BAYOU STEEL CORP
AMENDED DIRECTORS STOCK OPTION PLAN
<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>4
<FILENAME>d60518_ex10-4.htm
<DESCRIPTION>AMENDED DIRECTORS STOCK OPTION PLAN
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     <!-- Control Number: 04-60518                                                         -->
     <!-- Rev Number:     1.0                                                              -->
     <!-- Client Name:    Bayou Steel Corp                                                 -->
     <!-- Project Name:   Form Type: 10-Q                                                  -->
     <!-- Firm Name:      Bayou Steel Corporation                                          -->
     <TITLE>EX-10.4</TITLE>
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<P ALIGN="RIGHT"><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2><I>Exhibit 10.4</I> </FONT></P>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>AMENDED AND RESTATED<BR>BAYOU
STEEL CORPORATION<BR>2004 DIRECTORS STOCK OPTION PLAN</FONT></H1>

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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.</FONT></TD>
<TD WIDTH=4%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=93%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Purpose.
The purpose of the 2004 Directors Stock Option Plan (the &#147;Plan&#148;) of Bayou Steel
Corporation (&#147;Bayou Steel&#148;) is to increase stockholder value and to advance the
interests of Bayou Steel and its subsidiaries (collectively, the &#147;Company&#148;) by
furnishing stock options designed to attract, retain, reward and motivate directors of
the Company and to strengthen the mutuality of interests between such directors and Bayou
Steel&#146;s stockholders. Stock options consist of options to purchase shares of the
common stock, $.01 par value per share, of Bayou Steel (the &#147;Common Stock&#148;), on
terms determined under the Plan (&#147;Stock Options&#148;). As used in the Plan, the
term &#147;subsidiary&#148; means any corporation, limited liability company or other
entity, of which Bayou Steel owns (directly or indirectly) within the meaning of Section
424(f) of the Internal Revenue Code of 1986, as amended (the &#147;Code&#148;), 50% or
more of the total combined voting power of all classes of stock, membership interests or
other equity interests issued thereby. The Plan shall be effective upon such time as the
Board of Directors of Bayou Steel (the &#147;Board&#148;) shall approve the Plan.  </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2. </FONT></TD>
<TD WIDTH=4%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=93%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Administration. </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>a.  </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=82%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Composition.
 The Plan  shall be  administered  by the Board  or,  if  appointed  by the  Board,  a
                     committee of the Board (the  &#147;Committee&#148;).  If any of the
 Company&#146;s  directors who are eligible to                      participate  pursuant
to Section 3 of the Plan is an &#147;insider&#148;  with  respect to the Company  under
                     Section 16 of the  Securities  Exchange Act of 1934 and such a
Committee is appointed to administer                      the Plan,  the  Committee
 shall  consist of not fewer than two members of the Board,  each of whom
                     shall qualify as a &#147;non-employee  director&#148;  under Rule
16b-3 under the Securities  Exchange Act of                      1934.  During any period
of time when the Plan is administered by the Board,  all references to the
                     Committee shall be deemed to refer to the Board. </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>b.  </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=82%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Authority.
 The  Committee  shall have plenary  authority to award Stock Options under the Plan, to
                     interpret the Plan, to establish any rules or  regulations  relating
to the Plan that it determines                      to be  appropriate,  to enter into
 agreements  with or provide  notices to  participants as to the
                     terms of the Stock  Options (the &#147;Stock  Option  Agreements&#148;)
 and to make any other  determination                      that it believes  necessary or
advisable for the proper  administration  of the Plan. Its decisions
                     in matters relating to the Plan shall be final and conclusive on the
Company and participants. </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3. </FONT></TD>
<TD WIDTH=4%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=93%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Eligible
 Participants.  Directors of the Company who are not also  employees of the Company
 shall            become  eligible to receive Stock Options under the Plan when
designated by the Committee.  Participants  may            be designated individually or
by groups or categories, as the Committee deems appropriate. </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4. </FONT></TD>
<TD WIDTH=4%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=93%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Shares
Subject to the Plan. </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>a.  </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=82%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Number
of Shares.  Subject to adjustment  as provided in Section 6.5, the maximum  number of
shares                      of Common Stock that may be delivered to participants  and
their permitted  transferrees  under the                      Plan shall be 42,000
 shares.  Each eligible  director shall be granted Stock Options to acquire up
                     to 6,000  shares  under the Plan,  except that the  Chairman  of the
Board  shall be granted  Stock                      Options to acquire up to 12,000
shares. </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>b.  </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=82%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Share
 Counting.  To the  extent  any  shares of Common  Stock  covered  by a Stock  Option are
not                      delivered  to a  participant  or  permitted  transferee  because
the Stock  Option is  forfeited or                      canceled,  such shares shall not
be deemed to have been delivered for purposes of  determining  the
                     maximum  number of shares of Common  Stock  available  for delivery
 under this Plan.  In the event                      that shares of Common Stock are
 reacquired by the Company  pursuant to rights  reserved upon grant
                     of the Stock  Option,  such  forfeited  and  reacquired  Shares may
again be issued under the Plan;                      provided,  however,  that Shares
 reacquired by the Company for  consideration  reflecting the then
                     Fair Market Value of such Shares shall not be available for
reissuance  hereunder.  If the exercise                      price of any Stock Option
 granted under the Plan or the applicable  withholding  tax obligation is
                     satisfied  by  tendering  shares of Common  Stock to the Company (by
either  actual  delivery or by                      attestation),  only the number of
shares of Common  Stock  issued net of the shares of Common Stock
                     tendered  shall be deemed  delivered for purposes of  determining
 the maximum  number of shares of                      Common Stock available for
delivery under the Plan. </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>c.  </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=82%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Type
of Common Stock.  Common Stock issued under the Plan may be authorized and unissued
 shares or                      issued shares held as treasury shares. </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.</FONT></TD>
<TD WIDTH=4%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=93%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Terms
of Stock Options. A Stock Option is a right to purchase shares of Common Stock from Bayou
Steel. Stock options granted under the Plan shall be non-qualified Stock Options and
shall not be treated as Incentive Stock Options. Each Stock Option granted by the
Committee under this Plan shall be subject to the following terms and conditions:  </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>a.  </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=82%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Price.
 The exercise  price per share shall be determined by the  Committee,  subject to
adjustment                      under Section 6.5;  provided that in no event shall the
exercise price be less than the Fair Market                      Value of a share of
Common Stock on the date of grant,  unless otherwise expressly permitted by the
                     Board. </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>b.  </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=82%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Number.
 The number of shares of Common  Stock  subject to the option  shall be  determined  by
the                      Committee, subject to adjustment as provided in Section 6.5. </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>c.  </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=82%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Duration
 and  Time for  Exercise.  The  term of each  Stock  Option  shall  be  determined  by
the                      Committee,  but may not exceed ten years.  Each Stock Option
shall become  exercisable at such time                      or times during its term as
shall be determined by the  Committee.  Notwithstanding  the foregoing,
                     the Committee may accelerate the  exercisability of any Stock Option
at any time in its discretion,                      in addition to the automatic
acceleration of Stock Options under Section 6.10. </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>d.  </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=82%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Repurchase.
 Upon approval of the Committee,  the Company may repurchase a previously granted Stock
                     Option from a participant by mutual  agreement  before such option
has been exercised by payment to                      the  participant  of the  amount
 per share by which:  (i) the Fair  Market  Value (as  defined  in
                     Section  6.11) of the Common Stock  subject to the Stock  Option on
the  business  day  immediately                      preceding the date of purchase
exceeds (ii) the exercise price. </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>e.  </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=82%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Manner
of  Exercise.  A Stock  Option  may be  exercised,  in whole or in part,  by giving
 written                      notice to the  Company,  specifying  the  number of shares
 of Common  Stock to be  purchased.  The                      exercise  notice shall be
accompanied by the full purchase price for such shares.  The option price
                     shall be  payable  in United  States  dollars  and may be paid (a)
in cash;  (b) by  check;  (c) by                      delivery of shares of Common Stock
which, unless otherwise determined by the Committee,  shall have
                     been held by the  optionee  for at least six  months,  and which
 shares  shall be valued  for this                      purpose at the Fair Market  Value
on the  business day  immediately  preceding  the date such Stock
                     Option is exercised;  (d) by delivery of irrevocable  written
 instructions to a broker approved by                      the Company  (with a copy to
the  Company)  to  immediately  sell a portion of the shares  issuable
                     under the Stock Option and to deliver  promptly to the Company the
amount of sale proceeds (or loan                      proceeds  if the broker  lends
funds to the  participant  for  delivery to the  Company) to pay the
                     exercise  price;  provided,  however,  that no  exercise  shall be
deemed to occur  until such sale                      occurs;  or (e) in such other
manner as may be authorized  from time to time by the  Committee.  In
                     the case of delivery of an  uncertified  check,  no shares shall be
issued until the check has been                      paid in full.  Prior to the
 issuance  of shares  of  Common  Stock  upon the  exercise  of a Stock
                     Option, a participant shall have no rights as a stockholder. </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>f.  </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=82%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Initial
Public Offering. Each participant shall, in the participant&#146;s Stock Option
Agreement, acknowledge and agree that he or she is obligated to cooperate with
the Company and the underwriters in connection with any public offering of the
Company&#146;s securities and any transactions relating to a public offering,
and shall execute and deliver any agreements and documents, including without
limitation, a lock-up agreement, that may be requested by the Company or the
underwriters; <I>provided</I>, however, that the participant shall only be required to
execute such a lock-up agreement if other similarly situated directors of the
Company are also required to execute such an agreement. The participant&#146;s
obligations under this Section 5.6 shall apply to any shares of Common Stock
issued under the participant&#146;s Stock Option Agreement as well as to any and
all other securities of the Company or its successor for which Common Stock may
be exchanged or into which Common Stock may be converted. </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>6. </FONT></TD>
<TD WIDTH=4%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=93%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>General. </FONT></TD>
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<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>a.  </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=82%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Duration.
 Subject to Section 6.9, the Plan shall remain in effect until all Stock Options  granted
                     under the Plan have either been  satisfied  by the  issuance of
shares of Common Stock or otherwise                      been terminated under the terms
of the Plan and all restrictions  imposed on shares of Common Stock
                     in connection with their issuance under the Plan have lapsed. </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>b.  </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=82%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Transferability.
 No Stock Options  granted  hereunder  may be  transferred,  pledged,  assigned or
                     otherwise  encumbered  by a  participant  except:  (a) by  will;
 (b) by the  laws of  descent  and                      distribution;  (c)  pursuant  to
a domestic  relations  order,  as  defined in the Code;  or (d) if
                     permitted by the Committee and so provided in the Stock Option
 Agreement or an amendment  thereto,                      (i) to Immediate  Family
Members,  (ii) to a partnership in which the participant  and/or Immediate
                     Family Members,  or entities in which the participant  and/or
Immediate Family Members are the sole                      owners,  members  or
 beneficiaries,  as  appropriate,  are the sole  partners,  (iii) to a limited
                     liability  company in which the participant  and/or Immediate Family
Members,  or entities in which                      the participant and/or Immediate
Family Members are the sole owners,  members or beneficiaries,  as
                     appropriate,  are the sole  members,  or (iv) to a trust for the
sole  benefit  of the  participant                      and/or  Immediate  Family
 Members.  &#147;Immediate  Family Members&#148; shall be defined as the spouse and
                     natural or adopted children or  grandchildren  of the participant
and their spouses.  Any attempted                      assignment,  transfer,  pledge,
 hypothecation  or other  disposition of Stock Options,  or levy of
                     attachment or similar process upon Stock Options not specifically
 permitted herein,  shall be null                      and void and without effect. </FONT></TD>
</TR>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>c.  </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=82%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Effect
 of  Termination  of  Service  or  Death.  In the event  that a  participant  ceases to
be a                      director of the Company for any reason,  including  death or
 disability,  any Stock Options may be                      exercised,  shall vest or
shall  expire at such times as may be  determined  by the  Committee  and
                     provided in the Stock Option Agreement. </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>d.  </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=82%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Additional
 Conditions.  Anything  in this Plan to the  contrary  notwithstanding:  (a) the Company
                     may, if it shall  determine it necessary or desirable  for any
reason,  at the time of award of any                      Stock Option,  require the
recipient of the Stock Option,  as a condition to the receipt thereof or
                     to the  receipt of shares of Common  Stock  issued  pursuant
 thereto,  to deliver to the Company a                      written  representation  of
present  intention  to acquire the Stock Option or the shares of Common
                     Stock issued pursuant thereto for his own account for investment and
not for distribution;  and (b)                      if at any  time  the  Company
 further  determines,  in its  sole  discretion,  that  the  listing,
                     registration  or  qualification  (or any updating of any such
 document) of any Stock Option or the                      shares of Common Stock
issuable  pursuant thereto is necessary on any securities  exchange or under
                     any  federal  or  state  securities  or blue  sky  law,  or that the
 consent  or  approval  of any                      governmental  regulatory  body is
necessary or desirable as a condition of, or in  connection  with
                     the award of any Stock  Option,  the issuance of shares of Common
Stock  pursuant  thereto,  or the                      removal of any restrictions
 imposed on such shares, such Stock Option shall not be awarded or such
                     shares of Common Stock shall not be issued or such restrictions
 shall not be removed,  as the case                      may be, in whole or in part,
unless such listing, registration,  qualification, consent or approval
                     shall have been effected or obtained free of any conditions not
acceptable to the Company. </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>e.  </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=82%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Adjustment.
 In the event of any  recapitalization,  stock  dividend,  stock split,  combination of
                     shares or other  similar  change in the Common  Stock,  the  number
of shares of Common  Stock then                      subject to the Plan,  including
shares subject to outstanding Stock Options, and all limitations on
                     the number of shares that may be issued  hereunder shall be adjusted
in proportion to the change in                      outstanding  shares of Common Stock.
 In the event of any such  adjustments,  the purchase price of                      any
option and the  performance  objectives of any Stock  Option,  shall also be adjusted as
and to                      the extent  appropriate,  in the reasonable  discretion of
the Committee,  to provide  participants                      with the same  relative
 rights before and after such  adjustment.  No  substitution  or adjustment
                     shall  require  the Company to issue a  fractional  share  under the
Plan and the  substitution  or                      adjustment shall be limited by
deleting any fractional share.  </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>f.  </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=82%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Withholding. </FONT></TD>
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<TD WIDTH=79%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>i.
             If  applicable,  the Company  shall have the right to withhold  from any
 payments  made or stock issued                                under the Plan or to
collect as a condition  of payment,  issuance or vesting,  any taxes
                               required  by law to be  withheld.  At any time that a
 participant  is required to pay to                                the  Company  an
amount  required  to be  withheld  under  applicable  income tax laws in
                               connection with the exercise of an option,  the
participant  may,  subject to disapproval                                by the
 Committee,  satisfy  this  obligation  in  whole  or in  part  by  electing  (the
                               &#147;Election&#148;)  to deliver  currently  owned
 shares of Common  Stock or to have the Company                                withhold
 shares  of  Common  Stock,  in each case  having a value  equal to the  minimum
                               statutory  amount  required to be withheld under federal,
 state and local law. The value                                of the shares to be
 delivered  or withheld  shall be based on the Fair  Market  Value of
                               the Common  Stock on the date that the amount of tax to be
withheld  shall be  determined                                (&#147;Tax Date&#148;).</FONT></TD>
</TR>
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<TD WIDTH=79%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ii.
                           Each  Election must be made prior to the Tax Date.  The
 Committee may  disapprove of any                                Election,  may suspend
or  terminate  the right to make  Elections,  or may provide  with
                               respect  to any Stock  Option  that the right to make
 Elections  shall not apply to such                                Stock Option.</FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>g.  </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=82%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>No
Continued  Service.  No participant  under the Plan shall have any right,  because of his
or her                      participation,  to continue in the service of the Company for
any period of time or to any right to                      continue his or her present or
any other rate of compensation. </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>h.  </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=82%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Deferral
 Permitted.  The issuance of shares of Common Stock in  connection  with the exercise of
a                      Stock  Option may be deferred at the option of the  participant
 if  permitted  in the Stock Option                      Agreement. </FONT></TD>
</TR>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>i.  </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=82%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Amendments
 to or  Termination  of the Plan.  The Board may amend or  discontinue  this Plan at any
                     time; provided,  however, that no such amendment may materially
impair,  without the consent of the                      recipient, a Stock Option
previously granted. </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>j.  </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=82%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Change
of Control. </FONT></TD>
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<TD WIDTH=79%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>i.
                            &#147;Change of Control&#148; means the occurrence of one or
more of the following events:</FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.  </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=64%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>the
direct or  indirect  sale,  lease,  exchange  or other  transfer of all or
                                          substantially  all of the  assets  of Bayou
 Steel to any  Person or entity or                                           group of
Persons or  entities  acting in  concert  as a  partnership  or other
                                          group (a &#147;Group of Persons&#148;) other
than an Affiliate of Bayou Steel; </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.  </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=64%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>the
 consummation of any  consolidation  or merger of Bayou Steel with or into
                                          another  corporation or other entity with the
effect that the  stockholders of                                           Bayou  Steel
as of the date of  adoption  of the Plan by the  Board  hold less
                                          than 51% of the combined voting power of the
outstanding  voting securities of                                           the
 surviving  entity  of such  merger  or the  entity  resulting  from  such
                                          consolidation  ordinarily  having  the  right
 to  vote  in  the  election  of                                           directors
  (apart  from  rights   accruing   under   special   circumstances)
                                          immediately after such merger or consolidation; </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.  </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=64%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>the
 stockholders  of Bayou Steel shall  approve any plan or proposal  for the
                                          liquidation or dissolution of Bayou Steel; and </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.  </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=64%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>a
Person or Group of Persons (other than Bayou Steel,  its management of Bayou
                                          Steel,  or any of their  respective  Affiliates
 (determined  prior to  giving                                           effect to the
 acquisitions  described in this  paragraph  (iv))  shall,  as a
                                          result  of a tender  or  exchange  offer,  open
 market  purchases,  privately                                           negotiated
 purchases  or  otherwise,  have  become  the  direct  or  indirect
                                          beneficial  owner (within the meaning of Rule
13d-3 under the Exchange Act) of                                           securities  of
Bayou  Steel  representing  a majority of the  combined  voting
                                          power of the then outstanding  securities of
Bayou Steel ordinarily (and apart                                           from rights
accruing under special  circumstances) having the right to vote in
                                          the election of directors. </FONT></TD>
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<TD WIDTH=79%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ii.
                           Unless  otherwise  provided in the Stock Option  Agreement
with the  participant,  in the                                event of a  Change  of
 Control,  all  Stock  Options  granted  to such  participant  and
                               outstanding  at the time of the Change of Control shall
 immediately  prior to the Change                                of Control
 automatically  become  fully  vested and  exercisable,  all  restrictions  or
                               limitations  on  any  Stock  Options  shall  automatically
 lapse  and,  all  performance                                criteria and other
 conditions  relating to the issuance of Stock Options shall be deemed
                               to be achieved or waived by Bayou Steel  without the
 necessity  of action by any person.                                As used in the
 immediately  preceding  sentence,  `immediately  prior&#146; to the  Change of
                               Control  shall  mean  sufficiently  in  advance  of the
 Change of  Control to permit the                                optionee to take all
steps  reasonably  necessary (i) to exercise his or her Stock Option
                               fully and (ii) to deal with the shares  purchased  or
acquired  under any Stock Option so                                that all  types of
shares  may be  treated  in the same  manner  in  connection  with the
                               Change of Control as the shares of Common Stock of other
stockholders.</FONT></TD>
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<TD WIDTH=79%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>iii.
                          In addition to any acceleration of vesting  described in
Section 6.10.B hereof,  no later                                than 30 days  after  the
 approval  by the  Board  of a  Change  of  Control  of the type
                               described  in  subsections  A(i),  A(ii) or A(iii) of this
Section 6.10 and no later than                                30 days after a Change of
 Control of the type  described  in  subsections  A(iv) of this
                               Section  6.10,  the  Committee,  acting in its sole
 discretion  without  the  consent or                                approval of any
 participant  (and  notwithstanding  any removal or attempted  removal of
                               some or all of the  members  thereof  as  directors  or
 Committee  members),  may act to                                effect one or more of
the  alternatives  listed  below,  which may vary among  individual
                               participants,  which may apply only to vested and
exercisable  outstanding  Stock Options                                or to all or a
portion of all outstanding  Stock Options,  and which may vary among Stock
                               Options held by various participants or by any individual
 participant.  The actions that                                the Committee may take are
as follows:</FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.  </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=64%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>require
that all or a portion of outstanding  Stock Options be exercised on or
                                          before a specified  date (before or after such
Change of Control) fixed by the                                           Committee,
 after which specified date all  unexercised  Stock Options and all
                                          rights of participants thereunder shall
terminate, </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.  </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=64%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>make
such  equitable  adjustments  to Stock  Options then  outstanding  as the
                                          Committee  deems  appropriate  to reflect  such
 Change of Control  (provided,                                           however,  that
the  Committee  may  determine in its sole  discretion  that no
                                          adjustment is necessary), </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.  </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=64%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>in
the event of a Change of Control of the type  described  in Section  6.10A.
                                          (i) or (ii) where  there is a successor  entity
to Bayou  Steel (a  &#147;Corporate                                           Transaction&#148;)
 provide  that  such  Stock  Option  shall  be  assumed  by  the
                                          successor  entity (or parent thereof) or be
replaced with a comparable  option                                           to purchase
 shares of the capital  stock of the  successor  entity (or parent
                                          thereof).  The  determination of comparability
 shall be made by the Committee                                           and its
 determination  shall be final,  binding  and  conclusive.  Each Stock
                                          Option that is assumed in  connection  with a
Corporate  Transaction  shall be                                           appropriately
 adjusted,  immediately after the Corporate Transaction to apply
                                          to the number and class of  securities  that
 would have been  issuable  to an                                           optionee upon
 consummation of the  transaction  that results in the Corporate
                                          Transaction  had a  Stock  Option  been
 exercised  immediately  prior  to the
                                          Corporate  Transaction.  Appropriate
 adjustments  to reflect  such  Corporate
                                          Transaction  shall also be made to (i) the
 exercise  price  payable per share                                           under each
 outstanding  Stock Option,  provided the aggregate  exercise price
                                          payable for such  securities  shall  remain the
same (ii) the  maximum  number                                           and/or class of
securities  available for issuance over the remaining  term of
                                          the Plan and (iii) the maximum  and/or class of
 securities  for which any one                                           person may be
granted Stock Options under the Plan per calendar year. </FONT></TD>
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<TD WIDTH=21%>&nbsp;</TD>
<TD WIDTH=79%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>iv.
                           For purposes of this Section 6.10,</FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.  </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=64%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;Affiliate&#148; shall
mean, with respect to any specific Person,  any other Person
                                          or group  directly or indirectly  controlling
or controlled by or under direct                                           or indirect
 common  control with such  specific  Person.  For the purposes of
                                          this  definition,  &#147;control,&#148;  as
used with  respect to any Person or group of
                                          Persons, means the possession,  directly or
indirectly, of the power to direct                                           or cause the
direction of the  management  or policies of such Person  whether
                                          through the ownership of voting securities,  or
by agreement or otherwise; and                                           the terms  &#147;controlling&#148;  and
 &#147;controlled&#148;  have meanings  correlative to the
                                          foregoing. </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.  </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=64%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;Person&#148;  shall
 mean  any  individual,   corporation,   partnership,  limited
                                          liability company,  joint venture,
 association,  joint-stock company,  trust,
                                          unincorporated   organization   or  government
 or  any  agency  or  political                                           subdivision
thereof. </FONT></TD>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>k.  </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=82%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Definition
of Fair Market Value.  Whenever  &#147;Fair Market Value&#148; of Common Stock shall be
determined                      for purposes of this Plan, it shall be determined as
follows:  (i) if the Common Stock is listed on                      an established stock
exchange or any automated quotation system that provides sale quotations,  the
                     closing  sale price for a share of the Common  Stock on such
 exchange or  quotation  system on the                      applicable  date,  or if no
sale of the Common  Stock shall have been made on that day, on the next
                     preceding  day on which  there was a sale of the  Common  Stock;
 (ii) if the  Common  Stock is not                      listed on any exchange or
quotation system, but bid and asked prices are quoted and published,  the
                     mean between the quoted bid and asked prices on the  applicable
 date,  and if bid and asked prices                      are not available on such day,
on the next preceding day on which such prices were  available;  and
                     (iii) if the Common  Stock is not  regularly  quoted,  the fair
 market  value of a share of Common                      Stock on the applicable date as
established by the Committee in good faith. </FONT></TD>
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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
Plan is executed effective as of the 1st day of April, 2004.  </FONT></P>

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    <td width=10%><font face="Times New Roman, Times, Serif" size=2></font></td>
    <td width=50%><font face="Times New Roman, Times, Serif" size=2>BAYOU STEEL
      CORPORATION<br>
      <br>
      <br>
      By: /s/ Richard J. Gonzalez<br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;</font></td>
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    <td width=40%>&nbsp;</td>
    <td width=10%>&nbsp;</td>
    <td width=50% align="center"><font face="Times New Roman, Times, Serif" size=2>Richard
      J. Gonzalez<br>
      Vice President and Chief Financial Officer,<br>
      Secretary and Treasurer</font></td>
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