OREGON METALLURGICAL CORPORATION
                                  LONG TERM INCENTIVE COMPENSATION
                                   STOCK APPRECIATION RIGHTS PLAN

                                (Effective Date:  December 14, 1995)


        1.     PURPOSE.  The purposes of this Plan are to reward
performance, aid in retention of key strategic employees, provide
the Company with an additional element of competitive compensation,
align key strategic employee interests with those of the
shareholders and avoid dilution of existing shareholder ownership
interest.  The Plan will enable the Company to attract and retain
the best available personnel for positions of substantial
responsibility which will promote the success of the business of
the Company and its Subsidiaries.

        2.     DEFINITIONS.  As used herein, the following definitions
shall apply:

               2.1     "BOARD" or "BOARD OF DIRECTORS" means the Board of
Directors of the Company.

               2.2     "CAUSE" includes termination based on the commission
of any act or acts involving dishonesty, fraud, illegality or moral
turpitude.

               2.3     "CODE"  means the Internal Revenue Code of 1986, as
amended and regulations and rulings thereunder as amended from time
to time, and any successor thereto.

               2.4     "COMMITTEE" means the committee of the Board
appointed pursuant to Section 4.  

               2.5     "COMMON STOCK" means the common stock of the
Company, $1.00 par value.  

               2.6     "COMPANY" means Oregon Metallurgical Corporation, an
Oregon corporation.  

               2.7     "DIRECTOR" means any person serving on the Board of
Directors of the Company.  

               2.8     "DISABILITY" means a mental or physical condition
which, in the opinion of the Committee, renders a Grantee unable or
incompetent to carry out the job responsibilities which such
Grantee held or the tasks to which such Grantee was assigned at the
time the disability was incurred, and which is expected to be
permanent or for an indefinite duration exceeding one year.  

1 -     OREGON METALLURGICAL CORPORATION
        LONG TERM INCENTIVE COMPENSATION
        STOCK APPRECIATION RIGHTS PLAN (SWW2/65385/103687/PST/626971.3)
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               2.9     "EFFECTIVE DATE"  means December 14, 1995.

               2.10    "FAIR MARKET VALUE" of a Share means, as of any
applicable date the closing price of a Share of the Common Stock on
the National Association of Securities Dealers, Inc. Automated
Quotations System ("Nasdaq") National Market System or any national
securities exchange on which the Common Stock is traded (or if the
Common Stock is not then traded on the Nasdaq National Market
System or a national securities exchange, the representative
closing bid price of the Common Stock on the over-the-counter
market), as reported in The Wall Street Journal, or if no such
reported sale shall have occurred on such date, on the next
preceding date on which there was such a reported sale.  

               2.11    "GRANT DATE" means the date on which the award of
Units shall be duly granted, as determined in accordance with
Section 5.1.

               2.12    "GRANTEE" means an individual who has been granted
Units under this Plan.  

               2.13    "1934 ACT" means the Securities Exchange Act of
1934, as amended.  References to a particular section of, or rule
under, the 1934 Act shall include references to successor
provisions.

               2.14    "PLAN" means this Oregon Metallurgical Corporation
Long Term Incentive Compensation Stock Appreciation Rights Plan.

               2.15    "RETIREMENT" means termination of employment with
the Company and its Subsidiaries any time after attaining age 65
with at least 5 years of Company service.  

               2.16    "SECTION 16 GRANTEE" means a person subject to
potential liability under Section 16(b) of the 1934 Act with
respect to transactions involving equity securities of the Company. 

               2.17    "SHARE" means a share of Common Stock.

               2.18    "SUBSIDIARY" means any entity in which the Company
directly or through intervening subsidiaries owns twenty-five
percent (25%) or more of the total combined voting power or value
of all classes of stock or, in the case of an unincorporated
entity, a twenty-five percent (25%) or more interest in the capital
and profits.

               2.19    "UNIT" means an equal, undivided interest in the
future appreciation in the value of a Share.  


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        LONG TERM INCENTIVE COMPENSATION
        STOCK APPRECIATION RIGHTS PLAN (SWW2/65385/103687/PST/626971.3)
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        3.     ELIGIBILITY.  Eligibility to participate in the Plan is
limited to officers and key senior managers of the Company or any
of its domestic Subsidiaries.  In selecting the individuals to whom
Units may be granted as well as determining the number of Units,
and the other terms and conditions applicable to, each grant, the
Committee shall take into consideration such factors as it deems
relevant in promoting the purposes of this Plan. 

        4.     ADMINISTRATION.

               4.1     Subject to Section 4.2, the Plan shall be
administered by a committee ("Committee") of the Board of
Directors.  The composition of the Committee shall be subject to
such limitations as the Board deems appropriate to permit
transactions pursuant to this Plan to be exempt or excluded from
Section 16 of the 1934 Act.  

               4.2     The Board may, in its discretion, reserve to itself
or delegate to another committee of the Board any or all of the
authority and responsibility of the Committee with respect to
awards who are not Section 16 Grantees at the time any such
delegated authority or responsibility is exercised.  Such other
committee may consist of two or more directors who may, but need
not be, officers or employees of the Company or its Subsidiaries. 
To the extent that the Board has reserved to itself or delegated to
such other committee the authority and responsibility of the
Committee, all references to the Committee in this Plan shall be to
the Board or such other committee.  

               4.3     The Committee shall have full and final authority,
in its discretion, subject to the express provisions of this Plan,
as follows:  

                       4.3.1          to grant Units.  

                       4.3.2          to determine (A) when Units will be
granted; or (B) which Grantees within the eligible group are to
receive Units and the number of Units each Grantee is to receive. 

                       4.3.3          to determine the Fair Market Value on any
applicable valuation date.

                       4.3.4          to interpret this Plan and to make all
determinations necessary or advisable for the administration of
this Plan.

                       4.3.5          to prescribe, amend, and rescind rules and
regulations relating to this Plan, including rules with respect to
the exercisability and nonforfeitability of Units.


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        LONG TERM INCENTIVE COMPENSATION
        STOCK APPRECIATION RIGHTS PLAN (SWW2/65385/103687/PST/626971.3)
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                       4.3.6          to determine the terms and provisions and
any restrictions or conditions, which need not be identical, of
grants under the Plan and with the consent of the Grantee, to
modify any such grant at any time.

                       4.3.7    to cancel, with the consent of the Grantee,
outstanding Units and to grant new Units in substitution therefor. 


                       4.3.8          to delegate its duties and
responsibilities under this Plan, except its duties and
responsibilities with respect to Section 16 Grantees and (A) the
acts of such delegates shall be treated hereunder as acts of the
Committee and (B) such delegates shall report to the Committee
regarding the delegated duties and responsibilities.  

                       4.3.9          to accelerate or waive any or all of the
restrictions and conditions applicable to, any award or any group
of awards for any reason.

                       4.3.10         subject to Section 7.2, to extend the time
during which any award or group of awards may be exercised.

                       4.3.11         to correct any defect or supply any
omission or reconcile any inconsistency in the Plan or in any grant
under the Plan in the manner and to the extent it may deem
expedient.

                       4.3.12         to make all other determinations necessary
and advisable with respect thereto.  

                       The determination of the Committee on all matters
relating to this Plan shall be conclusive and final.  No member of
the Committee shall be liable for any action or determination made
in good faith with respect to this Plan.  

               4.4     The Board of Directors may from time to time appoint
members of the Committee in substitution for and in addition to
members previously appointed and may fill vacancies, however
caused, in the Committee.  The Committee may select one of its
members as its chairperson and shall hold its meetings at such
times and places as it shall deem advisable.  A majority of the
members of the Committee shall constitute a quorum.  All actions of
the Committee shall be taken by a majority of its members
constituting a quorum.  Any action may be taken by a written
instrument signed by all Committee members, and all actions so
taken shall be fully as effective as if it has been taken by a vote
of a majority of the members at a meeting duly called and held.


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        LONG TERM INCENTIVE COMPENSATION
        STOCK APPRECIATION RIGHTS PLAN (SWW2/65385/103687/PST/626971.3)
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               4.5     For each Grantee receiving a grant, an account shall
be established in the Grantee's name.  Each Grantee's account shall
designate the number of Units which have been granted to that
Grantee, the Grant Date on the Fair Market Value of a Share on the
Grant Date.

        5.     AWARD OF UNITS; VESTING.

               5.1     The Grant Date of an award of Units shall be the
date on which the Committee grants the Units or such later date as
specified in advance by the Committee. 

               5.2     Subject to Sections 5.6 and 8, each Unit shall
entitle the Grantee, upon exercise, to receive from the Company in
exchange therefor an amount equal in value to the excess, if any,
of the Fair Market Value on the date of exercise of one Share of
Common Stock of the Company over its Fair Market Value on the Grant
Date, multiplied by the number of Units, or portion thereof, that
is surrendered.  

               5.3     The Units represent a hypothetical investment only
in the Company and do not constitute Shares.  The Units represent,
upon vesting, the right to receive cash.  This Plan shall not give
any Grantee a right to receive actual Shares of the Company and the
Company shall not be required to issue Shares to a Grantee as a
result of his or her participation in this Plan.  

               5.4     The maximum number of Units which the Committee may
award each calendar year under this Plan is 3.5% of the number of
issued and outstanding Shares of Common Stock on December 31 of the
calendar year preceding the current calendar year in which the
Committee is awarding Units.  The Committee may not carryover Units
from a prior calendar year that were available and not awarded by
the Committee.   

               5.5     Subject to Sections 5.6 and 8, and unless otherwise
extended in the grant, the Units granted to each Grantee shall
become vested as follows: 50% of Units granted vest on the second
anniversary of the Grant Date; 75% of the Units granted vest on the
third anniversary of the Grant Date; and 100% of the Units granted
vest on the fourth anniversary of the Grant Date.  A separate
vesting schedule shall be maintained for each grant of Units based
on the Grant Date of the Units.  Unless the Committee conditions
the grant otherwise, such vesting shall occur only if the Grantee
is in the full time employ of the Company or its Subsidiaries on
each vesting date and has been continually employed (except for
such leaves of absence as have been approved by the Board of
Directors) for the period commencing as of the Grant Date of the
Units.

               5.6     All rights to any Units payable under the terms of
this Plan shall be immediately forfeited if the Grantee engages in
any act which, in the opinion of the Committee, is inimical to the
best interests of the Company; including, but not limited to,
fraud, embezzlement, or disloyalty.  The judgment of the Committee
shall be final as to the


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        LONG TERM INCENTIVE COMPENSATION
        STOCK APPRECIATION RIGHTS PLAN (SWW2/65385/103687/PST/626971.3)
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determination of the nature of any acts performed by the Grantee
which are subject to this Section.  The Committee, in its sole
discretion, may interpret and decide upon the nature of such acts.

        6.     STOCK ADJUSTMENTS.  The Committee shall make equitable
adjustment of the number of Units and the Fair Market Value of
Shares to be used to determine the amount of the benefit payable
upon exercise of a Unit to reflect a stock dividend, stock split,
reverse stock split, share combination, recapitalization, merger,
consolidation, separation, spinoff, reorganization, stock rights
offering, or otherwise, of or by the Company.  
        7.     EXERCISE; EXPIRATION OF UNITS.

               7.1     At any time after a Grantee is vested in any Units
granted to Grantee under this Plan, the Grantee may exercise all or
a portion of his or her vested Units by delivery to the Company of
written notice of intent to exercise a specific number of Units.

               7.2     Notwithstanding any other provision in this Plan,
all Units awarded to a Grantee shall expire ten years after the
Units are granted.  All amounts payable with respect to such
expired Units shall be forfeited if not exercised pursuant this
Section prior to the expiration date. 

        8.     EFFECT OF TERMINATION OF EMPLOYMENT, DEATH, DISABILITY,
RETIREMENT OR CHANGE IN CONTROL.

               8.1     FOR CAUSE.  If a Grantee has a termination of
employment for Cause, then, any unexercised Units shall thereupon
terminate.

               8.2     ON ACCOUNT OF DEATH OR DISABILITY.  If a Grantee has
a termination of employment on account of death or Disability,
then, any unexercised Units, whether or not exercisable on the date
of such termination of employment, will be deemed vested and
exercised.  

               8.3     ON ACCOUNT OF RETIREMENT.  If a Grantee has a
termination of employment on account of Retirement, then, any
unexercised Units, whether or not exercisable on the date of such
termination of employment, will be deemed vested.  Such Units may
be exercised in whole or in part by the Grantee no later than the
365th day following the Grantee's date of retirement.

               8.4     ON ACCOUNT OF CHANGE IN CONTROL.  In the event of a
"Change in Control," any unexercised Units, whether or not
exercisable on the date of such Change in Control, will be deemed
vested.  Such Units may be exercised in whole or in part by the
Grantee no later than the 365th day following the Change in
Control.  A "Change in

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        LONG TERM INCENTIVE COMPENSATION
        STOCK APPRECIATION RIGHTS PLAN (SWW2/65385/103687/PST/626971.3)
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Control" means a change in control of a nature that would be
required to be reported in response to item 6(a) of Schedule 14A or
Regulation 14A promulgated under the 1934 Act as in effect on
November 15, 1988, provided that such a change in control shall be
deemed to have occurred at such time as (i) any "person" (as that
term is used in Section 13(d) and 14(d)(2) of the 1934 Act), is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the
1934 Act) directly or indirectly, of securities representing 20% or
more of the combined voting power for election of directors of the
then outstanding securities of the Company or any successor of the
Company; (ii) during any period of two (2) consecutive years or
less, individuals who at the beginning of such period constituted
the Board of Directors of the Company cease, for any reason, to
constitute at least a majority of the Board, unless the election or
nomination for election of each new director was approved by a vote
of at least two-thirds of the directors then still in office who
were directors at the beginning of the period; (iii) the
shareholders of the Company approve any merger or consolidation as
a result of which the shares shall be changed, converted or
exchanged (other than a merger with a wholly owned subsidiary of
the Company) or any liquidation of the Company or any sale or other
disposition of 50% or more of the assets or earning power of the
Company; or (iv) the shareholders of the Company approve any merger
or consolidation to which the Company is a party as a result of
which the persons who were shareholders of the Company immediately
prior to the effective date of the merger or consolidation shall
have beneficial ownership of less than 50% of the combined voting
power for election of directors of the surviving corporation
following the effective date of such merger or consolidation;
provided, however, that no Change in Control shall be deemed to
have occurred if, prior to such times as a Change in Control would
otherwise be deemed to have occurred, the Board of Directors
determines otherwise.

               8.5     ANY OTHER REASON.  If a Grantee has a termination of
employment for a reason other than for Cause, death of the Grantee,
the Grantee's Disability, Retirement, or a Change in Control, any
unexercised Units to the extent exercisable on the date of the
Grantee's termination of employment, may be exercised in whole or
in part by the Grantee, not later than the 365th day following the
Grantee's termination of employment; provided that if such 365th
day is not a business day, such Unit may be exercised not later
than the first business day following such 365th day.  Any unvested
Units will be forfeited.  

        9.     PAYMENT.

               9.1     Within 30 days from the exercise date, the Company
shall pay to the Grantee the exercised Unit amount as defined in
Section 5.2.  All amounts payable under this Section may be paid by
the Company in a single lump sum or in installment payments, as
elected by the Company.  If installment payments are so elected,
payments may be made in no more than 12 equal quarterly
installments of principal and interest, commencing 30 days after
the exercise date.  All deferred amounts shall bear interest at the
rate of 10% per annum from the exercise date until paid.  


7 -     OREGON METALLURGICAL CORPORATION
        LONG TERM INCENTIVE COMPENSATION
        STOCK APPRECIATION RIGHTS PLAN (SWW2/65385/103687/PST/626971.3)
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               9.2     The Company shall have the right to withhold from
any payments under this Plan any taxes required by law to be
withheld with respect to such payments.  

        10.    GRANTEE'S RESPONSIBILITIES.  In consideration for the
benefits payable under the Plan, each Grantee shall agree that he
or she will devote his or her full time, skill, diligence and
attention to the Company's and its Subsidiaries' business and will
not actively engage, either directly or indirectly, in any business
or other activity which is or may be deemed to be in any way
competitive with or adverse to the best interests of the business
of the Company and its Subsidiaries.

        11.    RIGHTS AS A SHAREHOLDER.  A Grantee shall have no rights
as a shareholder with respect to any Unit.  

        12.    RESTRICTION ON TRANSFER.  Each Unit granted under this
Plan shall not be assignable or transferable other than by will or
the laws of descent and distribution or pursuant to a qualified
domestic relations order as defined in the Code unless the Board or
the Committee permit otherwise in writing.  The rights of a Grantee
under the terms of this Plan are personal to the Grantee.  The
rights of a Grantee or of any beneficiary are nontransferable and
are not subject to voluntary or involuntary alienation, assignment
or transfer by the Grantee or the beneficiary.  Any attempt to
transfer (including transfer by a trustee or receiver in
bankruptcy) shall cause the Grantee or beneficiary to forfeit all
rights to any benefit under the terms of this Plan.  

        Each Unit granted to a Section 16 Grantee shall not be
assignable or transferable other then by will or the laws of
descent and distribution or pursuant to a qualified domestic
relations order as defined in the Code unless the Board (or such
committee) has determined that such restrictions are not then
required for grants under this Plan to satisfy the requirements for
the exemption or exclusion provided by Section 16 of the 1934 Act
(in the form then applicable to the Company).  Notwithstanding the
foregoing, a Section 16 Grantee may, in a manner specified by the
Committee and to the extent provided by this Plan, designate a
beneficiary.  

        13.    RELATIONSHIP BETWEEN THE PARTIES.

               13.1    Nothing contained in this Plan and no action taken
pursuant to the provisions of this Plan shall create or be
construed to create a trust of any kind, or a fiduciary
relationship between the Company and any Grantee, his or her
beneficiaries or any other person.  Any Company funds which may be
subject to the provisions of this Agreement shall continue for all
purposes to be the general funds of the Company.  No person other
than the Company shall have any interest in such funds by virtue of
this Plan.

               13.2    The rights of any Grantee to benefits under this
Plan shall be solely those of any unsecured creditor of the
Company.  Any insurance policy or other assets 


8 -     OREGON METALLURGICAL CORPORATION
        LONG TERM INCENTIVE COMPENSATION
        STOCK APPRECIATION RIGHTS PLAN (SWW2/65385/103687/PST/626971.3)
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acquired or held by the Company in connection with the liabilities
assumed by it pursuant to this Plan shall not be deemed to be held
under any trust for the benefit of any Grantee, a beneficiary of
any Grantee, any Grantee's estate, or to be security for the
performance of the obligations of the Company but shall be a
general, unpledged and unrestricted asset of the Company.

               13.3    Any amount payable under this Plan shall not be
deemed salary or other compensation of any Grantee for the purpose
of computing benefits to which he or she may be entitled under any
pension plan or other arrangement of the Company or its
Subsidiaries for the benefit of its Grantees.

               13.4    The benefits payable under this Plan shall be
independent of, and in addition to, any other agreement relating to
any Grantee's employment that may exist from time to time between
the parties hereto, or any other compensation payable by the
Company to any Grantee, whether salary, bonus or otherwise.

               13.5    This Plan shall not be deemed to constitute a
contract of employment between the Company and any Grantee, nor
shall any provision of this Plan be interpreted to restrict the
right of the Company to discharge any Grantee or restrict the right
of any Grantee to terminate his or her employment.

               13.6    The Company in its discretion may apply for and
procure as owner and for its own benefit insurance on the life of
any Grantee who is a participant in the Plan in such amounts and in
such forms as the Company may choose.  Such Grantee shall have no
interest whatsoever in any such policy or policies, but at the
request of the Company he or she shall submit to medical
examinations and supply such information and execute such documents
as may be required by the insurance company or companies to whom
the Company has applied for insurance.

               13.7    Transfer of any Grantee from employment by the
Company to employment by a Subsidiaries or the transfer of any
Grantee from employment by a Subsidiaries to the Company shall not
be deemed a termination of employment.

               13.8    Each Grantee shall execute a Grantee's statement
substantially in the same form as Exhibit A.

               13.9    The amounts payable under the Plan shall not be
subject to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance or charge.  Any attempt to anticipate,
alienate, transfer, assign, pledge, encumber or charge the same
shall be void and shall terminate the Grantee's rights hereunder
whereupon the Company shall have no further liability to him or
her.


9 -     OREGON METALLURGICAL CORPORATION
        LONG TERM INCENTIVE COMPENSATION
        STOCK APPRECIATION RIGHTS PLAN (SWW2/65385/103687/PST/626971.3)
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               13.10           Each Grantee shall file with the Company a
written designation of one or more persons as beneficiary who shall
be entitled to receive the amount, if any, payable under the Plan
upon the death of the Grantee (substantially in the form of Exhibit
B).  A Grantee may revoke or change his or her beneficiary
designation without the consent of a prior beneficiary by filing a
new designation with the Company.  The last such designation
received by the Company shall be controlling; provided, however,
that no designations shall be effective unless received by the
Company prior to the Grantee's death and in no event shall it be
effective as of the date prior to such receipt.  Beneficiary
designations of Grantees who are residents of community property
states must also be executed by the Grantee's spouse, if any.

               13.11           If no such beneficiary designation is in effect
at the time of a Grantee's death, or if no designated beneficiary
survives the Grantee, or if such designation conflicts with law,
the Grantee's estate shall be deemed to have been designated his or
her beneficiary and shall receive the payment of the amount, if
any, payable under the Plan upon his or her death.  If the Company
is in doubt as to the right of any person to receive such amount,
the Company may retain such amount, without incurring any liability
to such person, and without liability for any interest on such
amount, until the rights thereto are determined, or the Company may
pay such amount into any court of appropriate jurisdiction and such
payment shall be a complete discharge of the liability of the Plan
and the Company therefor.

               13.12           For accounting purposes, any grants which are
forfeited under this Plan shall be treated as if they were returned
to the Company and other Grantees shall have no rights in or to the
forfeited amounts.

               13.13           The Company shall annually give each Grantee
who has been granted Units a statement (substantially in the form
as Exhibit C) setting forth the number of Units granted, the Grant
Date, the Fair Market Value for each grant, and the Fair Market
Value for each grant as of the statement date.

        14.    CLAIMS PROCEDURE.

               14.1    CLAIMS.  If a Grantee is denied all or a portion of
an expected benefit under the terms of this Plan for any reason,
the Company shall notify the Claimant within 60 days of the
determination of the denial.  The notice shall be in writing, sent
by mail to the Claimant's last known address and must contain the
following information:

                       14.1.1           The specific reasons for the denial;

                       14.1.2           Specific reference to pertinent
provisions of this Plan on which the denial is based; and 


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        LONG TERM INCENTIVE COMPENSATION
        STOCK APPRECIATION RIGHTS PLAN (SWW2/65385/103687/PST/626971.3)
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                       14.1.3  If applicable, a description of any
additional information or material necessary to perfect the claim,
an explanation of why such information or material is necessary and
an explanation of the claims review procedure.

               14.2    REVIEW PROCEDURE.  A Claimant is entitled to request
a review of any denial by the Company.  The request for review must
be submitted in writing within 60 days of the Claimant's receipt of
the notice of the denial.  Absent a request for review within the
60-day period, the claim will be deemed to be conclusively denied. 
The Claimant or his or her representative shall be entitled to
review all pertinent documents, and to submit issues and comments
in writing.

               14.3    FINAL DECISION.  Within 60 days of receipt of the
Claimant's request for review, the Company shall allow or deny the
review.  The decision shall be made in writing to the Claimant. 
The decision shall recite the facts and reasons for its position,
with specific reference to the pertinent provisions of this Plan.

        15.    ACCOUNTING.  All accounting issues arising due to the
existence of this Plan shall be determined in accordance with
generally accepted accounting principles.

        16.    AMENDMENT OR TERMINATION.  This Plan shall terminate ten
years from the Effective Date of the Plan or such earlier time as
the Board may determine.  The Board may from time to time in its
discretion amend or modify this Plan without the approval of the
shareholders of the Company, except as such approval as may be
required under the 1934 Act or the Code.  Any amendment or
termination, whether in whole or in part, shall not affect a grant
then outstanding under this Plan.

        17.    NONUNIFORM DETERMINATIONS.  Neither the Committee's or
the Board's determinations under this Plan need be uniform and may
be made by the Committee or the Board selectively among persons who
receive, or are eligible to receive, Units (whether or not such
persons are similarly situated).  

        18.    CONTROLLING LAW.  The Plan and all determinations made
and actions taken pursuant thereto shall be governed by the laws of
the State of Oregon and construed in accordance therewith.  

        19.    SEVERABILITY.  If all or any part of this Plan is
declared by any court,  governmental authority or arbitrator to be
unlawful or invalid, such unlawfulness or invalidity shall not
serve to invalidity shall not serve to invalidate any portion of
this Plan not declared to be unlawful or invalid.  Any Section or
part of a Section so declared to be unlawful or invalid shall, if
possible, be construed in a manner which will give effect to the
terms of such Section or part of a Section to the fullest extent
possible while remaining lawful and valid.


11 -    OREGON METALLURGICAL CORPORATION
        LONG TERM INCENTIVE COMPENSATION
        STOCK APPRECIATION RIGHTS PLAN (SWW2/65385/103687/PST/626971.3)
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        20.    ARBITRATION.  Any claim or controversy arising under or
in connection with this Plan shall be settled exclusively by
binding arbitration in Albany, Oregon in accordance with the rules
of the American Arbitration Association and the laws of the State
of Oregon then in effect.  The parties consent to the jurisdiction
of the Circuit Court of the State of Oregon, Linn County, and the
United States District Court for the District of Oregon, for all
purposes in connection with this Section.  Judgment may be entered
on the arbitrator's award in any court having jurisdiction.  Costs
of such arbitration shall be borne equally by the parties to the
arbitration.  Arbitration shall be by a single arbitrator selected
by the parties or if the parties are unable to agree upon an
arbitrator, the Circuit Court of the State of Oregon, Linn County,
shall appoint an arbitrator.  The parties agree that the arbitrator
shall have no jurisdiction to consider evidence with respect to or
render an award or judgment for punitive damages (or any other
amount awarded for the purpose of imposing a penalty).  The parties
agree that all facts and other information relating to any
arbitration arising under this Agreement shall be kept confidential
to the fullest extent permitted by law.

                                             OREGON METALLURGICAL CORPORATION
                                             an Oregon corporation



                                             By:______________________
                                             Its:______________________



12 -    OREGON METALLURGICAL CORPORATION
        LONG TERM INCENTIVE COMPENSATION
        STOCK APPRECIATION RIGHTS PLAN (SWW2/65385/103687/PST/626971.3)
<PAGE>
                                              EXHIBIT A

                                       PARTICIPANT'S STATEMENT


        I have read the Oregon Metallurgical Corporation Long Term
Incentive Compensation Stock Appreciation Rights Plan ("Plan") and
understand that it sets forth my rights in the Plan and that I have
no other rights except as set forth therein.  I understand this is
a discretionary, discriminatory Plan.  I further understand that
under certain circumstances, all or a portion of the benefits
payable to me under the Plan may be forfeited.

        DATED this ______ day of ___________________, 19___.



                                                      _________________________
                                                      Participant



1 - EXHIBIT A                               (SWW2/65385/103687/PST/626971.3)
<PAGE>
                                              EXHIBIT B

                                       BENEFICIARY DESIGNATION

        Pursuant to the provisions of the Oregon Metallurgical
Corporation Long Term Incentive Compensation Stock Appreciation
Rights Plan, I designate the following as my beneficiary or
beneficiaries to whom any interest I may then have in the Plan
shall be paid in the event of my death (it being specifically
understood that I reserve such rights as may be available to me
under the Plan to change this beneficiary designation).

PRIMARY BENEFICIARY                                   SECONDARY BENEFICIARY

______________________________                        __________________________
Name                                                  Name

______________________________                        __________________________
Address                                               Address

______________________________                        __________________________
Social Security No.                                   Social Security No.

______________________________                        __________________________
Relationship                                          Relationship 

NOTE:  Give full name, address, Social Security number and
relationship of beneficiary or beneficiaries.  Attach additional
designations, if necessary.

        DATED this ______ day of _____________________, 19____.


                                                      __________________________
                                                      Participant

                                                      _________________________
                                                      Spouse (if applicable)

        The forgoing form was received by Oregon Metallurgical
Corporation on the ______ day of ___________________, 19_____.

                                              OREGON METALLURGICAL CORPORATION
                                              an Oregon corporation


                                              By:_______________________________

1 - EXHIBIT B                                 (SWW2/65385/103687/PST/626971.3)
<PAGE>
                                              EXHIBIT C

                                     MODEL STATEMENT OF ACCOUNT


_________________________

_________________________

_________________________
   Name and Address of
      Participant                                   _________________________
                                                    Social Security Number

<TABLE>
<CAPTION>
================================================================================================================
     A.           B.               C.               D.               E.               F.               G.
<S>           <C>               <C>           <C>                <C>              <C>                <C>                          
Grant         Number of           Fair         Fair Market       Value of a         Total
Date            Units            Market       Value of Share     Unit as of        Value of          Percent
               Granted          Value of        of Company        December          Units            Vested
                                Share on          Common         31, ______        (COLUMNS
                                  Grant         December 31,        (COLUMNS          BxE)
                                  Date             ____               D-C)           
_______________________________________________________________________________________________________________

_______________________________________________________________________________________________________________

_______________________________________________________________________________________________________________

_______________________________________________________________________________________________________________
Totals
===================================================================================================================
</TABLE>

Fair Market Value of one Share of Common Stock of Oregon
Metallurgical Corporation as of December 31, __________ was
$________________.  


                       YOUR INTEREST IS CONTINGENT ONLY AND
                       IS SUBJECT TO FORFEITURE.  A COPY OF
                       THE PLAN CAN BE OBTAINED FROM THE
                       SECRETARY OF THE COMPANY.


1 - EXHIBIT C                                 (SWW2/65385/103687/PST/626971.3)