<PAGE>   1
                                                                   EXHIBIT 10.38


                               ROUGE STEEL COMPANY
                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

         WHEREAS, ROUGE STEEL COMPANY, a Delaware corporation (the "Company"),
adopted the Rouge Steel Company Supplemental Executive Retirement Plan effective
January 1, 1997; and

         WHEREAS, the Company desires to amend and restate the Rouge Steel
Company Supplemental Executive Retirement Plan effective December 2, 1999.

         NOW, THEREFORE, the Company hereby amends and restates the Rouge Steel
Company Supplemental Executive Retirement Plan (the "Plan"), effective December
2, 1999, to read as follows:

                                    ARTICLE I

                                  PLAN PURPOSE

         The purpose of this Plan is to attract and retain key management
employees by supplementing retirement benefit payments to those key management
employees of the Company designated in writing from time to time by the
Compensation Committee of the Board of Directors of the Company (the
"Participants").

                                   ARTICLE II
                               BENEFIT DESCRIPTION

         A Participant or the Participant's surviving spouse shall be entitled
to benefits under this Plan only when the Participant (i) has accrued at least
five (5) continuous Years of Service after his or her designation as a
Participant in this Plan and (ii) is entitled to normal retirement, regular
early retirement, special early retirement, total and permanent disability
retirement benefits, or in the event of termination of employment after a Change
in Control, deferred vested benefits pursuant to the Rouge Steel Company
Salaried Employee Retirement Plan (the "Retirement Plan"); provided,

<PAGE>   2



however, in the event of a Change in Control, as defined herein, the five (5)
continuous Years of Service requirement for entitlement to benefits under the
Plan shall be waived; and, provided, further, the Compensation Committee of the
Board of Directors of the Company ("Compensation Committee") may, in its sole
discretion by written resolution, waive or reduce the five (5) continuous Years
of Service requirement for entitlement to benefits under the Plan. Subject to
Article VII of this Plan, and Appendix A hereto if applicable, a Participant
entitled to benefits under this Plan shall be entitled to a monthly benefit,
upon the Participant's retirement under the Retirement Plan, payable pursuant to
Article IV of this Plan, equal to 1.9% of the Participant's "Final Average
Monthly Compensation" multiplied by the number of his or her Years of Service
(but not in excess of thirty-five (35)).

         For purposes of this Plan, "Final Average Monthly Compensation" means
the quotient of the average of the Participant's highest five (5) annual
incentive compensation payments (and which may be zero for a year) attributable
to calendar years (which need not be consecutive) under the Rouge Steel Company
Incentive Compensation Plan or the Rouge Steel Company Margin Improvement
Incentive Plan that occur during the ten (10) full calendar years prior to
termination of employment, divided by twelve (12). Notwithstanding the
foregoing, even if a Participant has not been eligible for annual incentive
compensation payments for five (5) years, Final Average Monthly Compensation
shall still be computed as if a Participant had been eligible for annual
incentive compensation for five (5) years, but had received no such compensation
for such additional years.

          For purposes of this Plan, "Years of Service" means years of credited
service, as defined in the Retirement Plan; provided, solely for purposes of
computing benefits under the formula set forth herein (and not eligibility or
entitlement), Years of Service for any Participant who is a Group I Employee or
Group II Employee as defined in the Retirement Plan shall also include years of
creditable service used

                                      -2-

<PAGE>   3


in determining eligibility for benefits under the Retirement Plan; and,
provided, further, at the time a key employee becomes a Participant, the
Compensation Committee, in its sole discretion, may in writing, credit such
Participant with additional whole Years of Service solely for purposes of
computing benefits under the formula set forth herein, but not for any other
purposes such as Plan eligibility or entitlement.


                                   ARTICLE III
                                CHANGE IN CONTROL

         For purposes of this Plan, "Change in Control" means, subject to the
last paragraph of this Section, the occurrence of any of the following events:

                  (a) Rouge Industries, Inc. or the Company is merged,
         consolidated or reorganized into or with another corporation or other
         legal person, and as a result of such merger, consolidation or
         reorganization less than 55% of the combined voting power of the
         then-outstanding Voting Stock of such corporation or person immediately
         after such transaction are held in the aggregate by Rouge Industries,
         Inc. or the Company or by the holders of Voting Stock of Rouge
         Industries, Inc. immediately prior to such transaction;

                  (b) Rouge Industries, Inc. or the Company sells or transfers
         all or substantially all of its assets to another corporation or other
         legal person, and as a result of such sale or transfer less than 55% of
         the combined voting power of the then-outstanding Voting Stock of such
         corporation or other legal person immediately after such sale or
         transfer is held in the aggregate by Rouge Industries, Inc. or the
         Company or by the holders of Voting Stock of Rouge Industries, Inc.
         immediately prior to such sale or transfer;

                  (c) Rouge Industries, Inc. files a report or proxy statement
         with the Securities and Exchange Commission pursuant to the Securities
         Exchange Act of 1934 disclosing in response to Form 8-K or Schedule 14A
         (or any successor schedule, form or report or item therein) that a
         change in control of Rouge Industries, Inc. or the Company will occur
         in the future pursuant to a then-existing contract or transaction which
         when consummated would be a Change in Control determined without regard
         to this subsection (c);

                                      -3-

<PAGE>   4


                  (d) If, during any period of two (2) consecutive years,
         individuals who at the beginning of any such period constitute the
         directors of Rouge Industries, Inc. cease for any reason to constitute
         at least a majority thereof; provided, however, that for purposes of
         this subsection (d), each director who is first elected, or first
         nominated for election by Rouge Industries, Inc.'s stockholders, by a
         vote of at least two-thirds of the directors of Rouge Industries, Inc.
         (or a committee thereof) then still in office who were directors of
         Rouge Industries, Inc. at the beginning of any such period will be
         deemed to have been a director of Rouge Industries, Inc. at the
         beginning of such period;

         or

                 (e) Unless otherwise determined by a majority vote of the Board
         of Directors of Rouge Industries, Inc. in the case of a corporate
         structure reorganization, the shareholders of Rouge Industries, Inc.
         approve, pursuant to applicable state law requirements, a complete
         liquidation or dissolution of Rouge Industries, Inc. or the Company.



         Notwithstanding the foregoing provisions of subsection (c), unless
otherwise determined in a specific case by a majority vote of the Board of
Directors of Rouge Industries, Inc., a "Change in Control" shall not be deemed
to have occurred for purposes of subsection (c) solely because Rouge Industries,
Inc., a subsidiary, or any Company-sponsored employee stock ownership plan or
any other employee benefit plan of Rouge Industries, Inc. or any subsidiary
either files or becomes obligated to file a report or a proxy statement under or
in response to Schedule 13D, Schedule 14D-1, Form 8-K or Schedule 14A (or any
successor schedule, form or report or item therein) under the Securities
Exchange Act of 1934 disclosing beneficial ownership by it of shares of Voting
Stock, whether in excess of 20% or otherwise, or because Rouge Industries, Inc.
reports that a Change in Control of Rouge Industries, Inc. has occurred or will
occur in the future by reason of such beneficial ownership.

         For purposes of this Article III, "Voting Stock" means securities
entitled to vote generally in the election of directors.






                                      -4-


<PAGE>   5

         Notwithstanding anything to the contrary herein, a "Change in Control"
shall not be deemed to have occurred solely as a result of a transfer of stock
of Rouge Industries, Inc. by Worthington Industries, Inc., or any of its
affiliates or shareholders, to any lender pursuant to the amortization of one or
more certain debt-in-exchange-for-capital loans between such parties which are
referred to as "DECS" and which are evidenced by exchangeable notes due March 1,
2000. However, this paragraph shall not prohibit the occurrence of a "Change In
Control" event if subsequent transactions would otherwise result in the
occurrence of a "Change In Control" event pursuant to this Section.

                                   ARTICLE IV
                                 BENEFIT PAYOUT

         The benefits under this Plan shall become payable when a Participant
begins to receive payments from the Retirement Plan, or when the Participant
dies and the Participant's spouse begins to receive payments, under the
Retirement Plan.

         Benefits payable under this Plan shall be payable to a Participant or
the Participant's spouse, if any, in the same form and manner as contributory
life income benefits are paid to the Participant or the Participant's spouse, if
any, pursuant to the Retirement Plan; provided, however, if Retirement Plan
benefits are paid pursuant to a contingent annuitant election for benefits by
the Participant pursuant to Article VII, Section 5B, thereof, benefits payable
pursuant to this Plan shall not be paid in the form of a contingent annuitant
election but instead shall be paid in the same form as the normal form of
benefit payment for Retirement Plan noncontributory benefits as if the only life
income benefits payable to the Participant under the Retirement Plan were
noncontributory benefits; and, provided, further, that in the event of a
Participant's regular early retirement, special early retirement, total and
permanent disability retirement, or deferred vested benefit commencement under
the Retirement Plan, as applicable, the monthly benefit provided hereunder shall
be reduced and/or adjusted in the same



                                      -5-
<PAGE>   6



manner as Retirement Plan contributory retirement benefits are reduced or
adjusted in the event of a regular early retirement, special early retirement,
total and permanent disability retirement or deferred vested benefits, as
applicable, but determined as if Final Average Monthly Compensation is in excess
of the breakpoint in the Retirement Plan.


                                   ARTICLE V
                        UNFUNDED AND NON-QUALIFIED PLAN

         This Plan is completely separate from the Retirement Plan. The
undertakings of the Company herein to each Participant constitute merely the
obligation to make payments as provided for herein from the Company's general
assets and it is the Company's intention that the Plan be unfunded for tax
purposes and for purposes of Title I of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"). Neither a Participant nor any beneficiary nor
any other person shall have, by reason of this Plan, any rights, title or
interest of any kind in or to any property of the Company, nor any beneficial
interest in any trust which may be established by the Company in connection with
this Plan. If the Company transfers any property to a trust in connection with
this Plan such trust shall not be held for the exclusive benefit of
Participants, and any assets held in such trust shall be subject to the claims
of the Company's general creditors in the event of the Company's insolvency or
bankruptcy.

                                   ARTICLE VI
                                 ADMINISTRATION

         The Plan shall be administered by the Compensation Committee of the
Board of Directors of the Company which shall have full and exclusive power to
interpret the Plan, to determine the amount and manner of any deferrals and
payments and to adopt such rules and regulations as are necessary for its
administration. The Compensation Committee may delegate specific
responsibilities it assumes under this Plan which are administrative or
ministerial in nature by notifying a delegate as to the duties









                                      -6-
<PAGE>   7

and responsibilities delegated. In that regard, the Compensation Committee
delegates responsibility for claims administration to the Retirement Committee
for the Rouge Steel Company Salaried Employee Retirement Plan (the "Retirement
Committee").

         Claims for benefits under the Plan shall be made in writing to the
Retirement Committee. If a claim for benefits is wholly or partially denied, the
Retirement Committee shall, within a reasonable period of time, but not later
than ninety (90) days after receipt of the claim, provide the claimant written
notice in a manner calculated to be understood by the claimant of:

                  (A) The specific reason or reasons for denial;

                  (B) Specific reference to the pertinent Plan provisions on
          which the denial is based;

                  (C) A description of any additional material or information
         necessary for the claimant to perfect the claim and an explanation of
         why such material or information is necessary; and

                  (D) Any explanation of the Plan's claim review procedure. A
         Participant or beneficiary whose claim for benefits under the Plan has
         been denied, or his or her duly authorized representative, may request
         a review upon written application to the Retirement Committee, and may
         submit issues and comments in writing. The claimant's written request
         for review must be submitted to the Retirement Committee within sixty
         (60) days after receipt by the claimant of written notification of the
         denial of the claim. A decision by the Retirement Committee shall be
         made promptly, and not later than sixty (60) days after the Retirement
         Committee's receipt of a request for review, unless special
         circumstances require an extension of time for proceeding, in which
         case a decision shall be rendered as soon as possible, but not




                                      -7-

<PAGE>   8

         later than one hundred twenty (120) days after receipt of the
         request for review. The decision on review shall be in writing and
         shall include specific reasons for the decision, specific reference to
         the pertinent Plan provisions on which the decision is based and be
         written in a manner calculated to be understood by the claimant.

         The decisions of the Compensation Committee and/or the Retirement
Committee shall be final and conclusive on all persons and neither the
Compensation Committee or the Retirement Committee shall be subject to liability
thereon.

                                   ARTICLE VII
                              TERMINATION FOR CAUSE

         Notwithstanding anything in this Plan to the contrary, if the Company
terminates a Participant's employment for Cause, then the Company shall have no
obligation to such Participant or his or her spouse pursuant to this Plan, and
no payments of any kind shall thereafter be made by the Company to the
Participant hereunder.

         For purposes of the foregoing, "Cause" means:

                 (i) any act or acts of the Participant constituting a felony
         (or its equivalent) under the laws of the United States, any state
         thereof or any foreign jurisdiction;

                 (ii) any material breach, as determined by the Company, by the
         Participant of any employment agreement with the Company or the
         policies of the Company or any of its subsidiaries or the willful and
         persistent (after written notice to the Participant) failure or
         refusal, as determined by the Company, of the Participant to perform
         his duties of employment or comply with any lawful directives of the
         Board of Directors of the Company;

                 (iii) conduct which the Company determines amounts to gross
         neglect, willful misconduct or dishonesty; or






                                      -8-

<PAGE>   9



                 (iv) any misappropriation of material property of the Company
         by the Participant or any misappropriation of a corporate or business
         opportunity of the Company by the Participant, all as determined by the
         Company.

                                  ARTICLE VIII
                                ERISA COMPLIANCE
                               NON-QUALIFIED PLAN

         Notwithstanding any provisions of this Plan to the contrary, the
Company, by written resolution of the Board of Directors or the Compensation
Committee, may terminate the Plan, or may amend or modify the Plan at any time
and in any respect, including as necessary or advisable in order that the
benefits provided by the Plan shall constitute unfunded deferred compensation
for a select group of management or highly compensated employees as described in
Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA. However, no such amendment or
termination shall adversely affect the rights of Participants or their spouses,
if any, to the extent of any vested benefits accrued as of the date of amendment
or termination of the Plan.

                                ARTICLE IX
                             NO EMPLOYMENT CONTRACT

         Nothing contained in this Plan, or any amendment hereto, shall be
construed as entitling a Participant to be continued in the employ of the
Company for any period of time, or as obliging the Company to keep said
Participant in its employ for any period of time. Furthermore, nothing contained
in this Plan, or any amendment hereto, shall be construed as restricting in any
way the right of the Company to reassign a Participant for any reason to a new
employment position at lower or higher compensation.



                                      -9-

<PAGE>   10

                                    ARTICLE X
                                NONASSIGNABILITY

         No rights of any kind under this Plan shall be transferable, or
assignable by a Participant, spouse or any other person, or be subject to
alienation, encumbrance, garnishment, attachment, execution, or levy of any
kind, voluntary or involuntary.

                                   ARTICLE XI
                              RULES OF CONSTRUCTION

         In the event that any provision of the Plan is determined by any
judicial, quasi-judicial or administrative body to be void or unenforceable for
any reason, all other provisions of the Plan shall remain in full force and
effect as if such void or unenforceable provision had never been part of the
Plan. The singular herein shall include the plural, or vice versa, wherever the
context so requires. A pronoun in the masculine, feminine or neuter gender shall
be deemed, where appropriate, to include also the masculine, feminine or neuter
gender.

                                   ARTICLE XII
                           WITHHOLDING; PAYROLL TAXES

         To the extent required by law in effect at the time payments are made,
the Company shall withhold from payments made hereunder any taxes required to be
withheld from a Participant's wages for the Federal or any state or local
government.

                                  ARTICLE XIII
                                 APPLICABLE LAW

         Except as governed by ERISA, and the Internal Revenue Code of 1986, as
amended, the Plan shall be construed in accordance with, and governed by, the
laws of the State of Michigan.





                                      -10-




<PAGE>   11


                                   ARTICLE XIV
                                    HEADINGS

         Headings to the Articles of this Plan are included for convenience only
and shall not control the meaning or interpretation of any provision of this
Plan.

         IN WITNESS WHEREOF, the Company has adopted this Plan this 22nd day of
December, 1999.


ATTEST:                                     ROUGE STEEL COMPANY



/s/ Martin Szymanski                        By: /s/ William E. Hornberger
-----------------------------------            ---------------------------------
Secretary                                               William E. Hornberger
                                            Its:        Senior Vice President
                                                --------------------------------






                                      -11-
<PAGE>   12


                                   APPENDIX A
                           TO THE ROUGE STEEL COMPANY
                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN


         In the event of a Change in Control, each Participant who has entered
into a written Change-In-Control Severance Agreement with Rouge Industries,
Inc., who becomes entitled to Change in Control benefits thereunder, and who
does not otherwise accrue the maximum service under the Retirement Plan
creditable in conjunction with benefits provided pursuant to the Rouge Steel
Company Salaried Income Security Plan ("SISP"), shall have his Rouge Steel
Company Supplemental Executive Retirement Plan benefit, but not his Retirement
Plan benefit, calculated based on such additional service necessary to attain
the maximum service creditable under the Retirement Plan in conjunction with
SISP benefits (no more than 21 months) and based on an increase in Participant's
age at the time at which such maximum service would have been attained if
credited in conjunction with the SISP.








                                      -12-