 4: Recognition and correction of workplace safety and/or health hazards as well as prompt correction at the lowest level in the organization are essential elements of the mill’s safety, health and environmental process. As such, employees are responsible for reporting potential workplace safety and/or health hazards in accordance with company procedures without fear of retaliation or discipline. Likewise, the company is responsible for mitigating or abating safety and/or health hazards. The Company also commits to working towards a system whereby employees can track the progress of safety concerns they have entered into the Medgate system.

Section 5: It is an expectation of every employee to be safe from the start to the finish of every task. Every employee has a right and responsibility to stop any task they feel is unsafe. Employees are not required or expected to perform a task they believe places them at risk. Should such a situation arise the employee will notify their supervisor to discuss their concerns and participate in the discussion and planning for how the task can be performed safely. If the unsafe condition or hazard cannot be mitigated or abated, the work will be delayed until such time as the task can be performed safely.

Section 6: In an effort to prevent injuries and create a safer work environment, the Union is encouraged to participate in any incident investigation that would impact their members. Employees participating in an incident investigation have the right to union representation should they choose to have someone present.

Section 7: When an employee works sixteen consecutive hours in a rolling 24 hour period, they will be given, and must take an eight (8) hour rest period before returning to work. This section does not relieve the Company of contractual obligations pertaining to pay practices.

Section 8: The Company will provide one (1) pair of safety shoes to non-probationary employees each year of the current contract.

Section 9: The Company will provide one (1) pair of prescription safety glasses to non-probationary employees each year of the current contract. The cost of extra features such as, but not limited to, progressive lenses, tinting, special lenses or frames will be paid by the employee.”

Article XV – Discharge and Discrimination Change title of Article XV to read “Discrimination, Discipline and Discharge” Section 2 - (add the following)

“I: Violating Company policies, mill rules or safety rules and practices. The Company will review the seriousness of the rule violation and issue the appropriate level of discipline for each infraction.”

Article XVI – Grievance and Arbitration (Delete Sections 1-3 and replace with the following)“Section 1: Issues subject to the grievance procedure are differences arising out of the interpretation or alleged violation of any provision of this Agreement. Grievances growing out of discharge, layoffs, promotions, demotions, hiring, rehiring, and transfers, as well as grievances arising over the interpretation, application, or alleged violation of any provisions of this Agreement and differences relative to working conditions not specifically covered herein are subject to the provisions of this Article.

Section 2: Issues subject to the grievance procedure will be presented in writing within 21 days after they occur. Grievances will be adjusted in a timely manner utilizing the steps outlined

below. It is agreed that the reason for the time limits herein is to assure prompt settlement of grievances. Time limits within this Article may be extended with mutual agreement between the Company and the Union.

First Step: Between the aggrieved employee(s) and his/her immediate supervisor. The department steward may be present. The supervisor will give his/her decision within five (5) days. If no settlement is reached the Union will, within ten (10) days following receipt of the supervisor’s response, appeal the grievance to the Second Step of the grievance procedure. Second Step: A mutually acceptable hearing date will be set by the department Business Unit Manager or designee and the Local Union President. Every effort will be made to set a hearing date within five (5) days from the date the grievance is appealed to the Second Step. The Company will provide the Union with a written response to the grievance within ten (10) days following the date of the hearing. Grievances not satisfactorily adjusted at the Second Step will be appealed by the Union to the Third Step of the grievance procedure within ten (10) days following receipt of the Company’s response. The Grievance Committee (limited to 2) will be paid for lost work time or actual meeting time at their scheduled rate for attending 2nd step meetings.

Third Step: A mutually acceptable hearing date will be set by the Human Resources Manager and the Local Union President. The original grievance will be confirmed or restated in writing at the hearing. The Company will provide the Union a written response to the grievance within ten (10) days following the date of the hearing. Within thirty (30) days after receiving the

Company’s response the Union will notify the Human Resources Manager whether it will proceed to arbitration.

The Grievance Committee will be paid for lost work time or actual meeting time at their scheduled rate for attending 3rd step meetings.

Fourth Step: Arbitration proceedings shall be initiated within thirty days following receipt of the Company's decision at Step Three. If this does not occur within the thirty day period the grievance will be considered settled on the basis of the last response rendered by the Company and will not be subject to further appeal.

Grievances similar or identical to other grievances for which arbitration has beenInitiated or are in the process of arbitration, shall not be deemed to have been waived under this section unless unsettled and arbitration is not applied for within thirty days after the decision on a similar grievance arbitrated.

Grievances growing out of discharge, layoff, promotion, demotion, or transfer shall be subject to the Grievance Procedure. No arbitrator shall have the power to substitute his or her judgement for that of Management unless he or she finds that Management has violated this Agreement.

The arbitrator in all grievance cases herein covered by this Agreement during the term of this Agreement shall be a person to be mutually agreed upon by the Company and the Union as promptly as possible. Pending his or her selection or if he or she resigns or is unable to act, or if the parties are unable to agree upon his or her successor, the arbitrator shall be appointed by the Federal Mediation and Conciliation Service (FMCS). Arbitrators shall not accept a case unless they can give their decision within 30 days after due date of briefs.

The functions of the Arbitrator will be to interpret and apply the terms of this Agreement. The Arbitrator will have no power to add to, subtract from or amend any of the terms of this Agreement, extend the duration thereof, or impose any obligation on either of the parties not specifically covered by this Agreement or by law. The expenses of the arbitrator will be borne jointly by the parties involved and the decision of the arbitrator will be final and binding upon all parties involved.

Section 3: Both the Company and the Union shall have the right to bring into any grievance conference the complainant(s), witness(s), or any representative deemed necessary for the facilitation of any matter at issue.

Article XXII - Flexibility and Utilization (New Article)

“Through the use of flexibility and proper utilization of available manning the parties endeavor to maximize the efficiency of the Luke Mill, improve productivity and protect the employment security of employees, with full regard to all safe work practices.

An employee’s basic work assignment will be to perform duties normally associated with their classification and department. However, in order to achieve efficiency of mill operations, employees will be expected to occasionally perform other duties as part of their regular job. This will include performing duties from other jobs, lines of progression, or departments.

Employees will not be asked to perform any duties that would jeopardize their safety or the safety of a co-worker. Proper instruction or training will be provided, as necessary. Employees may decline any work outside of their normal duties they feel jeopardizes their safety or the safety of a coworker.

In applying this new flexibility and utilization concept, neither party sets precedent by a particular application or failure to make an application when a situation presents itself. Flexibility and utilization applications will vary based upon the circumstances and resources available at any given time.

Where the Company believes that permanent changes to the job function of employees will help to increase the efficiency of the mill, the parties agree to meet and negotiate such changes prior to implementation.

No active employee will lose employment as a result of the implementation of this article.

The Company and Union agree to form a joint committee of equal hourly and salary representation to review and provide input on specific applications of flexibility.”

Article XXIII – Contracting Out Maintenance, Non-Skilled and Semi-Skilled Work (New Article)

“The Company shall have the right to engage independent contractors to perform new construction, or the replacement or modification of existing buildings, equipment or other facilities. The Company’s right shall not be abridged by any other provisions of this agreement. The Union retains the right to request a list of work being done by outside contractors 10 days

prior to the initiation of the work unless the work is deemed emergency in nature.

In determining whether or not to contract out maintenance work currently under the jurisdiction of the USW, determination will be based on qualified employees being available as

well as whether specialized skills and/or equipment are needed. In the event work is contracted out, the Company will provide its rationale and justification upon request by the USW. If the USW does not agree with the Company’s decision, the dispute shall be immediately referred to the 3rd step of the grievance procedure.

Any contracting out of non-skilled or semi-skilled labor must be agreed upon between the Union and the Company.

It is agreed that no USW bargaining unit employee shall be laid-off as a result of the decision to contract out work.

Article XXIV – Maintenance Apprentice Program (New Article)“The Company and the Union will form a combined apprenticeship program based on the needs of the Luke Mill. The program shall be agreed to by both parties and will include, (1) crafts identified to be part of the program, (2) will consist of both classroom and on-the-job training and (3) will have an established progression schedule to be followed by potential candidates. Candidates with prior experience or training may be placed at an agreed upon level of the established progression schedule.”

The parties agreed that Lubrication Technicians would be considered for future apprenticeship opportunities and that this agreement be incorporated into the Maintenance Apprenticeship Program.

Appendix B – Standard Rate Schedules (add the following to the end of the rate schedule)“Painting – Although the Company reserves the right to contract out painting, the following procedure will apply when painting is done by employees:

1. When a non-maintenance employee is assigned painting work during their regular scheduled shift and their job is not operating, he/she will be paid their job rate for that day.

2. If a non-maintenance employee accepts painting work on overtime, he/she will be paid the Labor Grade 6 rate of pay.

3. If a non-maintenance employee is laid-off from his/her job or department and is assigned painting work, he/she will be paid the Labor Grade 6 rate of pay.

4. If an employee is assigned painting work within their physical capabilities while recovering from a compensable injury, he/she will receive their classified rate.

5. Maintenance employees will be paid their classified rate when performing painting on their shift or on overtime.

Appendix C (To be inserted as attachment)

Appendix D – (Job descriptions for classifications covered under the CBA will be maintained on an ongoing basis. Due to the fact that job changes may occur during the term of this Agreement, individual job descriptions will not be part of the CBA.

Appendix E (Delete - Move Appendix E to Article VII – Vacations and revise language as shown in Attachment 2)

Appendix F (Delete)

Appendix H (Delete - Language incorporated into Article VI – Attachment 1)

Appendix J – (Delete)

Appendix K (Delete - The parties agreed to a new Attendance Policy (Attachment 3) that will be in effect for duration of this Agreement.

Appendix L (Delete)

Appendix N (Delete- Move Appendix N to new Article XXV and replace the language as follows)“Article XXV – Maintenance Department EfficiencyThe Company and the Union agree to form a committee comprised of hourly and salaried representatives to review and work towards resolution of Maintenance Department operating issues. The intent of this committee is also to explore opportunities to improve the overall efficiency of the department. When changes are recommended by this committee, the Company and the Union will agree to the proposed changes prior to implementation.”

Appendix O (Delete by moving the language in Appendix O to Article II, Section 3 as follows:“c. The Company commits to deduct union dues from bargaining unit employees as directed by the USW. The exception to this is the monthly review of employee hours and rebate if they work less than 40 hours in the month. Since these dues have already been paid to the USW, the Company would expect this rebate would be requested by the employee and administered by the Local.”

Miscellaneous

CBA Administrative Changes – The following administrative changes will be made to this Agreement:

Re-number articles and sections to reflect any changes and to assist in locating information and language.

Change any language to reflect position titles and departments within current organization (example: change Personnel Department to Human Resources).

Change references to employee(s) to team member(s).

Crew Concept – During the course of these negotiations, both the Company and Union have identified issues that would need to be addressed prior to implementing any type of crew concept at the Luke Mill. Some issues would take time to evaluate and address. However, the parties believe that a crew concept at Luke could benefit the operation and employees. That being the case, the parties have agreed that the Company and Union will be form a joint committee to continue evaluating all aspects of a crew concept, including the structure of current job sequences, scheduling, and vacancy filling procedures in order to work towards implementation during the course of this Agreement.

The parties also agree that the best approach is to select a pilot department for implementation

purposes, which would allow the joint committee to learn via employee input what works as well as and what issues may need further evaluation and discussion.

Departmental Guidelines - Within 90 days from the date of ratification of the CBA, the Company and Union will review and make needed updates or revisions for all proposed items to be included into the Maintenance and respective operating area(s) department guidelines. Department guidelines are intended to be a set of living documents that will be reviewed jointly by the Union and Company on a regular basis. When agreed upon, revisions will be made and the Company and Union will jointly communicate the changes and updates to all department employees.

Drug & Alcohol Free Workplace Policy – The parties have agreed to a Drug & Alcohol Free Workplace Policy (Attachment 4) that will be in effect for duration of this Agreement.

Investment Education – While the parties realize they cannot provide financial advice, they do recognize the value of employee awareness and participation in investment education programs. As such, the Company commits to continue to offer access to educational and planning services provided by its Savings Plan provider(s). Such services include but are not

limited to: employee communication and education, asset allocation, and retirement planning education.

Labor Pool (Central Manpower) – The Laborer – Central Manpower classification consist of employees trained to fill openings in entry level classifications within job sequences as well as perform general tasks as assigned across the mill.

Prior to this Labor Agreement the most senior employees in the Laborer – Central Manpower classification could indicate which department they preferred to work in on a temporary basis. As of the effective date of this Agreement, employees in the classification will no longer be allowed to indicate such a preference and will be assigned as needed. However, existing preferences will be honored for one (1) year from the effective date. After that date employees with prior preferences will also be assigned as needed.

Employees assigned to the Laborer – Central Manpower classification will utilize the same transfer process as other employees in the mill. However, in the event a permanent opening occurs within a job sequence and no other employees within the mill have submitted a transfer request to fill the opening, the junior employee (on the basis of Mill Seniority) in the Laborer – Central Manpower classification will be required to fill the opening.

Maintenance Multicraft ForemenThe Company provides the following clarifications to the Multicraft Foreman Job Classification:

As currently stated in the existing job description the duties of assisting in planning maintenance work orders and activities in the assigned area will become an ongoing job task.

The individuals currently filling this position will be trained for the maintenance planning activities as needed.

Future utilization of the individuals filling this position may include the current foreman duties, assisting in maintenance planning activities.

The individuals filling these roles will have to meet the defined criteria below within the specified training period

The Company offers to meet with the Union on an on-going basis to discuss implementation issues and to receive input regarding the assignment of the positions.

New duties will result in an increase to labor Grade 35.

Following is the list of criteria (but not limited to) for the Maintenance Multicraft Foremen position:

Able to learn and be proficient in SAP, including planning functions Very strong on using personal computers (Word, Excel, Email, etc.) Able to multitask and balance competing needs Adhere to the full MWS system Follow work schedules Complete work correctly, completely, and quickly Detail oriented in approach to work Leadership capability

Non-full Time Union Officers – The parties recognize that elected non-full time officers of USW Local 676 can spend significant time released for union business and that this could negatively impact their retirement savings by reducing fixed and matching contributions. Accordingly, the parties have agreed to develop a process to address this problem by “truing up” company contributions based on certain earnings. The earnings that will be trued up will be for time spent carrying out their responsibilities as local union officers at conferences, training and ongoing contract administration such as negotiations, grievance preparation, arbitrations, etc. but would not include non-local union officer work such as union only sponsored political work and organizing. All IRS regulations on 401K plans will be adhered to in

this process. The agreed upon process will be as follows: The USW local president will notify the Company in advance which local officer(s) will be

missing regularly scheduled worktime to participate in any of the union business activities listed above.

That notification will include the name of the officer(s), nature of the union business, dates/hours the officer(s) will be missing regularly scheduled work time, and their scheduled rate of pay.

The union officer(s) who miss regularly worktime will be paid through the current payroll system.

At the end of the month a calculation of hours and pay the local will be responsible for reimbursing the Company for will be calculated by Human Resources.

An invoice will be sent to the Local for the amount to be reimbursed. A check will then be sent by the Local to the Company within 14 days to the address listed

on the invoice. The Local will also email the check number and the date the check was sent to Human Resources.

PAC Check-Off – The Company will deduct Political Action Committee (PAC) contributions for active bargaining unit employees who have submitted authorization for such deductions from their wages. Such deductions will be promptly remitted to the Secretary-Treasurer of the USW PAC Fund.

Past Practices & Other Agreements - The parties have made a good faith effort to review all prior side agreements (written or unwritten), letters of intent, past practices, previous local contract issues or any other written or oral agreements. To ensure this process is as complete as possible:

1. Within 120 days from the date of ratification either party may present for review any side agreement, local contract issues or letter of intent that may have been missed. Any side agreement, local contract issue or letter of intent not incorporated into this contract or confirmed by the parties in writing and dated prior to that date will no longer be considered valid.

2. If any applicable past practices arise within 12 months from the date of ratification that can be proven in writing or by evidence of past practice, the parties agree to meet and negotiate over any changes prior to implementation. Any past practice not incorporated into this contract or confirmed by the parties in writing and dated prior to that date will no longer be considered valid.

3. The Company agrees to abide by any valid past practice, side agreement, or letter of intent presented during the time periods outlined above until such time as the parties meet to negotiate any changes.

Attachment 1

ARTICLE VI

SENIORITY

Section 1: An employee acquires seniority status herein, one hundred-twenty work days after he or she starts to work. After having served such probationary period, mill seniority starts as of the day the employee began to work. During such probationary period of one hundred-twenty work days, the Company in its discretion shall have the right to transfer or discharge such probationary employee. Upon completion of ninety calendar days, probationary employees will be eligible to enroll in benefits and receive job rate pay.

a. In the event a probationary employee with thirty or more calendar days of service is laid off and later re-employed within three months, the former service shall be credited toward the said one hundred-twenty work day probationary period; and his or her mill seniority shall date back one hundred-twenty work days from the date of completion of the probationary period.

Section 2: If an employee is to be laid off, recalled, promoted or demoted to other hourly paid jobs, mill seniority will prevail, but the affected employee must have the ability and job qualifications. Changes shall be made along the following lines:

a. Promotion and Demotion:

1. The job sequence for promotion and demotion of hourly paid employees is set forth in Appendix "C" annexed hereto. Job sequence changes may be negotiated by mutual agreement or upon request signed by 75% or more of the employees in the sequence. Any such employee request for a job sequence change affecting the job at the lowest level in the sequence will be approved by the membership of the local union before the request is proposed to Management.

2. (a) Floaters shall accumulate rights in the higher classifications provided they are next in line for promotion to the higher classification due to mill seniority or the fact that a senior employee refused the assignment as floater.

(b) An employee who refuses temporary work on a higher job in a sequence for promotion, or who refuses work as a floater, shall forfeit promotional rights through the line of sequence to all employees who promote in the sequence ahead of him or her and shall be so informed at the time. In the event 50 percent of the employees in a classification refuse promotion, the Union will meet with such employees in an attempt to understand their reasons for freezing and to encourage them to promote. If such attempts are unsuccessful, those employees “frozen” will be grandfathered and will retain the right to sign additional refusals in the classification where refusals have been previously signed, but no additional employees will be permitted to refuse promotion until the percentage of people “frozen” drops below 50 percent. The only exceptions are as follows:

i. Employees classified in a department on July 1, 2009 will retain the right to sign a refusal without affecting grandfathered employees provided they are senior to those grandfathered employees.

ii. An employee exercising displacement rights will retain the right to refuse a promotion provided he/she is senior to those frozen grandfathered

The Company will determine the qualification process in each department. Qualified employees will be promoted to the next higher job classification within the sequence by mill seniority when a permanent position becomes vacant

Floaters within a sequence shall accumulate rights in the higher classifications provided they are the next qualified employee in line for promotion to the higher classification on the basis of mill seniority.

An Employee Action Form (EAF) will be immediately processed by the applicable time keeper when a permanent vacancy is filled.

Employees may refuse promotion to or within an established job sequence. The number of employees frozen within a classification will be limited to 25% percent of the classification. In the event the employee refusing promotion decides to promote or is cleared medically to promote in the future, they shall remain junior to the employee/s who promoted around them, either temporary or permanent, through the progression sequence. Refusals will be considered satisfied once the employee/s who promoted around the refusing employee either quits, dies, retirees or reaches the top job in the sequence. Refusals are not required on lateral moves.

Current employees that have refusals signed will retain the right to continue to be frozen in their current classification. In an event the employee decides to promote they will be placed in the progression line behind the last employee promoted ahead of them, either temporary or permanent, because of the refusal.

In the event a department has multiple options of progression to promote, employees may choose to either promote to an undesirable classification with the right to hold grandfathered rights of promotion to their preferred classification or remain in the lower classification and remain there until their preferred classification becomes available at which time they must promote.

In the event an employee does not qualify for a higher job in the sequence the Company agrees to allow for additional training. In the event an employee continues to be disqualified they will remain in their current classification as long as there is no more than 25% of the classification frozen; and the demoted employee will not cause the classification to exceed a total of 50%. In the event either is exceeded the disqualified employee will be required to demote one additional job in the sequence.

3. Employees with the most mill seniority will be given preference to work on swing crews. If the swing crew is not filled in this manner, the employees with the least mill seniority will have to fill the swing crew.

(a) The Union will cooperate with the Company and will endeavor to induce employees to accept promotion. Employees with the most mill seniority on the next lower job in the job sequence will be offered the opportunity to qualify for promotion. If the vacancy is not filled in this manner, the employee with the least mill seniority will be expected to fill the job.

4. Employees with the most mill seniority will be given preference, if they can qualify, to work in their classification when a permanent opening occurs. When a permanent opening

occurs within a classification the most senior employees permanently assigned to the classification (using mill seniority) will be given preference for shift assignments. No more than two (2) shift preference moves are allowed.

5.3. Mill seniority among those employees on the next lower job in the job sequence shall govern in cases of promotion. Mill seniority shall also govern in cases of demotion.

6.4. In cases of promotion, a trial period of two weeks shall be granted unless the affected employee is obviously unqualified. An employee who is incapable of performing a job to which he or she has been promoted shall be returned to his or her former job by Management within two weeks without loss of seniority status.

5. When the Company is provided written documentation concerning a leave of absence and it is determined that the leave will be in excess of six (6) consecutive months, a temporary “T” promotion will be made to fill the vacancy. The “T” status will entitle the affected employee to all contractual rights of the promotion with the exception if the employee returns to work, the “T” employee will be required to demote by seniority. The “T” designation will remain until the employee either returns to work or terminates employment in the department. At the time the vacancy becomes permanent, the opening will be posted and the promotion will become permanent.

7.6. When an employee is demoted within a sequence, mill seniority shall govern in determining the highest job to which he or she can demote.

8.7. Grievances in regard to promotions or demotions shall be made in writing within sixty 21 consecutive days after the employee is classified and receives the job rate on a permanent basis, after which no grievance will be considered unless the time limit has been extended with mutual agreement.

8. Employees who are denied promotions due to a lack of permanent manning in a department job sequence will be made whole for all lost wages and benefits until such time as the promotion occurs under the following criteria:

a. In the event an employee transfers or gives their two (2) week notice, the employee being denied promotion will be compensated beginning 30 days after the permanent vacancy occurs.

b. In the event an employee does not give at least a two (2) week notice, the employee being denied promotion will be compensated beginning 45 days after the permanent vacancy occurs.

b. Classifications and Departments:

1. Mill seniority among those employees permanently classified in a department gives precedence through the department.

2. The confines of and the job classifications in each department are as set forth in Appendix "D" annexed hereto.

3. New hires placed directly in a department will, provided they complete their probation period, maintain seniority rights to remain in that department unless displaced per the lay-off provisions outlined in this Article.

c. Mill Seniority:

1. Seniority in the mill starts with the day an employee begins to work at the mill and applies only where specifically stated in the Agreement. Seniority in the mill starts the day an employee begins work at the mill and only applies where specifically stated in the Agreement. When two (2) or more employees start to work on the same day relative seniority among these employees will be established using individual dates of birth (in order from oldest to youngest). 2. In cases of permanent layoffs in non-maintenance jobs the use of mill seniority (as defined in this article) will be used to displace a less senior employee or enter a new department.  The employee can choose to displace any employee junior in seniority. The established department qualification process will be followed. The employee will be entitled to normal training and must qualify at the end of the training period. In the event the employee does not qualify they will be placed in the labor pool.

In the event an employee decides to displace a maintenance employee the following criteria must be followed:

a) Only maintenance apprentices can be displaced under this language.

b) The employee can displace as high as their seniority would warrant up to the 18 month level in the apprentice progression schedule.

c) The employee will be reviewed at the 30 day period to assess the level of their competency.  In the event the employee fails to qualify at the apprenticeship level of the employee they displaced, they will be placed in the labor pool

Employees classified in a classification which is discontinued; employees laid off from their department on a mill seniority basis due to a reduction in force:

a) With more than two years mill seniority, if they can qualify, will be placed on jobs which are occupied by employees with up to one-half of the mill seniority credited to the employee being placed.

b) With up to two years’ mill seniority, if they can qualify will be placed within ten days after lay-off on jobs occupied by employees junior to them in mill seniority displacing those with the least mill seniority.

c) In the event of a permanent shutdown of a whole department or a major production unit which comprises a substantial portion of a department, employees directly affected by the shutdown will have their mill seniority for displacement of other employees under the above Section 2c-2(a) computed as follows:

One month of seniority will be granted for each month of service in the department from January 1, 1973 and added to the employee's mill seniority for displacement purposes only.

This procedure will not apply to displaced employees who must demote according to Section 2c-3 below. Employees displaced from a department on a mill seniority basis as a result of this shutdown will, however, be extended the same seniority benefit for displacement of other employees.

Such employees who are assigned to a lower paid job shall maintain the rate of the discontinued job and such rate shall be reduced by one labor grade per month for a period of six months or until such time as they reach the rate equal to the job to which they bumped or to which they have promoted, whichever comes first. Thereafter, they will be paid the regular rate of their assigned job.

This procedure does not apply to normal departmental displacements resulting from job discontinuances or reductions in force.

3. Employees displaced by the placement of senior employees in the above procedure will demote in the line of sequence on a mill seniority basis and lay-offs will be on mill seniority.

4. Employees classified in a classification which is discontinued may elect the discontinuance procedure or to remain in their department and exercise mill seniority demotion rights.

5. When a reduction in force occurs in a classification which is not in line of sequence (jobs connected by line) employees directly affected may elect the discontinuance procedure or to remain in their department and exercise mill seniority demotion rights.

6. In the event a job occupied by an employee with the least mill seniority requires a high degree of specialized knowledge and skills for which the employee to be placed is obviously unqualified, the Company and the Union will select another job for transfer opportunity. Such job would be occupied by an employee next affected by 2.c.2(b).

7. Any employee who is absent from work due to a leave of absence at the time he or she is eligible for placement under Section 2 c. 2 will be given such opportunity for placement when he or she is physically able to qualify for the job to which he or she would have been entitled, had he or she not been absent from work.

8. Should an employee become permanently disabled to the extent the Company Doctor certifies he/she is unable to perform his or her regular job, the Company and the Local Union shall, no later than six (6) months following the employee’s request, attempt to place him or her on some other job in the Union’s bargaining unit which he or she can perform to the satisfaction of supervision according to the following procedure:

a. If there is a vacant job within the bargaining unit that the disabled employee can perform, then he or she will be placed in that job.

b. In the event there is no vacant job into which the employee can be placed, the parties will meet and attempt to place the employee in a job occupied by a junior employee which the disabled employee can perform.

c. In the event the employee is permanently disabled as a result of a compensable, on-the-job injury and there is no job occupied by a junior employee into which the injured employee can be placed, then he or she may displace the most junior senior employee occupying a job he or she can perform provided this does not result in a senior employee being laid off from the mill.

d. If an employee is unable to qualify for a selected job during the medical placement process for nonmedical reasons, the Company and the Union will discuss alternatives, if any, for that employee.

e. In the event an employee is medically placed, the affected employee shall be entitled to use their full seniority for displacement purposes. Such transferred employees will assume the status of the most junior person in the job to which they are transferred for the sole purpose of promotion to the next highest job in the sequence. For any additional promotions in the job sequence, demotions or layoffs, Article VI, Section 2-c will apply.

To assist employees who are or who become disabled, the Company will, consistent with the Americans with Disabilities Act, as amended, make reasonable accommodations to enable such employees to continue performing the essential functions of their jobs. The specific accommodation offered will depend on the facts and circumstances of the employee’s job, seniority, and any limitations. If an employee needs to request a reasonable accommodation because of a disability, he or she should contact the HR Department. In the event reasonable accommodations cannot be made the affected employee will be placed in an open job if they are medically approved and can perform the duties of the job. If the employee cannot perform the duties of the open job or there are no open jobs available, the employee may displace any employee junior (using Mill Seniority) to them as long as they are medically approved and can perform the duties of the job. The medically placed employee will be considered the youngest person in their new classification and cannot promote until the permanent classified employees in the classification have promoted up to higher jobs in the sequence.

d. Transfers and Recalls:

1. All transfers, whether between jobs or departments, will be cleared through the Employment Department so that the employee's Service Record may be kept up to date. Any employee in a department may signify in advance a desire to transfer to another department. Whenever any vacancies occur in that department, the employees with advance transfer requests in the Personnel Department, shall if they can qualify be given consideration among candidates for transfer to said vacancies. In determining qualifications, previous performance on the present job, ability to handle higher jobs in the new sequence, and mill seniority shall be among those things considered.

With respect to any future vacancies that are the result of a pending retirement, the vacancy will be deemed to have occurred provided the employee has (1) announced his/her retirement and provided a minimum of a 90 day notice to the Company, (2) completed the necessary retirement paper work or (3) the pending retirement has been approved by the HR Manager. The vacancy will be deemed to have occurred on the retiring employee’s last day of work or the date the employee begins his/her final vacation period prior to their retirement date. Employees who have been on the transfer list for that department for more than 14 consecutive days prior to that date will be eligible for transfer.

2. When an employee requests or agrees to accept transfer to another job or department, he or she retains the right to transfer back to his or her former job or department within thirty-five (35) days.

a) Employees who transfer to another job sequence or department must remain in that sequence or department a minimum of twelve (12) months before they will be permitted to transfer again. If a maintenance apprenticeship program is announced during that time period, such individuals will be permitted to apply for consideration and be moved if selected.

b) Employees who elect to transfer and return to their old department during their recall period will not be permitted to file another transfer request for a period of twelve (12) months.

c) Employees who sign up on the transfer request list and then refuse the transfer when offered will not be permitted to file another transfer request for a period of six (6) months.

d) Employees on sick leave extending six (6) months will be automatically removed from the transfer request list and will not be permitted to sign up again until they return to active duty.

e) If an employee is off for less than sic (6) months and a vacancy occurs for which the individual is the senior employee on the transfer request list, then they opening will be held for an additional six (6) months after the employee is notified and accepts the opening.

3. When the Company requires transfer to another job or department, the employee will be offered transfer back to his or her original job or department according to mill seniority prior to the expiration of the periods indicated below:

(a) Three months, if the employee had been in his or her former job or department from six months to one year.

(b) Six months, if the employee had been in his or her former job or department over a year or until he or she declines transfer back to his or her former job or department within the above periods.

4. When an employee is laid off or when in lieu of a layoff an employee accepts work in another department, the employee retains rights to his or her former job if they remained in the department or to the department if forced to leave according to the following time table:

(a) With five or more years’ mill seniority, the employee retains rights to his or her former job or department for two years.

(b) With two to five years’ mill seniority, the employee retains rights to his or her former job or department for one year.

(c) With one to two years’ mill seniority, the employee retains rights to his or her former job or department for six months.

(d) With six months to one year’s mill seniority, the employee retains rights to his or her former job or department for three months.

(e) In the event an employee is displaced through multiple classifications within a sequence, the affected employee shall retain recall rights progressively through the classifications passed through. In no instance will recall rights be extended longer than those times specified above.

(f) If at any time the employee is offered and refuses transfer to his or her former job or department, the employee loses rights to that job or department and shall be so informed at the time.

(g) In addition to the recall of employees to their old departments, under this Article, it is and will continue to be the general practice of the Company to give preference in employment, according to qualifications, to former employees laid off through no fault of their own. In determining qualifications, previous performance on the job and the ability to handle higher jobs in the sequence shall be considered. Consideration will also be given to length of previous service at the mill. The Company accepts no responsibility to extend such preference to any person who has been laid off more than two years or who was only a probationary employee. In the event that the Union considers that the Company is substantially departing from the above practice, the Union shall have the right to process the question through, but not beyond, the third step of the Grievance Procedure.

5. Recall rights will be applied as follows: (1) If an employee is displaced from a job but remains in their department, recall rights will apply to the job they were displaced from. (2) If an employee is displaced from a job and their department, recall rights will apply to their former department only.”

e. Absences which do not constitute a break in seniority:

An employee's mill seniority will be considered as continuous from the day he or she begins to work and is broken when the employee is no longer in active service, except under the following conditions:

1. Layoffs and re-employment:

a. Layoffs. In case of layoffs, mill seniority shall govern.

(1) Probationary employees in the department shall be laid off first.

(2) When the average hours per employee in a department over a three-week period drops to below forty hours per week, the parties on a departmental basis will discuss whether layoffs shall be made or hours shared.

(3) In the event of a temporary shutdown which is expected to last longer than seven (7) days, the Company will as soon as possible within the first seven (7) days offer employment to the employees affected by the temporary shutdown. This employment will be on lower jobs in the sequence if they need be filled, and can be filled without training, or on such other jobs as the Company determines are available without displacing employees in other departments. If sufficient jobs are not available to place all employees affected by the temporary shutdown, the remaining employees generally will replace those employees who are most junior in mill seniority if such replacements do not require training.

In the event of a temporary shutdown which is expected to last seven (7) days or less but which continues longer, the above procedure will apply as soon as the Company determines that the shutdown will last longer than seven (7) days or at the end of the seven (7) day period, which-ever occurs sooner. The procedure in the above paragraph will also apply after an employee has lost a total of ten (10) days' time in any twelve (l2) months as a result of a series of temporary shutdowns.

Local Management and the Local Union involved may, by mutual agreement, establish certain procedures to implement this provision in individual situations.

2. Absences due to illness or accident:

When an employee is absent due to illness or accident, he or she will be reinstated with no loss of mill seniority after the employee is pronounced fit for duty by the Company doctor. In case such employee is not pronounced fit for duty and objects, the matter shall be referred to a doctor mutually agreed upon, whose decision shall be final. In case the employee accepts employment elsewhere, his or her mill seniority shall be considered broken thereby. This section shall be governed by the provisions of Article X, Section 1.

f. Absences which constitute a break in seniority:

1. If employment with the Company is terminated for any of the following causes and the employee is later rehired, the absence constitutes a break in mill seniority and the individual will be considered as a new employee:

(a) Voluntary termination for any cause.

(b) Discharged for cause.

(c) Failure to return from leave of absence within specified time, unless an extension has been obtained in writing if possible.

(d) Failure to report from layoff at the time and place specified by registered letter with return receipt mailed to the last address appearing on the employee's service record. The Union shall be sent a copy of the above letter in the same mail as the registered letter. To report from layoff, the employee must both notify the Company within three days after such letter is signed for or refused at such address that he or she will report as instructed and then in fact report as instructed. If the date for reporting back is less than three days after such letter is signed for or refused at such address, mill seniority will not be broken until the expiration of such three days. If an employee is unable to return to work on the date instructed on account of sickness or accident reported on or before such date accompanied by a doctor's certification, his or her failure to return on such date shall not constitute a break in mill seniority but the Company may proceed to fill the particular vacancy involved.

(e) Failure to return from absence due to illness or accident within seven consecutive scheduled work days after being pronounced fit for duty by the doctor. In case such employee claims he or she is not fit for duty, the matter shall be referred to a doctor mutually agreed upon, whose decision shall be final.

2. When an employee has been absent for five consecutive scheduled work days without permission, the foreman shall notify the department steward or member of the Grievance Committee, and confirm such notice in writing. If the absence continues for two consecutive days after notification to the steward or member of the Grievance Committee, or when an employee quits, the foreman shall send through a Leaving Slip, and the employee's employment will thereby be terminated.

Section 3: A master Seniority Roster of employees in each department, including employees in military service who still retain mill seniority, will be kept up to date in the Employment Department. A Stability Report will list requested transfers and transfers required by the Company, and will be furnished to the Local Union biweekly. The Seniority Roster will show the length of Mill Seniority of each employee. Department heads will consult this roster prior to making personnel changes. The Union shall be given a copy of the Master Seniority Roster.

Attachment 2

ARTICLE VII

VACATIONSThe Vacation Plan for Hourly Employees attached hereto as Appendix “E” becomes part of this Agreement and is effective as of November 1, 1995, and will remain in effect for the duration of this Agreement.

Section 1: Effective Date:

The Vacation Plan for Hourly Employees outlined hereafter is effective as of January 1, 2009, (new effective date), and will remain in effect for the duration of the current Agreement.

Section 2: Eligibility and Payment

Each hourly paid employee on the payroll December 31 of the preceding vacation year and who, during the vacation year, will on his employment anniversary date have accumulated at least one year of mill seniority will be entitled to a vacation and a vacation allowance at his or her rate at the time he or she takes vacation in accordance with the following table.

Each hourly paid employee “on the payroll as of December 31 of the preceding vacation year,” and who, during the vacation year will on their employment anniversary date have accumulated at least one year of mill seniority, will be entitled to a vacation and vacation allowance at their classified rate of pay at the time he or she takes vacation in accordance with the following table. “On the payroll” is defined as either being actively at work, collecting A&S benefits or on Worker’s Compensation as of December 31 of the preceding vacation year. If an employee is off and their A&S benefit runs out, they will receive their vacation pay once returning to work for a least one day.

Mill Seniority

Weeks of

Vacation

Hours of

Pay

1 year - less than 3 years 1 45

3 years - less than 8 years 2 90

8 years - less than 12 years 3 135

12 years - less than 18 years 4 180

18 years - less than 25 years 5 225

25 years 6 270Where an employee regularly works on two or more jobs in the 30 days prior to taking vacation, the weighted average of his or her straight time hourly rates will be used in calculating the vacation allowance.

Section 3: Vacation Year.

The vacation year shall begin on the Monday nearest to January 1 of each year and will extend for 52 consecutive weeks.

Section 4: Vacation Schedules.

a. Vacation schedules shall be made up at the beginning of the Vacation Year, at which time each eligible employee in a department by mill seniority shall will have the opportunity to specify the period in which he or she wishes to take their vacation.

1. Employees newly eligible for additional weeks of vacation during the vacation year will be required to schedule those weeks at the beginning of the vacation year after all other vacation weeks have been scheduled. These weeks must be scheduled during open available weeks under the quota either before or after their eligibility date and will be scheduled on a mill seniority basis.

b. In order to spread out the vacation period so as to cause the least disturbance to production, total weeks of eligibility in a department will be divided equally among the 52 weeks of the vacation year with maximum weekly quotas established on that basis. Any excess weeks of vacation eligibility will be accorded on a one additional man per week basis until all have been utilized. The above schedule will, in general, be followed; but minor variations may be made by the Personnel Human Resources Manager for the convenience of an individual employee or to meet production problems.

1. While the employee's preferences will be respected so far as practicable, the Company reserves the right to rearrange schedules to help meet production problems.

2. An employee eligible for more than one week’s vacation may split his or her vacation into weekly periods. He or she may select his or her first week or consecutive weeks on mill seniority basis and then after all other eligible employees have made their selections, select, on a mill seniority basis, the remaining weeks which may be split into weekly periods or combinations of weekly periods.

c. Employees within their assigned department shall select vacation weeks by one of the following methods:

1. Roster – Employees may select, by mill seniority, as many weeks as they have eligibility for as long as they are in consecutive weeks. Once all employees have selected they may select their remaining vacations without restrictions.2. Shot Gun – Employees may select all eligible weeks without restrictions by mill seniority3. Modified Shot Gun – Employees select vacation by mill seniority. All vacations except one eligible week may be selected without restrictions. The remaining weeks are selected once all employees have made their unrestricted selections.4. Double modified shot gun - Employees select vacation by mill seniority. Employees with five (5) or six (6) weeks of eligible vacation may select all weeks except for two (2) weeks without restrictions. Employees with three (3) or four (4) weeks of eligible vacation may select all weeks except for one (1) week of vacation. Employees with one (1) or two (2) weeks of eligible vacation may select all of their vacations without restrictions. Once all employees have made their selections, the remaining weeks will be selected by mill seniority without restriction.

The above procedure may be modified at any location by agreement of the parties at that location.

cd. Any employee eligible for more than two (2) weeks of vacation during a vacation year may voluntarily elect at his or her option to take pay instead of vacation for any or all of the remaining weeks. Employees making such an election must do so prior to the time the vacation schedule is prepared and before the beginning of the vacation year. Such pay will be made in the first pay of the vacation year at the employee's classified rate. All remaining weeks of vacation which are to be taken as time off will be distributed according to the provision of 4-b 4-c above. This provision of the vacation plan is not to be considered as a guarantee that work will be available or furnished by the company for the weeks not taken or for any other period.

e. When the Company grants a convenience vacation the weeks that the individual vacates will not be posted.

f. Employees who elect to retire during the year may work with their immediate supervisor to reschedule their remaining vacation weeks immediately prior to their retirement date unless doing so would place an undue hardship on the operation.”

Section 5: Employees transferring into a department.

a. Employees transferring to a department will carry their vacation selections with them into their new department provided they successfully complete their trial period.

b. An employee transferring into a department prior to the upcoming vacation year and prior to, during, or after circulation of the vacation roster for the upcoming year shall be considered an eligible employee in the receiving department. The transferring employee shall be afforded the opportunity to make his or her selection(s) on the basis of mill seniority.

Section 56: Veterans.

Any employee who entered the armed services and who returns to work within three months after an honorable discharge from the armed forces and during the vacation year will be granted vacation (with pay) as provided in Section 2 above.

Section 67: General.

a. Vacations must be taken during the vacation year specified in Section 3 above. Vacations may not be postponed or carried over to the following year.

b. The vacation week covers the established work week at each mill as outlined in ARTICLE III, Section 1, and holidays which occur during a vacation will be regarded as part of the vacation week.

c. Vacations for employees who have met the eligibility requirement established in Section 2 are non-forfeitable for any reason.

d. Each employee will be given the Vacation Allowance during the week prior to taking vacations unless a change in the vacation period has been made at the request of the employee. In this case, the vacation pay will be given after the payroll department has had one week’s notice of the change from the Personnel Manager. Employee vacation allowances, as outlined in Section 2 above, will paid on the normal weekly payroll schedule, i.e. vacation allowances will not be paid in advance. All normal payroll deductions (benefits, union dues, etc.) will be taken out of vacation allowances.

e. The beneficiary of any deceased employee shall receive the Vacation Allowance to which the deceased employee would have been entitled.

f. Any employee whose employment anniversary date comes so late in the vacation year as to make it impractical to take his or her vacation that year, shall receive the appropriate Vacation Allowance therefor. Likewise, if an employee is discharged, or terminates their employment prior to their employment anniversary date and has received vacation pay that exceeds the amount they were eligible for, the employee will be required to reimburse the company for that amount.

g. Any vacancy which occurs after the vacation schedule is established shall be posted in the department for 15 days if time permits. The vacancy shall be granted to the most senior employee who requests it who did not have an opportunity for the week in question provided they did not previously have an opportunity to select the week in question. If not filled in this manner, it will be granted to the most senior employee requesting it.

Attachment 3

Luke Mill Attendance Policy

Regular and consistent work attendance is critical to sustaining an efficient low cost operation. Employees are expected to maintain their personal health and affairs so they will be able to report to work as scheduled, understanding there may be occasions when unforeseen events take place that would cause an employee to miss scheduled work. Regardless, absences should not be excessive in nature and must be limited to maintain operations. In order to address unsatisfactory attendance issues, the following procedure shall be initiated to maintain operations at the mill. Absences related to contractual paid time off (vacation, jury duty, bereavement leave, union business, floating holidays, etc.) as well as company approved leave (union business, worker's compensation, A&S, LTD, etc.) will not be counted in this procedure.

Absences will not be classified as excused or unexcused. Points will be assessed for partial or total absences, as defined below, to determine when action shall be taken by the company. Points shall accumulate by the following standards.

1 point is assessed for a partial absence of 2 hours or less

2 points will be assessed for a partial absence greater than 2 hours but less than 4 hours

4 points will be assessed for absences greater than 4 hours

Employees who generate points totaling 22 points in a rolling 12 month period will initiate disciplinary action by the Company as follows:

Counseling: When an employee reaches 22 points the Company will require a meeting to discuss the issues causing the employee to miss work. A determination will be made as to what steps the employee must take to improve their attendance. Once an employee has reached the 22 point level, and has maintained a period of 2 consecutive months without additional absences, 2 points will be deducted for every month no points are accumulated.

Verbal Warning: In the event the employee accumulates another 4 points within the next 3 months or if the 22 point level is maintained, a verbal warning documented in writing will be issued.

Written Warning: In the event the employee accumulates another 4 points within 6 months of the previous discipline or if the 22 point level is maintained a written warning will be issued.

3-Day Suspension: In the event the employee accumulates another 4 points within 8 months of the previous discipline or if the 22 point level is maintained a 3-day suspension will be given.

Termination: In the event the employee accumulates another 4 points within 8 months of the previous discipline or if the 22 point level is maintained a termination notice will be rendered.

In the event the employee remains below the criteria referenced in each step of the discipline procedure for the duration of the discipline all discipline references will be removed and the normal criteria will be applied.

At each step of the process the attendance record of the employee will be reviewed to determine if mitigating circumstances such as substantial life events contributed to the unacceptable absences.

The Union will receive a bi-weekly update documenting those in the absentee disciplinary procedure.

Attachment 4

Drug & Alcohol Free Workplace Policy

PURPOSE

The Drug-Free Workplace Policy is designed to help facilitate a safe, drug-free workplace and workforce that promotes the safety, health and productivity of all employees.

ELIGIBILITY

This policy applies to all bargaining unit employees of Verso Corporation at the Luke Mill. State law and/or collective bargaining agreements supersede this policy.

POLICY

Violations of the Drug-Free Workplace Policy may jeopardize Verso and can create situations that are unsafe or that substantially interfere with job performance. To protect our employees, equipment, the environment, quality of our products, and the financial performance of Verso, a drug-free workplace must exist.

In compliance with the Drug-Free Workplace Act of 1988 and the requirements of the U.S. Department of Transportation and the Federal Motor Carrier Safety Administration, as applicable, this policy strictly prohibits (1) the use, manufacture, distribution, dispensation, or possession of alcohol, drugs, or controlled substances while on the job or on company property, (2) the reporting to work under the influence of alcohol, drugs or unauthorized controlled substance present in one’s system.

A violation of this policy constitutes grounds for disciplinary action up to and including discharge. Any prohibited, illegal drug or unauthorized controlled substances found on company property may be turned over to appropriate law enforcement authorities.

An employee must notify Verso, in writing, within five (5) calendar days of being convicted of a criminal drug violation. An employee convicted of such offense will be subject to appropriate disciplinary action up to and including termination and/or will be required to participate satisfactorily in Verso’s approved Employee Assistance Program (EAP).

As a condition of employment, employees are required to comply with this policy, which includes for cause searches and mandatory testing. Searches may include lockers, desks, toolboxes, and Company vehicles, as well as personal belongings (such as but not limited to backpacks, purses, gym bags and lunch packs), when not prohibited by applicable state law.

Definitions

Under the Influence means the presence of alcohol, illegal drugs or prescribed medication not consistent with the prescription. Further, blood alcohol content, as determined by the Department of Transportation, is .08 and is considered to be under the influence.

Significant damage to company property may include damage to property, equipment, machinery, rolling stock, within an operational process, or to a product. Local management will make the determination of significant damage. Considerations shall include the actual or

estimated cost of repairs, value of disruptions caused by operational upsets or product lost, and/or downtime caused or necessitated when an on-the-job incident occurs.

Hazardous or toxic substances includes any chemical found on OSHA’s list of highly hazardous chemicals or other corrosive chemicals or substances not on OSHA’s list which are used, produced, processed, transported, or stored at a site. Examples of these included, but are not limited to hydrochloric acid, sulfuric acid, turpentine, and cooking liquors. Each site involved in post incident testing must identify such chemicals and substances and test based on the events involving those substances.

Exposure or potential exposure of individuals to a hazardous or toxic substance may trigger a drug test if one or more of these specific events take place:

Hospitalization, Evacuation of employees, Evacuation of community, Activation of the facility emergency response team, Activation of the fire brigade, Violation of an EPA or state environmental protection permit, Report to the National Response Center, Report to the Department of Transportation, Activation of a fire system, Disabling of a fire system, or Other events not listed above.

A refusal to test occurs anytime when the donor: fails to appear for a test (includes reporting within a reasonable time); fails to remain in the collection site until the collection is complete; fails to provide a specimen for a required drug test; fails to provide sufficient specimen volume in the absence of a medical explanation; fails to submit to re-collection of a specimen when required to do so; fails to cooperate with the Medical Review Officer (MRO); fails to cooperate with any part of the testing process; submits a specimen that the MRO verifies as tampered with, adulterated or substituted. Any employee refusing to test will be subject to termination from employment.

Substance Abuse Testing

Substance abuse testing may be required in any of the following circumstances:

Pre-employment As a condition of employment, individuals who have received conditional offers of employment will be subject to substance testing. A refusal to test or a confirmed positive test will be grounds to disqualify the individual from further consideration for employment.

For reasonable cause An employee may be subject to for-cause substance testing if there is reasonable cause, suspicion or belief that the employee is in possession of, using or abusing alcohol, drugs or controlled substances in violation of this policy. Decisions regarding reasonable cause will be made by two members of management. Reasonable cause to believe an employee is in possession of alcohol, drugs or controlled substances in violation of this policy may also be used as grounds for a search consistent with this policy.

Post-Incident testing An employee shall be tested for the presence of illegal drugs or unauthorized controlled substances when an on-the-job incident occurs which results in:

1) Significant damage to company property;2) An on-the-job incident, which results in an injury requiring treatment by a

physician;3) Exposure or potential exposure of individuals to a hazardous or toxic substance

which leads to specific events; 4) An injury or injuries which require(s) a physician’s care; and5) Serious, near-miss events that did not, but could have resulted in serious personal

injury or significant damage to Company property, vehicles, equipment or operations or to the environment.

The key factor to determine if a drug test will take place and which employee(s) will be tested shall be guided by the following question:

Did an employee (a) do something, or (b) fail to do something that directly or indirectly caused or contributed to the incident?

Based on the investigation of the incident, if the answer to either part of this question is “yes” and the incident resulted in significant property damage, exposure or potential exposure to a hazardous or toxic substance, which resulted in one or more specific events, or an injury or injuries requiring a physician’s care, a drug test should be ordered.

As soon as possible, but no more than 32 hours after the incident, based on the decision of the facility manager or designee, the company will test for the presence of drugs and controlled substances in each employee whose performance either contributed to the incident or one who cannot be completely discounted as a contributor to the incident. A decision not to test after the incident will be based on the best information available that the employee’s/employees’ performance(s) could not have contributed to the incident. A decision not to test must be documented and included as part of the investigation of the incident.

If an employee is injured, unconscious or otherwise unable to consent to a test, the medical condition will first be treated. If the employee is treated at a hospital, the hospital will be notified of a need for a specimen and provided instructions regarding the company’s test procedures. The test will not be administered until the employee is able to understand a request to sign (and has signed) a consent form and is able to provide a specimen.

Additionally, the facts gathered by the facility management during the investigation of the incident, including the employee’s work history, will be considered in determining the appropriate course of action, which may include discipline up to and including discharge, regardless of the result of the drug test.

Post Rehabilitation Testing Under these provisions, employees who have a confirmed positive test will be subject to follow-up post rehabilitation testing for 12 months if they return to work under a one- time return-to-work option after substance rehabilitation. That testing will occur a minimum of four times in 12 months, all at the discretion of local management. Thereafter, if at any time during or after the 12-month period that employee tests positive, and that test is confirmed, the employee will be terminated. Verso reserves the right to place conditions upon any return to the premises consistent with the provisions of this Policy.

Tests will be performed for the following drugs and controlled substances. The possession or abuse of these drugs is unlawful under federal, state or local laws and regulations in the United States.

Amphetamines, e.g., Dexedrine, Speed, ice, Crank, Uppers (Includes Methamphetamines e.g. Ecstasy, Crystal meth)

Barbiturates, e.g., Seconal, Nembutal, Downers Benzodiazepines, e.g., Xanax, Valium Benzoylecgonines, e.g., Crack, Cocaine Cannabinoids, e.g., THC, Pot, Marijuana Methadone, e.g., Dolophine, Methodose Opiates, e.g., Heroin, Morphine, Codeine Phencyclidine, e.g., PCP, Angel Dust Propoxyphene

NOTE: This list may be revised to cover any drug the Substance Abuse and Mental Health Services Administration identifies and recommends for testing.

Testing for drugs and controlled substances will be conducted by collecting a specimen at the mill’s medical services facility or a local collection site and sending it, using a chain of custody process, to a company-selected, United States government approved laboratory. There, an initial screening, called an immunoassay test, will be performed. Specimens of urine, hair, or saliva may be used for testing.

Any positive results will be retested at the same laboratory using a highly accurate confirmation test procedure (gas chromatography / mass spectrometry - GC/MS).

If both the immunoassay and the GC/MS tests are positive, the company’s designated medical review officer (MRO) will contact and interview the employee regarding why a positive test resulted. If the employee has a verifiable, reasonable explanation (e.g., prescription medication), as determined by the MRO, the result will be reported as negative.

Re-collection for Negative Dilute Test Results

A specimen is verified by the MRO as negative dilute if (1) no drug was found in the specimen, and (2) the specimen is dilute (creatinine 5-20, and specific gravity 1.001-1.003). Only the MRO can determine that a specimen is negative dilute.

When a specimen is reported by the MRO as negative dilute, the collector will be ordered to perform a re-collection using hair or saliva, depending on the location preference.

The collection and any re-collection(s) test results will be interpreted as follows:

o Negative Dilute + Negative = Negative: If the collection is verified by the MRO as negative dilute and the re-collection is verified by the MRO as negative, the combined test interpretation is negative.

o Negative Dilute + Positive = Positive: if the collection is verified by the MRO as negative dilute and the re-collection is verified by the MRO as positive, the combined test interpretation is positive.

Practices

If an employee experiences a second confirmed positive test for any reason within 10 years of his/her first positive test, that employee may be terminated.

If an employee believes the initial urine tests are in error, that employee may make a written appeal to the company Medical Review Officer. If a retest is granted, it will be at the employee’s expense and will involve a reanalysis of the same specimen. If this test produces a negative result, the employee will be reimbursed for the cost of the test.

An employee has the right to explain a confirmed positive test result or to request and pay for a confirmatory retest.

Alcohol Testing

Either breath alcohol or blood alcohol testing will be used. Blood samples may be drawn in situations where it is impractical to obtain a breath alcohol test within the necessary timeframe or where blood is being collected for other purposes. Alcohol screening and breath alcohol tests will be conducted by qualified personnel using approved devices. Blood samples must be collected by qualified medical professionals.

Test Records and Retention

The results and records of drug and alcohol testing will be treated as confidential to the extent required by law. Drug and alcohol test results will be retained following Company record retention guidelines.

Employee Assistance Program

The emphasis of Verso’s policy is on attaining and maintaining a safe, healthy and productive, drug-free work environment. Attaining and maintaining a drug-free work place requires a clear, well-communicated policy, educated employees, trained supervisors, an effective Employee Assistance Program (EAP), and the desire of employees at all levels to have such an environment.

Verso recognizes the value of its employees. As such, rehabilitation is preferred. An employee who tests positive in a “for reasonable cause” situation for drugs or controlled substances will be required to participate in the EAP for assessment, counseling and the completion of a treatment action plan. A negative test must precede the employee’s return to the workplace. Also, as a condition of continued employment, the employee must sign a release form authorizing the EAP to provide information relative to participation and progress to the company, and complete the treatment action plan.

In situations involving the post-incident procedures, an employee who tests positive may be required to participate in the EAP. If the employee tests negative prior to returning to work, he/she will be asked to sign a release form authorizing the EAP to provide information relative to participation and progress to the company, and to complete the EAP action plan.