APPENDIX B

December 15, 2002

David McCall

District 1 Director

United Steelworkers of America 777 Dearborn Park Lane - J Columbus, OR 43085

RE: Training for New or Restructured Jobs

Dear Mr. McCall:

1. The parties agree that the right to adequate training is fundamental to achieving the safe and successful implementation of our agreement to re-structure jobs and the workplace.

2. Notwithstanding anything in the Agreement to the contrary, Employees who were, on December 19, 2001, incumbents in a job which has subsequently been combined into a new or restructured job shall, subject to their seniority and the number of available positions, be provided an opportunity to be placed in such new or restructured job.

3. The parties recognize that certain new and/or restructured jobs may require skills which certain newly incumbent Employees do not possess. In light of this situation, the Company agrees to provide Employees who do not have the required skills for their new or restructured jobs with reasonable training opportunities to ensure competent job performance.

4. In the event that, despite the efforts described in Paragraph 3 above, the Employee is not capable of acquiring the new job skills, then the Company shall be relieved of its obligation to provide further training and the Employee shall be expected to bid on a vacancy for which slhe is qualified.

5. The training programs necessary to carry out the provisions of this letter of

understanding will be conducted during the Employee's normal working hours.                    .

6. No Employee will be disciplined for poor job performance that results from a failure of the Company to provide training pursuant to this letter of understanding or for failure to acquire new skills when returning to a new or restructured job.

7. The parties agreed that in order to maintain competent job performance, continuing familiarization and rotation within various assignments related to new and restructured job descriptions is both required and necessary.

                                                                     Sincerely,

                                                               Is! Rodney Mott

                                                                  Rodney Mott

President and Chief Executive Officer

International Steel Group

Confirmed:

David McCall

David McCall, Director USWA District 1

December 15, 2002

David McCall

District 1 Director

United Steelworkers of America 777 Dearborn Park Lane - J Columbus, Ohio 43085

RE: Corporate Governance Issues

Dear Mr. McCall:

The following will confirm our understanding on the above captioned matter. Notwithstanding any provisions of the Basic Labor Agreement to the contrary:

1. Regarding Article Two, Section D - Successorship, in the case of the Sale of a plant or significant part thereof which:

(a) is acquired in a transaction which is not opposed by the Union, and

            (b) which transaction occurs after the Effective Date,

for the first year following the transaction only, the Sale shall be treated as a Change of Control Transaction and the provisions of paragraphs 2 and 3 of the Successorship Section shall apply.

2. Regarding Article One, Section A - Parties to the Agreement, the terms Affiliate, Company and Venture shall in no event include W.L. Ross & Co. LLC, WLR Recovery Fund L.P., WLR Recovery Fund n L.P. (collectively, Ross) or any entity that would be deemed to be an Affiliate, a part of the Company or a Venture solely by reason of Ross' ownership of an interest in, or Control of, such entity (Excluded Entity).

3. Regarding Article Two, Section E - Neutrality:

(a) The Company shall not include an Excluded Entity unless the Excluded Entity directly or indirectly gains the power to direct the management and policies of an enterprise which produces or sells the same or similar products to those currently (as of the Effective Date) or in the future sold by the Company and which is operating within the United States or Canada (a Competing Enterprise), in which case the Excluded Entity shall cause the Competing Enterprise to become a party to this Section and to achieve compliance with its provisions.

(b) The obligations of the Company with respect to an After-Acquired Venture or

                    Affiliate shall be limited to using commercially reasonable efforts to cause

said Venture or Affiliate to abide by the provisions of this Agreement. The USWA acknowledges that the Company may not be in a position to compel such Ventures or Affiliates to abide by these provisions. An After-Acquired Venture or Affiliate is a Venture or Affiliate of an entity that is acquired by the Company after the Effective Date as part of a larger transaction and over which, following said acquisition, the Company does not have, directly or indirectly, the power to direct the management and policies.

Sincerely, Is! Rodney Mott Rodney Mott President and Chief Executive Officer International Steel Group

j

Confinned:

David McCall David McCall, Director USWA District 1

December 15, 2002

David McCall

District 1 Director

United Steelworkers of America

777 Dearborn Park Lane - J Columbus, Ohio 43085

RE: Parties to the Agreement

The following will confirm our understanding on the above captioned matter.

International Steel Group, Inc. (ISG) has informed the Union that Cleveland- Cliffs, Inc. as of the date of this letter, directly owns 7.25% of the common stock of ISG.

ISG has also informed the Union that as of the date of this letter, AK-ISG Steel Coating Company is owned directly or indirectly 40% by ISG and 60% by AK Steel. Based on these facts, the parties agree that neither Cleveland- Cliffs nor AK Steel is an affiliate of ISG within the meaning of the term as it is used in Article One, Section A, Parties to the Agreement of our Basic Labor Agreement.

Sincerely, /s/ Rodney B. Mott Rodney B. Mott President and CEO

Confirmed:

David R. McCall David R. McCall USWA District 1

December 15, 2002

Mr. David McCall

District 1 Director

United Steelworkers of America

777 Dearborn Park Lane - J Columbus OH 43085

Dear Mr. McCall:

This letter will confirm our understandings, reached during the 2002 negotiations, concerning the Property Protection employees at ISG Indiana Harbor Works.

1. Except as otherwise provided by this letter, all terms and conditions contained in the Agreements between International Steel Group ("Company") and the United Steelworkers of America ("Union") shall be applicable to all Property Protection employees except superintendents, captains, lieutenants, sergeants, and confidential clerks.

2. The Union agrees that Property Protection employees are expected to abide by the rules of the Company as set forth in the Company's published rules outlining the special and unique duties and responsibilities of the Property Protection employees, as amended from time to time.

3. The Union recognizes and agrees that the special responsibilities of Property Protection employees referenced in paragraph 2, above, are of the greatest importance to the Company, and that failure to fully and diligently carry out these special responsibilities and duties, including giving entire obedience and loyalty to the Company, shall be grounds for discipline or discharge, in the sole discretion of the Company; provided that no discrimination will be exercised against any member of the Union because of such membership. In any grievance or arbitration which relates to discipline or discharged alleged to be based upon failure of an employee to fulfill his or her responsibilities to the Company or to carry our his or her duties or to give entire obedience and loyalty to the Company, the sole issue shall be whether there is sufficient evidence to show that the employee in question was guilty of the offense charged.

Sincerely, Is! Thomas E Wood Thomas E Wood Corporate Manager Labor Relations

Confirmed:

/

David McCall David McCall USWA District 1

December 15, 2002

Mr. David McCall District 1 Director

United Steelworkers of America 777 Dearborn Park Lane - J Columbus, OH 43085

Dear Mr. McCall:

This will confirm the understandings reached in conjunction with the negotiations of the Basic Labor Agreement dated December 15, 2002.

* For purposes of Article Ten, Section B. (Vacations), the application of the number of weeks of vacation allowance for this provision during the term of the agreement will be as follows:

i. In vacation years 2003 and 2004, Employees may take no more than 2 weeks of vacation, one week of which may at the request of the Employee, be taken in lieu of time off with the consent of management.

n. In vacation years 2005, 2006, and 2007, Employees may take no more than 3 weeks of vacation, two weeks of which may at the request of the Employee, be taken in pay in lieu. of time off with the consent of management.

ill. All other weeks of vacation eligibility for any year during the term of this agreement, may at the discretion of management and the agreement of the Employee, be scheduled for vacation during other times of the year or be paid to each eligible Employee in the first pay period in December of the

                    vacation year.

* Until the first schedule week after September 1, 2004, the Company may unilaterally adopt and maintain Alternative Work Schedules consisting of ten or twelve hour per day schedules as set forth in Article Five, Section c.6. (Hours of Work). These schedules will be considered as worked pursuant to an Alternative Work Schedule for purposes of Article Five, Section D. (Overtime). If a pattern of deviation from the adopted Alternative Work Schedules is established without the agreement of the area Grievance Committeeman or the affected Employee(s), the provisions of Article Five, Section D. (Overtime) will apply until the normal pattern is reestablished. Effective with the first schedule week following September 1, 2004, the requirements for approval and revocation of approval contained in Article Five, Section C.6. shall be in effect.

* Employees working an Alternative Work Schedule as allowed under Article Five, Section D, will be treated as follows under the below listed provisions:

i. For purposes of Article Five, Section D. (Overtime), when an Employee works beyond scheduled hours under the Alternative Work Schedule such Employee will be eligible for overtime for such hours worked beyond the Alternative Work Schedule.

ii. For purposes of Article Eight, Sections A. (Employment Security) and B. (Supplemental Unemployment Benefits), Employees working pursuant to a normal pattern Alternative Work Schedule will be considered as being provided the opportunities required by these sections.

iii. For purposes of Article Ten, Section A. (Holidays), an Employee scheduled off on hislher normal pattern Alternative Work Schedule will be paid for an unworked Holiday at the hours he/she would have been scheduled under the Alternative Work Schedule.

iv. For purposes of Article Ten, Section C. (Bereavement), Employees absent from work pursuant to such provision will be paid the number of hours they would have been scheduled under the Alternative Work Schedule for qualifying days.

* Where the Company establishes a steady shift schedule on a job where Employees are also scheduled on rotating shifts, assignment to the steady shift schedule shall be by seniority wherever ability to perform the work is equal, with the senior Employees who desire to work the schedule given preference to the assignment in accordance with understandings reached between Plant Management and the Local Union Committeeman.

* The Training Coordinator established in Article Seven Section A will perform activities similar to those below on behalf of the Company and Union. It is understood that this position will work on other matters of mutual interest of the parties involving training and education of the workforce.

i. Coordinates, develops and plans training activities undertaken by the

parties. ii. Coordinates and facilitates training sessions for Employees. iii. Maintains data base records of training accomplished and monitors when

                    training needs to be renewed on all matters including, safety, civil rights,

license renewal, etc.

iv. Assists in training needs involved in capital expenditures.

v. Administers tests to Employees. Responsible for tracking training records. vi. Conducts training sessions on routine topics involved in routine plant

programs.

vii. Participates in pre-training activities necessary to meet plant needs.

viii. Works with the Human Resources department on training programs

                    throughout the plant.

ix. Works with community educational resources to assist the current and

                    potential future workforce.

x. Fulfills the roll of coordinating ICD activities on behalf of the plant as

directed by the Training Committee.

* Employees required to remain on the job until relieved shall be allowed to relieve each other ('buddy relief') in accordance with procedures established between the management and union, up to 30 minutes prior to the scheduled end of the turn provided the Employee has worked their scheduled total hours.

* The Company will provide reasonable and appropriate arrangements for lunch opportunity and other personal needs for Employees during the course of a shift.

* At the request of the Union and where practicable the local parties may agree to provide that, identified Union representatives at the Plants will be scheduled on a steady day turn basis, to an available job at the applicable rate, in accordance with efficient operations of the plant.

* Where contribution or eligibility for benefits is based upon hours worked, hours spent on Union Business, whether compensated by the Company or by the Union,

shall be considered hours worked for the purpose of the benefits contribution or eligibility.

* There will be one (1) position for Training/Safety at the Warren, Hennepin, and Riverdale Plants.

* The effective date of Article Seven Section A will be 1/1/04.

* In the discussions concerning the use of Funds contributed to the Institute for Career Development, the parties agree, that it may be appropriate to allocate funds to certain programs that will be established by the parties to address training requirements and programs established in the Basic Labor Agreement. The Local Joint Committee may recommend the use of such funds for such programs. Should the Local Joint Committee be unable to determine which programs may be applicable for the use of such funds, the parties will submit the issue to the Co-Chairs of the Negotiating Committee to resolve such dispute consistent with the intent of the parties and by mutual agreement.

* In the event of a "Need" for layoff under the provisions of Article Eight Section A, the local parties, by mutual agreement, may agree to utilize reduced work schedules of 32 hours as part of a layoff minimization plan.

* The Parties agree to maintain the IJOP provisions of the LSE Agreement as they may apply to the Cleveland Plant.

* The parties agree to maintain the understanding with respect to the recall of former I1V employees to the ISG facilities.

* The parties agree that the cost of administration for the Steelworker Health and Welfare Fund under the Participation Agreement will be cost competitive with other 3rd party Administrators for similar services.

                                                                       Sincerely,

Is! Thomas F. Wood

                                                                 Thomas F. Wood

Corporate Manager Labor Relations

Confirmed:

David McCall David McCall USWA District 1

December 15, 2002

Mr. David McCall

District 1 Director

United Steelworkers of America

777 Dearborn Park Lane - J Columbus, OH 43085

Dear Mr. McCall:

This will confirm the understandings reached in conjunction with the negotiations of the Basic Labor Agreement dated December 15, 2002. Except as specifically addressed in this Appendix, all terms and conditions of employment set forth in the collective bargaining agreement between International Steel Group ("ISG") and the United Steelworkers of America, AFL-CIOCLC ("USWA") shall apply to the employees of the Cleveland Works Railway ("CWR") who work within the crafts and classes as certified by the National Mediation Board.

1. Term of the Agreement: Solely as it relates to the employees of the CWR, the ISGI USWA CBA shall become amendable upon the. expiration date of the ISG/USWA CBA ("Moratorium Date"), subject to the following:

a. Any and all changes to the ISG/USWA CBA shall be implemented with respect to the employees of the CWR, except as limited herein or except as the parties may otherwise agree.

b. Any change in the date of termination of the ISG/USWA CBA shall change the

Moratorium Date to that same date.

2. Union Security: Article '!\vo, Section B, Lines 3-6 of the ISG/USWA CBA shall be modified to provide that it shall be a condition of continued employment that all employees of the CWR shall become members of the USWA on the 60th day following the effective date of the ISG/USWA CBA.

3. Railroad Retirement Act Issues: The CWR shall take all acts and make all contributions required by the Railroad Retirement Act and that the rights of CWR employees shall be preserved to the fullest extent allowed by such act. It is understood that, to the fullest extent possible, CWR employees shall receive credit for all former service and that ISG shall make the same level of contributions to the retirement system as formally made.

4. Steelworker Pension Trust Contributions: ISG shall make contributions to the Steelworkers Pension Trust ("SPT") on behalf of employees of the Covered Railroads