OREGON METALLURGICAL CORPORATION
                          SAVINGS PLAN

                        Table of Contents


DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
   1.1.        "Actual Contribution Percentage" . . . . . . . . . . . 1
   1.2.        "Actual Deferral Percentage" . . . . . . . . . . . . . 2
   1.3.        "Adjusted Balance" . . . . . . . . . . . . . . . . . . 2
   1.4.        "Annual Additions" . . . . . . . . . . . . . . . . . . 2
   1.5.        "Beneficiary". . . . . . . . . . . . . . . . . . . . . 2
   1.6.        "Board". . . . . . . . . . . . . . . . . . . . . . . . 2
   1.7.        "Break in Service" . . . . . . . . . . . . . . . . . . 2
   1.8.        "Code" . . . . . . . . . . . . . . . . . . . . . . . . 3
   1.9.        "Committee". . . . . . . . . . . . . . . . . . . . . . 3
   1.10.       "Company" or "Oremet". . . . . . . . . . . . . . . . . 4
   1.11.       "Company Discretionary Contribution" . . . . . . . . . 4
   1.12.       "Company Discretionary Contribution Account" . . . . . 4
   1.13.       "Compensation" or "Earnings" . . . . . . . . . . . . . 4
   1.14.       "Early Retirement Date". . . . . . . . . . . . . . . . 5
   1.15.       "Employee" . . . . . . . . . . . . . . . . . . . . . . 5
   1.16.       "Employment Year". . . . . . . . . . . . . . . . . . . 5
   1.17.       "Equity Contributions" . . . . . . . . . . . . . . . . 6
   1.18.       "Equity Contribution Accounts" . . . . . . . . . . . . 6
   1.19.       "Entry Date" . . . . . . . . . . . . . . . . . . . . . 6
   1.20.       "ERISA". . . . . . . . . . . . . . . . . . . . . . . . 6
   1.21.       "Highly Compensated Participant" . . . . . . . . . . . 6
   1.22.       "Hour of Service". . . . . . . . . . . . . . . . . . . 6
   1.23.       "Investment Fund" or "Fund". . . . . . . . . . . . . . 7
   1.24.       "Limitation Year". . . . . . . . . . . . . . . . . . . 7
   1.25.       "Matching Contributions" . . . . . . . . . . . . . . . 7
   1.26.       "Matching Contribution Account". . . . . . . . . . . . 7
   1.27.       "Maximum Permissible Amount" . . . . . . . . . . . . . 8
   1.28.       "Net Profits". . . . . . . . . . . . . . . . . . . . . 8
   1.29.       "Normal Retirement Date" . . . . . . . . . . . . . . . 8
   1.30.       "Participant". . . . . . . . . . . . . . . . . . . . . 8
   1.31.       "Percentage Return on Equity" or "Return on Equity". . 8
   1.32.       "Plan" . . . . . . . . . . . . . . . . . . . . . . . . 8
   1.33.       "Plan Year". . . . . . . . . . . . . . . . . . . . . . 8
   1.34.       "Related Employer" . . . . . . . . . . . . . . . . . . 8
   1.35.       "Related Plan" . . . . . . . . . . . . . . . . . . . . 8
   1.36.       "Salary Reduction Agreement" . . . . . . . . . . . . . 8

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   1.37.       "Salary Reduction Contributions" . . . . . . . . . . . 8
   1.38.       "Salary Reduction Contribution Account". . . . . . . . 9
   1.39.       "Service". . . . . . . . . . . . . . . . . . . . . . . 9
   1.40.       "Supplemental Company Contribution". . . . . . . . . . 9
   1.41.       "Trust" or "Trust Fund". . . . . . . . . . . . . . . . 9
   1.42.       "Trust Agreement". . . . . . . . . . . . . . . . . . . 9
   1.43.       "Trustee". . . . . . . . . . . . . . . . . . . . . . . 9
   1.44.       "Valuation Date" or "Quarterly Valuation Date" . . . . 9
   1.45.       "Voluntary Contributions". . . . . . . . . . . . . . . 9
   1.46.       "Voluntary Contribution Account" . . . . . . . . . . . 9
   1.47.       "Year of Service". . . . . . . . . . . . . . . . . . . 9

PARTICIPATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
   2.1.        Eligibility. . . . . . . . . . . . . . . . . . . . . . 10
   2.2.        Salary Reduction Contributions . . . . . . . . . . . . 10
   2.3.        Reemployment of a Participant. . . . . . . . . . . . . 10

SALARY REDUCTION CONTRIBUTIONS. . . . . . . . . . . . . . . . . . . . 10
   3.1.        Salary Reductions. . . . . . . . . . . . . . . . . . . 10
   3.2.        Administrative Rules Governing Salary Reduction
                 Agreements . . . . . . . . . . . . . . . . . . . . . 12
   3.3.        Limitations on Salary Reduction Contributions. . . . . 12
   3.4.        Recharacterization and Return of Certain Salary
                 Reduction Contributions. . . . . . . . . . . . . . . 14
   3.5.        Treatment of Associated Matching Contribution. . . . . 14
   3.6.        Distributions From Salary Reduction Contribution
                 Accounts . . . . . . . . . . . . . . . . . . . . . . 15
   3.7.        Accounting . . . . . . . . . . . . . . . . . . . . . . 15
   3.8.        Supplemental Company Contributions . . . . . . . . . . 15

OTHER CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . 16
   4.1.        Company Discretionary Contributions. . . . . . . . . . 16
   4.2.        Matching Contributions . . . . . . . . . . . . . . . . 16
   4.3.        Equity Contributions . . . . . . . . . . . . . . . . . 17
   4.4         Voluntary Contributions. . . . . . . . . . . . . . . . 18
   4.5.        Limitations on Contributions . . . . . . . . . . . . . 18
   4.6.        Rules Governing Matching Contributions and Voluntary
                 Contributions. . . . . . . . . . . . . . . . . . . . 19
   4.7.        Exclusive Benefit of Employees . . . . . . . . . . . . 22
   4.8.        Transfers From Qualified Plans . . . . . . . . . . . . 23

ALLOCATIONS TO PARTICIPANTS' ACCOUNTS . . . . . . . . . . . . . . . . 25
   5.1.        Separate Accounts. . . . . . . . . . . . . . . . . . . 25
   5.2.        Allocations of Company Discretionary Contributions and
                 Forfeitures. . . . . . . . . . . . . . . . . . . . . 25
   5.3.        Allocation to Salary Reduction Contribution
                 Accounts . . . . . . . . . . . . . . . . . . . . . . 25
   5.4.        Allocation of Matching Contributions . . . . . . . . . 26
   5.5.        Allocation of Voluntary Contributions and
                 Forfeitures. . . . . . . . . . . . . . . . . . . . . 26

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   5.6.        Maximum Allocation . . . . . . . . . . . . . . . . . . 27
   5.7.        Vesting. . . . . . . . . . . . . . . . . . . . . . . . 29
   5.8.        Allocations and Adjustments to Accounts. . . . . . . . 30
   5.9.        Installments . . . . . . . . . . . . . . . . . . . . . 31
   5.10        Valuation of Oremet Stock. . . . . . . . . . . . . . . 31

PAYMENT OF BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . 31
   6.1.        Payments on Retirement . . . . . . . . . . . . . . . . 31
   6.2         Payments on Death. . . . . . . . . . . . . . . . . . . 32
   6.3.        Payments on Disability . . . . . . . . . . . . . . . . 33
   6.4.        Payments on Termination for Other Reasons. . . . . . . 34
   6.5.        Pretermination Distributions . . . . . . . . . . . . . 35
   6.6.        Methods of Payment . . . . . . . . . . . . . . . . . . 37
   6.7.        Distribution of Unallocated Employee Contributions . . 40
   6.8.        Administrative Powers Relating to Payments . . . . . . 40
   6.9.        Withdrawals from Voluntary Contribution Account. . . . 41
   6.10        Investment Pending Distribution. . . . . . . . . . . . 41

PLAN ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . . . 41
   7.1.        Company Responsibility . . . . . . . . . . . . . . . . 41
   7.2.        Powers and Duties of Committee . . . . . . . . . . . . 41
   7.3.        Organization and Operation of Committee. . . . . . . . 42
   7.4.        Records and Reports of Committee . . . . . . . . . . . 42
   7.5.        Claims Procedure . . . . . . . . . . . . . . . . . . . 42
   7.6.        Compensation and Expenses of Committee . . . . . . . . 43
   7.7.        Indemnity of Committee Members . . . . . . . . . . . . 43
   7.8         Voting Rights and Stock Dispositions . . . . . . . . . 43

LOANS TO PARTICIPANTS . . . . . . . . . . . . . . . . . . . . . . . . 45
   8.1.        Loans to Participants. . . . . . . . . . . . . . . . . 45
   8.2.        Maximum Loan Amount. . . . . . . . . . . . . . . . . . 46
   8.3.        Repayment of Loans . . . . . . . . . . . . . . . . . . 47
   8.4.        Terms. . . . . . . . . . . . . . . . . . . . . . . . . 47

INVESTMENT FUNDS. . . . . . . . . . . . . . . . . . . . . . . . . . . 50
   9.1.        Investment Funds . . . . . . . . . . . . . . . . . . . 50
   9.2.        Initial Investment . . . . . . . . . . . . . . . . . . 51
   9.3.        Selection of Investment Funds. . . . . . . . . . . . . 51

AMENDMENT AND TERMINATION . . . . . . . . . . . . . . . . . . . . . . 52
   10.1.       Amendment of Plan. . . . . . . . . . . . . . . . . . . 52
   10.2.       Voluntary Termination of or Permanent Discontinuance
                 of Contributions to the Plan . . . . . . . . . . . . 52

                                                 III
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   10.3.       Involuntary Termination of Plan. . . . . . . . . . . . 52
   10.4.       Payments on Termination of or Permanent
                 Discontinuance of Contributions to the Plan. . . . . 53

MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
   11.1.       Duty To Furnish Information and Documents. . . . . . . 53
   11.2.       Committee's Annual Statements and Available
                 Information. . . . . . . . . . . . . . . . . . . . . 53
   11.3.       No Enlargement of Employment Rights. . . . . . . . . . 54
   11.4.       Applicable Law . . . . . . . . . . . . . . . . . . . . 54
   11.5.       No Guarantee . . . . . . . . . . . . . . . . . . . . . 54
   11.6.       Unclaimed Funds. . . . . . . . . . . . . . . . . . . . 54
   11.7.       Merger or Consolidation of Plan. . . . . . . . . . . . 55
   11.8.       Interest Nontransferable . . . . . . . . . . . . . . . 55
   11.9.       Prudent Man Rule . . . . . . . . . . . . . . . . . . . 55
   11.10.      Limitations on Liability . . . . . . . . . . . . . . . 56
   11.11.      Headings . . . . . . . . . . . . . . . . . . . . . . . 56
   11.12.      Gender and Number. . . . . . . . . . . . . . . . . . . 56
   11.13.      ERISA and Approval Under Internal Revenue Code . . . . 56
   11.14.      Extension of Plan to Related Employers . . . . . . . . 56

TOP-HEAVY PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . 57
   12.1.       Top-Heavy Status . . . . . . . . . . . . . . . . . . . 57
   12.2.       Definitions. . . . . . . . . . . . . . . . . . . . . . 57
   12.3.       Determination of Top-Heavy Status. . . . . . . . . . . 58
   12.4.       Vesting. . . . . . . . . . . . . . . . . . . . . . . . 59
   12.5.       Minimum Contribution . . . . . . . . . . . . . . . . . 60
   12.6.       Compensation . . . . . . . . . . . . . . . . . . . . . 60
   12.7.       Collective Bargaining Agreements . . . . . . . . . . . 60

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                OREGON METALLURGICAL CORPORATION
                          SAVINGS PLAN                       


        This AGREEMENT is made this 27th day of September, 1995, by
OREGON METALLURGICAL CORPORATION, a corporation (referred to as the
Company), effective January 1, 1995.


                           WITNESSETH:

        WHEREAS, the Company desires to increase certain of its
Employees' interest in the Company by providing a medium through
which they may share in the profitable operations of the Company;
and

        WHEREAS, the Company wishes both to reward certain of its
Employees for past service and to furnish additional security to
certain of its Employees who become permanently disabled;

        NOW, THEREFORE, the Company hereby adopts the OREGON
METALLURGICAL CORPORATION SAVINGS PLAN, effective as of January 1,
1995, as set forth below:


                            ARTICLE I

                           DEFINITIONS

        Whenever used herein the following words and phrases shall
have the meanings stated below unless a different meaning is
plainly required by the context:

        1.1.   "Actual Contribution Percentage" (if applicable for any
year in which Voluntary Contributions are permitted) for a
specified group of Participants for a given Plan Year means the
average of the ratios, calculated separately for each Participant
in such group, of: (a) the sum of the Voluntary Contributions, if
any, contributed by the Participant to the Plan for such Plan Year
and the Matching Contributions, if any, contributed by the Company
on behalf of such Participant to the Plan for such Plan Year, to
(b) the Participant's Compensation for the period of time during
such Plan Year in which he was a participant. 

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        1.2.   "Actual Deferral Percentage" for a specified group of
Participants for a given Plan Year means the average of the ratios,
calculated separately for each Participant in such group, of: (a)
the Salary Reduction Contributions, if any, and Supplemental
Company Contributions, if any, contributed by the Company on behalf
of each such Participant for such Plan Year to (b) the
Participant's Compensation for the period of time during such Plan
Year in which he was a Participant.

        1.3.   "Adjusted Balance" means the balance in a Participant's
account or accounts, as adjusted in accordance with Sections 5.2,
5.3, 5.4, 5.5, 5.6 and 5.8 of the Plan as of the applicable
Valuation Date.

        1.4.   "Annual Additions" means the total of: (a) Company
contributions allocated to a Participant's accounts under this Plan
and any Related Plan during any Limitation Year; (b) the amount of
Employee contributions made by the Participant under this Plan and
any Related Plan; and (c) forfeitures allocated to a Participant's
accounts under this Plan and any Related Plan. Clauses (a) and (b)
above include excess contributions under Sections 3.4 and 4.6.

        1.5.   "Beneficiary" means the person, persons, or entity
designated or determined pursuant to the provisions of Section
6.2(b) of the Plan.

        1.6.   "Board" means the Board of Directors of the Company.

        1.7.   "Break in Service" means the termination of employment of
an Employee followed by the expiration of an Employment Year in
which the Employee accumulates fewer than 501 Hours of Service. 
For purposes of this Section:

               (a)     A Break in Service shall not be deemed to have
        occurred if (i) the employment of a terminated Employee is
        resumed prior to the expiration of an Employment Year in which
        he accumulates fewer than 501 Hours of Service; (ii) the
        Employee is absent with the prior consent of the Company for
        a period not exceeding 12 months (which consent shall be
        granted under uniform rules applied to all Employees on a
        nondiscriminatory basis) and he returns to active employment
        with the Company upon the expiration of the period of
        authorized absence; or (iii) he leaves the Company to serve in
        the armed forces of the United States for a period during
        which his reemployment rights are guaranteed by law and he
        returns or offers to return to work for the Company prior to
        the expiration of his reemployment rights.



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               (b)     An Employee who is absent from work with the Company
        because of (i) the Employee's pregnancy, (ii) the birth of the
        Employee's child, (iii) the placement of a child with the
        Employee in connection with the Employee's adoption of the
        child, or (iv) caring for such child immediately following
        such birth or placement shall receive credit, solely for
        purposes of determining whether a Break in Service has
        occurred under this Section, for the Hours of Service
        described in subsection (c) of this Section; provided that the
        total number of hours credited as Hours of Service under this
        subsection shall not exceed 501 Hours of Service.

               (c)     In the event of an Employee's absence from work for
        any of the reasons set forth in subsection (b) of this
        Section, the Hours of Service that the Employee will be
        credited with under subsection (b) are (i) the Hours of
        Service that otherwise would normally have been credited to
        the Employee but for such absence, or (ii) eight Hours of
        Service per day of such absence if the Committee is unable to
        determine the Hours of Service described in clause (i).

               (d)     An Employee who is absent from work for any of the
        reasons set forth in subsection (b) of this Section shall be
        credited with Hours of Service under subsection (b), (i) only
        in the Employment Year in which the absence begins, if the
        Employee would be prevented from incurring a Break in Service
        in that Year solely because the period of absence is treated
        as credited Hours of Service, as provided in subsections (b)
        and (c), or (ii) in any other case, in the immediately
        following Employment Year.

               (e)     No credit for Hours of Service will be given
        pursuant to subsections (b), (c) and (d) of this Section
        unless the Employee furnishes to the Committee such timely
        information that the Committee may reasonably require to
        establish (i) that the absence from work is for one of the
        reasons specified in subsection (b) and (ii) the number of
        days for which there was such an absence. No credit for Hours
        of Service will be given pursuant to subsections (b), (c), and
        (d) for any purpose of the Plan other than the determination
        of whether an Employee has incurred a Break in Service
        pursuant to this Section.

        1.8.   "Code" means the Internal Revenue Code of 1986, as
amended from time to time. Reference to a Section of the Code shall
include that Section and any comparable Section or Sections of any
future legislation that amends, supplements or supersedes said
Section.

        1.9.   "Committee" means the Plan Administrative Committee
described in Section 7.1 of the Plan.


OREGON METALLURGICAL CORPORATION SAVINGS PLAN                          PAGE 3
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        1.10.          "Company" or "Oremet" means OREGON METALLURGICAL
CORPORATION, an Oregon corporation, or any successor corporation
resulting from a merger or consolidation with the Company or
transfer of substantially all of the assets of the Company, if such
successor or transferee shall adopt and continue the Plan by
appropriate corporate action, pursuant to Section 11.3 of the Plan.

        1.11.          "Company Discretionary Contribution" means a
contribution made by the Company pursuant to the provisions of
Section 4.1 of the Plan.

        1.12.          "Company Discretionary Contribution Account" means
the record of money and assets held by the Trustee for an
individual Participant or Beneficiary pursuant to the provisions of
the Plan, derived from Company Discretionary Contributions to the
Trust.

        1.13.          "Compensation" or "Earnings" means a Participant's
total remuneration from the Company paid during a Plan Year for
services rendered, as reflected in Box 10 (or similar item
subsequently redesignated) of the participant's IRS Form W-2 for
the calendar year corresponding to the Plan Year, and excludes the
taxable portion of moving expense, and compensation which is not
currently includible in the Participant's gross income by reason of
the application of Code Section 125, 402 (e)(3), 402 (h)(1)(B), or
403 (b), and includes amounts subject to the Salary Reduction
Agreement under this Plan.

               (a)     In addition to other applicable limitations set
        forth in the Plan and notwithstanding any other provision of
        the Plan to the contrary, for Plan Years beginning on or after
        January 1, 1994, the annual Compensation of each Employee
        taken into account under the Plan shall not exceed the OBRA
        '93 annual compensation limit. The OBRA '93 annual
        compensation limit is $150,000, as adjusted by the
        Commissioner for increases in the cost of living in accordance
        with Section 401(a)(17)(B) of the Code. The cost-of-living
        adjustment in effect for a calendar year applies to any
        period, not exceeding 12 months, over which Compensation is
        determined (determination period) beginning in such calendar
        year. If a determination period consists of fewer than 12
        months, the OBRA '93 annual compensation limit will be
        multiplied by a fraction, the numerator of which is the number
        of months in the determination period, and the denominator of
        which is 12.

               (b)     For Plan Years beginning on or after January 1,
        1994, any reference in this Plan to the limitation under
        Section 401(a)(17) of the Code shall mean the OBRA '93 annual
        compensation limit set forth in this provision.

               (c)     If Compensation for any prior determination period
        is taken into account in determining an Employee's benefits
        accruing in the current Plan Year, the Compensation for that
        prior determination period is subject to the OBRA '93 annual
        compensation limit in effect for that prior determination
        period.  For this purpose, for



OREGON METALLURGICAL CORPORATION SAVINGS PLAN                       PAGE 4
<PAGE>
determination periods beginning before the first day of the first
Plan Year beginning on or after January 1, 1994, the OBRA '93
annual compensation limit is $150,000.

               (d)     Compensation shall exclude (a)(1) contributions made
        by the Employer to a qualified or non-qualified plan of
        deferred compensation to the extent that the contributions are
        not includable in the gross income of the Participant for the
        taxable year in which contributed, (2) any distributions from
        a qualified or non-qualified plan of deferred compensation;
        (b) amounts realized from the exercise of a non-qualified
        stock option, or when restricted stock (or property) held by
        an Employee either becomes freely transferable or is no longer
        subject to a substantial risk of forfeiture; (c) amounts
        realized from the sale, exchange or other disposition of stock
        acquired under a qualified stock option; and (d) other amounts
        which receive special tax benefits.

        1.14.  "Early Retirement Date" means (a) the date a
Participant attains age 55 and has completed five (5) years of
service, or (b) the date that any combination of the total of a
Participant's Years of Service and age add up to 75.

        1.15.  "Employee" means an individual employed by the Company
that has completed IRS Form W-4, provided, however, that "Employee"
does not include any individual who is a non-resident alien and who
receives no earned income from the Company which constitutes income
from sources within the United States.  Employees of a Related
Employer shall be excluded from this Plan unless the Plan is
adopted by the Related Employer.  Notwithstanding anything to the
contrary contained in this Section 1.15, no provision of this
Section 1.15 shall be construed or interpreted to require the
Company to make a Company contribution under the Plan for any
individual who is not an Employee.  A person who performs service
for the Company as an independent contractor is not an Employee for
purposes of this Plan.

               A person who is not employed by the Company but who
performs services for the Company pursuant to an agreement between
the Company and a leasing organization shall be considered a
"leased Employee" after such person performs such services on a
substantially full-time basis for at least 12 months and the
services are of a type historically performed by Employees in the
business field of the Company. A person who is considered a leased
Employee of the Company shall not be considered an Employee for
purposes of the Plan. If a leased Employee subsequently becomes an
Employee, and thereafter participates in the Plan, he shall be
given credit for Hours of Service and Service for his period of
employment as a leased Employee, except to the extent that the
requirements of Section 414(n)(5) of the Code were satisfied with
respect to such Employee while he was a leased Employee. 

        1.16.  "Employment Year", if applicable, means a
12-consecutive-month period commencing with an Employee's initial
date of hire (or last date of rehire if he has incurred a Break



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<PAGE>
in Service) or with any anniversary thereof. An Employee's date of
hire shall be the first day on which he completes an Hour of
Service and his date of rehire shall be the first day on which he
completes an Hour of Service following a Break in Service.

        1.17.  "Equity Contributions" means amounts contributed by the
Company pursuant to Section 4.3 of the Plan.

        1.18.  "Equity Contribution Accounts" means the record of
Oremet common stock held by the Trustee for an Individual
Participant or Beneficiary pursuant to the provisions of the Plan
derived from Equity Contributions.

        1.19.  "Entry Date" means the Employee's date of hire, and for
Employees employed on the Effective Date, the Entry Date is the
Effective Date.  

        1.20.  "ERISA" means Public Law No. 93-406, the Employee
Retirement Income Security Act of 1974, as amended from time to
time.

        1.21.  "Highly Compensated Participant" means a Participant
who, during the current Plan Year or the preceding Plan Year, (a)
was at any time a five-percent owner of the Company, (b) received
Compensation from the Company in excess of $75,000 (or such greater
amount provided by the Secretary of the Treasury pursuant to
Section 414(q) of the Code), (c) received Compensation from the
Company in excess of $50,000 (or such greater amount provided by
the Secretary of the Treasury pursuant to Section 414(q) of the
Code) and was in the top paid group of Employees for such Plan
Year, or (d) was at any time an officer of the Company and received
Compensation from the Company greater than 50% of the amount in
effect under Section 415(b)(1)(A) of the Code for such Plan Year.
The provisions of Section 414(q) of the Code shall apply in
determining whether a Participant is a Highly Compensated
Participant.  The Company for any Plan Year may elect to identify
Highly Compensated Participants based upon only the current Plan
Year to the extent permitted by Section 414(q) of the Code and
Regulations issued thereunder.

        1.22.  "Hour of Service" means (i) each hour for which an
Employee is paid or entitled to payment for the performance of
duties for the Company; and (ii) each hour for which an Employee is
directly or indirectly paid by the Company or is entitled to
payment from the Company during which no duties are performed by
reason of vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or leave of absence
(but not in excess of 501 hours in any continuous period during
which no duties are performed).  Each Hour of Service for which
back pay, irrespective of mitigation of damages, is either awarded
or agreed to by the Company shall be included under either (i) or
(ii) as may be appropriate.  Hours of Service shall be credited:

               (a)     in the case of hours referred to in clause (i) of
        the first sentence of this Section, for the computation period
        in which the duties are performed;


OREGON METALLURGICAL CORPORATION SAVINGS PLAN                         PAGE 6
<PAGE>
               (b)     in the case of hours referred to in clause (ii) of
        the first sentence of this Section, for the computation period
        or periods in which the period during which no duties are
        performed occurs; and

               (c)     in the case of hours for which back pay is awarded
        or agreed to by the Company, for the computation period or
        periods to which the award or agreement pertains, rather than
        to the computation period in which the award, agreement or
        payment is made.

        In determining Hours of Service, an Employee who is employed
by the Company on other than an hourly rated basis shall be
credited with 10 Hours of Service per day for each day the Employee
would, if hourly rated, be credited with service pursuant to clause
(i) of the first sentence of this Section 1.22. If an Employee is
paid for reasons other than the performance of duties pursuant to
clause (ii) of the first sentence of this Section 1.22: (i) in the
case of a payment made or due which is calculated on the basis of
units of time, an Employee shall be credited with the number of
regularly scheduled working hours included in the units of time on
the basis of which the payment is calculated; and (ii) an Employee
without a regular work schedule shall be credited with 8 Hours of
Service per day (to a maximum of 40 Hours of Service per week) for
each day that the Employee is so paid. Hours of Service shall be
calculated in accordance with Department of Labor Regulations
<SUBSECTION> 2530.200b-2 or any future legislation or regulation
that amends, supplements or supersedes said section.  Solely for
purposes of determining an Employee's (i) eligibility to
participate in the Plan under Section 2.1, and (ii) vesting under
Section 5.7, Hours of Service shall include hours during an
approved leave of absence granted by an employer to an Employee on
or after August 5, 1993 pursuant to the Family and Medical Leave
Act, if the Employee returns to work for an employer at the end of
such leave of absence.

        Such Hours of Service shall be calculated pursuant to the
second sentence of this paragraph. 

        1.23.  "Investment Fund" or "Fund" means any Fund as described
on the schedule attached hereto.

        1.24.  "Limitation Year" means the 12-consecutive-month period
to be used in determining the Plan's compliance with Code Section
415 and the regulations thereunder.  The Company shall take all
actions necessary to ensure that the Limitation Year is the same
12-month period as the Plan Year. 

        1.25.  "Matching Contributions" means amounts contributed by
the Company pursuant to Section 4.2 of the Plan.

        1.26.  "Matching Contribution Account" means the record of
money and assets held by the Trustee for an individual Participant
or Beneficiary pursuant to the provisions of the Plan derived from
Matching Contributions.


OREGON METALLURGICAL CORPORATION SAVINGS PLAN                       PAGE 7
<PAGE>
        1.27.  "Maximum Permissible Amount" means the lesser of: (a)
$30,000 (or, if greater, one-quarter of the dollar limitation in
effect pursuant to Section 415(b)(1)(A) of the Code); or (b) 25% of
a Participant's Compensation.

        1.28.  "Net Profits" means the net income or profits of the
Company for a given fiscal year determined by the Company upon the
basis of its books of account maintained in accordance with
generally accepted  accounting practices, consistently applied
without any deduction for: (i) federal, state or local taxes based
upon income; (ii) contributions made by the Company in accordance
with the terms of this Plan; or (iii) contributions made by the
Company to any other plan which is qualified under the provisions
of Section 401 of the Code. 

        1.29.  "Normal Retirement Date" means the date a Participant
attains age 65.

        1.30.  "Participant" means an Employee who becomes a
Participant under the provisions of Section 2.1 of the Plan.

        1.31.  "Percentage Return on Equity" or "Return on Equity"
means profit (net income after tax) divided by average equity (the
sum of the equity as of the end of the previous fiscal year and the
end of each fiscal quarter divided by five).

        1.32.  "Plan" means the OREGON METALLURGICAL CORPORATION
SAVINGS PLAN.  For purposes of Section 401(a)(27)(B) of the Code,
the Plan shall constitute a profit sharing plan.

        1.33.  "Plan Year" means the fiscal year of the Company, which
is currently designated as the 12-month period from January 1
through December 31 of each year. Any other 12-consecutive- month
period that may hereafter be designated as the fiscal year of the
Company shall be the Plan Year.

        1.34.  "Related Employer" means (i) any corporation that is a
member of a controlled group of corporations (as defined in Section
414(b) of the Code) that includes the Company; (ii) any trade or
business (whether incorporated or unincorporated) that is under
common control (as defined in Section 414(c) of the Code) with the
Company; and (iii) any member of an affiliated service group (as
defined in Section 414(m) of the Code) that includes the Company.

        1.35.  "Related Plan" means any other defined contribution
plan (as defined in Section 415 of the Code) maintained by the
Company or by any Related Employer.

        1.36.  "Salary Reduction Agreement" means a written agreement,
entered into by a Participant, pursuant to the provisions of
Sections 3.1 and  3.2 of the Plan.

        1.37.  "Salary Reduction Contributions" means amounts
contributed by the Company on behalf of Participants pursuant to
the provisions of Section 3.1 of the Plan.



OREGON METALLURGICAL CORPORATION SAVINGS PLAN                        PAGE 8
<PAGE>
        1.38.  "Salary Reduction Contribution Account" means the
record of money and assets held by the Trustee for an individual
Participant or Beneficiary pursuant to the provisions  of the 
Plan,  derived from  Salary Reduction Contributions and
Supplemental Company Contributions.

        1.39.  "Service" shall have the meaning set forth in "Year of
Service", below.  

        1.40.  "Supplemental Company Contribution" means a
contribution made by the Company pursuant to the provisions of
Section 3.8 of the Plan.

        1.41.  "Trust" or "Trust Fund" means all money, securities and
other property held under the Trust Agreement for the purposes of
the Plan.

        1.42.  "Trust Agreement" means the agreement between the
Company and the Trustee governing the administration of the Trust,
as it may be amended from time to time.

        1.43.  "Trustee" means the corporation or individuals
appointed by the Board of Directors of the Company to administer
the Trust.

        1.44.  "Valuation Date" or "Quarterly Valuation Date"means the
last day of each calendar quarter and such other date, if any, as
shall be selected by the Company, except that Company Discretionary
Contributions shall have a Valuation Date that is the last day of
the Plan Year (the "Annual Valuation Date") or such other date, if
any, as shall be selected by the Company.  "Valuation Period" means
the time between consecutive Valuation Dates.

        1.45.  "Voluntary Contributions" means Participant after-tax
contributions if specifically authorized by the Board and made
pursuant to the provisions of Section 4.4.

        1.46.  "Voluntary Contribution Account" means the record of
money and assets held by the Trustee for an individual Participant
or Beneficiary pursuant to the provisions of the Plan, derived from
Voluntary Contributions.

        1.47.  "Year of Service" means the computation period of
twelve (12) consecutive months, herein set forth, during which an
Employee has at least 1,000 Hours of Service.  For vesting
purposes, the computation period shall be the Plan Year, including
periods prior to the Effective Date of the Plan.

               Service shall include an approved leave of absence
granted to an Employee on or after August 5, 1993 pursuant to the
Family and Medical Leave Act, if the Employee returns to work for
an employer at the end of such leave of absence.  Without regard to
the preceding provisions of this Section 1.47, a Participant's
years of Service after a period of five consecutive one-year Breaks
in Service shall be disregarded for purposes of determining his
nonforfeitable interest in his Company Discretionary Contribution
Account as of the Valuation Date coincident with or next preceding
the date he incurs such five consecutive one-year Breaks in
Service.  For any short Plan Year, the


OREGON METALLURGICAL CORPORATION SAVINGS PLAN                       PAGE 9
<PAGE>
determination of whether an Employee has completed a Year of
Service shall be made in accordance with Department of Labor
Regulation 2530.203-2(c).


                           ARTICLE II

                          PARTICIPATION

        2.1.   ELIGIBILITY.  Each Employee employed on the Effective
Date (January 1, 1995) shall become a Participant in this Plan on
the Effective Date.  Employees hired after the Effective Date shall
become eligible to participate upon completion of a period of
employment of 120 calendar days with the Company.  After satisfying
the eligibility requirements, an employee shall become a
Participant as of the employee's date of hire.

        2.2.   SALARY REDUCTION CONTRIBUTIONS.  Each Participant shall
be entitled to authorize Salary Reduction Contributions to be made
by the Company on his behalf effective as of the first full payroll
period following satisfaction of the eligibility requirements of
Section 2.1 after the date he becomes a Participant. Each such
Participant shall authorize such Salary Reduction Contributions by
executing and filing with the Committee a Salary Reduction
Agreement and such other forms as may be required by the Committee,
which the Committee will provide as soon as practicable after the
Employee satisfies the eligibility requirements of Section 2.1.

        2.3.   REEMPLOYMENT OF A PARTICIPANT.  If an Employee who has
satisfied the eligibility requirements of Section 2.1 shall incur
a Break in Service and shall thereafter be reemployed by the
Company, he shall again become eligible to participate under the
Plan on the date of his resumption of employment.  Upon such
reemployment by the Company, all Years of Service before such Break
shall be taken into account for purposes of vesting under Section
5.7 if any part of the Participant's benefit derived from Company
contributions was nonforfeitable.  If no part of the Participant's
benefit derived from Company contributions was nonforfeitable when
he incurred such Break, years of Service with the Company completed
prior to such Break shall not be required to be taken into account
in any event if the number of consecutive one-year Breaks in
Service equals or exceeds the greater of (A) five or (B) the
aggregate number of years of Service completed prior to such Break.


                           ARTICLE III

                 SALARY REDUCTION CONTRIBUTIONS

        3.1.   SALARY REDUCTIONS.

               (a)             (i)    Each Participant may elect, by entering
                       into a Salary Reduction Agreement with the Company,
                       to reduce his Earnings from the Company by any
                       integral percentage, as elected by the

OREGON METALLURGICAL CORPORATION SAVINGS PLAN                      PAGE 10
<PAGE>
                       Participant, but not to exceed a maximum of 15% of
                       a Participant's Earnings.  Reductions to a
                       Participant's Earnings pursuant to his Salary
                       Reduction Agreement shall be effected through
                       payroll deductions.  Salary Reduction Agreements
                       shall be subject to the special rules set forth in
                       this Article III.  

                               (ii)   If specifically authorized by the Board,
                       and effective when specified by the Committee, for
                       the duration of the Collective Bargaining Agreement
                       entered into in 1994 between the Company and the
                       United Steelworkers of America, Local 7150, each
                       Participant may elect as part of the Salary
                       Reduction Agreement to defer receipt of all (or any
                       portion) of the Participant's Equity Bonus
                       Compensation.  "Equity Bonus Compensation" means
                       the bonus compensation of one (1) share of common
                       stock of the Company awarded for each $100 of
                       Earnings of the Participant as described in the
                       Stock Compensation Plan -- Salaried Employees and
                       the Stock Compensation Plan -- Union Employees. 
                       Deferred Equity Bonus Compensation shall be
                       regarded as salary reduction for a Participant and
                       held in the Participant's Equity Bonus Compensation
                       Account.

               (b)     Notwithstanding any provision of the Plan to the
        contrary, the elective deferrals (as defined in Section
        402(g)(3) of the Code, including Salary Reduction
        Contributions) of any Participant for any taxable year of the
        Participant shall not exceed the amount set forth in Section
        402(g) of the Code, as adjusted by the Secretary of the
        Treasury pursuant to Sections 402(g)(5) and 415(d) of the
        Code.  Notwithstanding paragraph (a), fractional reductions
        shall be permitted where necessary to comply with the limit
        imposed by Section 402(g)(3) of the Code.  Any amount
        contributed to the Plan by the Company on behalf of a
        Participant during any Plan Year, pursuant to the
        Participant's Salary Reduction Agreement, in excess of the
        limitations set forth in this subsection, adjusted for
        earnings, gains, and losses allocable thereto, shall be paid
        directly to the Participant within the time period set forth
        in Section 402(g)(2) of the Code.

               (c)     The Company shall contribute to the Trust a Salary
        Reduction Contribution in an amount equal to the total amount
        subject to Salary Reduction Agreements and deducted from
        payroll during the period from the last preceding Valuation
        Date and not reduced pursuant to Sections 3.3 and 3.4.  The
        Company shall pay to the Trustee its Salary Reduction
        Contribution as of the earliest date on which such
        Contributions can reasonably be segregated from the Company's
        general assets, not to exceed 90 days from the date on which
        such amounts would otherwise have been payable to the
        Participants in cash.

OREGON METALLURGICAL CORPORATION SAVINGS PLAN                     PAGE 11
<PAGE>
        3.2.   Administrative Rules Governing Salary Reduction
Agreements.

               (a)     The Committee will set rules on the time periods
        within which a Salary Reduction Agreement can be entered,
        amended, or revoked.

               (b)     The Committee, at its election, may amend, suspend
        or revoke a Salary Reduction Agreement with a Participant at
        any time if the Committee determines that such amendment,
        suspension or revocation is necessary to ensure that the
        Annual Additions to the accounts of a Participant for any Plan
        Year do not exceed the Maximum Permissible Amount for such
        Participant for that Plan Year or to ensure that the
        requirements of Section 3.3 are met for such Plan Year.

        3.3.   LIMITATIONS ON SALARY REDUCTION CONTRIBUTIONS.

               (a)     Notwithstanding anything to the contrary contained
        elsewhere in the Plan or contained in any Salary Reduction
        Agreement, all Salary Reduction Agreements entered into with
        respect to any Plan Year shall be valid only if one of the
        tests set forth in subsection (b) of this Section is satisfied
        for such Plan Year.  In determining whether such tests are
        satisfied, all Salary Reduction Contributions, Supplemental
        Company Contributions, if any, and excess Salary Reduction
        Contributions under Section 3.1(b) of Highly Compensated
        Participants, if any, made with respect to such Plan Year
        shall be considered.

               (b)     For each Plan Year the Actual Deferral Percentage
        for Highly Compensated Participants shall bear to the Actual
        Deferral Percentage for all other Participants a relationship
        that satisfies either of the following tests:

                       (i)     The Actual Deferral Percentage for Highly
               Compensated Participants is not more than the Actual
               Deferral Percentage of all other Participants multiplied
               by 1.25; or

                       (ii)    The Actual Deferral Percentage for Highly
               Compensated Participants is not more than the Actual
               Deferral Percentage for all other Participants multiplied
               by two and the excess of the Actual Deferral Percentage
               for the group of Highly Compensated Participants over
               that of all other Participants is not more than two
               percentage points.

               That portion of the Plan that benefits hourly employees
        subject to the Collective Bargaining Agreement with the United
        Steelworkers of America will be tested separately from that
        portion of the Plan benefiting salaried employees not subject
        to such Collective Bargaining Agreement.


OREGON METALLURGICAL CORPORATION SAVINGS PLAN                      PAGE 12
<PAGE>
               (c)     If at the end of any Plan Year neither of the tests
        set forth in subsection (b) of this Section is satisfied for
        such Year, then:

                       (i)     Salary Reduction Agreements entered into for
               such Year by Highly Compensated Participants shall be
               valid only to the extent permitted by one of the tests
               set forth in subsection (b) of this Section, and Salary
               Reduction Contributions made by the Company for such Year
               for Highly Compensated Participants shall be reduced in
               the manner set forth in subsection (c)(ii) to the extent
               necessary to comply with one of the tests set forth in
               subsection (b) of this Section. All Salary Reduction
               Contributions so reduced, adjusted for earnings, gains
               and losses allocable thereto, shall be allocated and
               distributed in the manner provided in Section 3.4.

                       (ii)    Reductions pursuant to subsection (i) next
               above shall be effected with respect to Highly
               Compensated Participants pursuant to the following
               procedure: The Actual Deferral Percentage of the Highly
               Compensated Participant with the highest Actual Deferral
               Percentage shall be reduced to the extent necessary to
               cause such Highly Compensated Participant's Actual
               Deferral Percentage to equal the Actual Deferral
               Percentage of the Highly Compensated Participant with the
               next highest Actual Deferral Percentage.  This process
               shall be repeated until the Plan satisfies one of the
               tests set forth in subsection (b) of this Section for
               such Plan Year.

                       (iii)          Salary Reduction Agreements entered into
               by all Participants who are not Highly Compensated
               Participants shall be valid and Salary Deferral
               Contributions made by the Company for  such Participants
               shall not be changed.

        The calculations, reductions and allocations required by this
        Section 3.3 and Section 3.4 shall be made by the Company with
        respect to a Plan Year at any time prior to the close of the
        following Plan Year.

               (d)     If at any time during a Plan Year the Company, in
        its sole discretion, determines that neither of the tests set
        forth in subsection (b) of this Section 3.3 may be met for
        such Plan Year, then:

                       (i)     The Committee shall have the unilateral right
               during the Plan Year to require the prospective
               reduction, for the balance of such Year or any part
               thereof, of the percentage of the Earnings of Highly
               Compensated Participants that may be subject to Salary
               Reduction Agreements. Such reductions shall be made to
               the extent necessary, in the discretion of the Committee,
               to assure that one of the tests set forth in subsection
               (b) of this



OREGON METALLURGICAL CORPORATION SAVINGS PLAN                        PAGE 13
<PAGE>
               Section 3.3 shall be met for the Plan Year and shall be
               based upon estimates made from data available to the
               Committee at any time during the Plan Year.

                       (ii)    Reductions pursuant to subsection (i) next
               above shall be effected with respect to Highly
               Compensated Participants pursuant to the following
               procedure: The Actual Deferral Percentage of the Highly
               Compensated Participant with the highest Actual Deferral
               Percentage shall be reduced to the extent necessary to
               cause such Highly Compensated Participant's Actual
               Deferral Percentage to equal the Actual Deferral
               Percentage of the Highly Compensated Participant with the
               next highest Actual Deferral Percentage. This process
               shall be repeated to the extent necessary to assure that
               one of the tests set forth in subsection (b) shall not be
               exceeded for such plan year.

        3.4.   RECHARACTERIZATION AND RETURN OF CERTAIN SALARY REDUCTION
CONTRIBUTIONS. If a Salary Reduction Contribution made by the
Company for a Highly Compensated Participant is reduced for a Plan
Year pursuant to Section 3.3(c), the amount so reduced shall be
allocated and distributed, at any time prior to the close of the
following Plan Year, as follows:

               (a)     To the extent permitted by regulations issued by the
        Secretary of the Treasury and as elected by the Highly
        Compensated Participant, if the Participant has not made
        Voluntary Contributions equal to the maximum amount permitted
        under the Plan, the amount reduced pursuant to Section 3.3(c),
        adjusted for earnings, gains and losses allocable thereto for
        the Plan Year, shall be deemed to be Voluntary Contributions
        made by the Participant and shall (within the limits contained
        in the Plan) be allocated to the Participant's Voluntary
        Contribution Account; or 

               (b)     To the extent that the procedure set forth in
        subsection (a) of this Section is not elected by the Highly
        Compensated Participant, or if the Highly Compensated
        Participant makes or is deemed to have made Voluntary
        Contributions equal to the maximum amount permitted by the
        Plan (through contributions made pursuant to Article IV of the
        Plan, pursuant to the operation of subsection (a), or both),
        any portion of the amount so reduced pursuant to Section
        3.3(c) that is not allocated to the Participant's Voluntary
        Contribution Account pursuant to subsection (a) of this
        Section 3.4, adjusted for earnings, gains and losses allocable
        thereto for the Plan Year, pursuant to Section 401(k)(8) of
        the Code, shall be paid directly to the applicable Highly
        Compensated Participant.

        3.5.   TREATMENT OF ASSOCIATED MATCHING CONTRIBUTION.  Any
Matching Contribution that is associated with a Salary Reduction
Contribution made by the Company for a Highly Compensated
Participant that is reduced for a Plan Year pursuant to Section
3.3(c), shall continue to be treated as a Matching Contribution,
subject to Section 4.6.



OREGON METALLURGICAL CORPORATION SAVINGS PLAN                       PAGE 14
<PAGE>
        3.6.   DISTRIBUTIONS FROM SALARY REDUCTION CONTRIBUTION
ACCOUNTS.  Notwithstanding anything to the contrary contained
elsewhere in the Plan, a Participant's Salary Reduction
Contribution Account shall not be distributable other than upon:

               (a)     The Participant's separation from service, death, or
        disability;

               (b)     Termination of the Plan without establishment or
        maintenance of another defined contribution plan (other than
        an employee stock ownership plan as defined in Section
        4975(e)(7) of the Code);

               (c)     The date of the sale or other disposition by the
        Company to an unrelated entity of substantially all of the
        assets (within the meaning of Section 409(d)(2) of the Code)
        used by the Company in a trade or business of the Company,
        where (i) the Participant is employed by such trade or
        business and continues employment with the entity acquiring
        such assets, and (ii) the Company continues to maintain the
        Plan after the sale or other disposition. The sale of 85% of
        the assets used in the trade or business shall be deemed a
        sale of "substantially all" of the assets used in such trade
        or business;

               (d)     The date of the sale or other disposition by the
        Company of the Company's interest in a subsidiary (within the
        meaning of Section 409(d)(3) of the Code) to an unrelated
        entity, where (i) the Participant is employed by such
        subsidiary and continues employment with such subsidiary
        following such sale or other disposition, and (ii) the Company
        continues to maintain the Plan after the sale or other
        disposition;

               (e)     The Participant's attainment of age 59 1/2; or

               (f)     The Participant's hardship (as defined in Section
        6.5(a)).

        Notwithstanding anything to the contrary contained herein, an
        event shall not be treated as described in clause (b), (c) or
        (d) above with respect to any Participant unless the
        Participant receives a lump sum distribution (as defined in
        Section 401(k)(10)(B)(ii) of the Code) by reason of the event.

        3.7.   ACCOUNTING.  Each Participant's Salary Reduction
Contribution Account shall be accounted for separately from the
Participant's other accounts under the Plan.

        3.8.   SUPPLEMENTAL COMPANY CONTRIBUTIONS.  The Company may
contribute to the Trust with respect to any Plan Year a
Supplemental Company Contribution in such amount as the Board, in
its discretion, may determine by resolution adopted within 90 days
after the end of such Year.  Supplemental Company Contributions may
be made to the Salary Reduction Contribution Accounts of the
lowest-paid Participants only if, and to the extent that, such
Contributions are necessary to


OREGON METALLURGICAL CORPORATION SAVINGS PLAN                       PAGE 15
<PAGE>
satisfy one of the tests contained in Section 3.3(b) of the Plan. 
Supplemental Contributions shall only be made to that portion of
the Plan that has failed the ratio tests set forth in Section 3.3
(b), that is, the portion benefiting hourly employees subject to
the Collective Bargaining Agreement, or that portion benefiting
salaried employees not subject to the Collective Bargaining
Agreement.  The Supplemental Company Contribution for any Plan Year
shall be allocated to such Participants' Salary Reduction
Contribution Accounts pursuant to the provisions of Section 5.3 of
the Plan.  Upon allocation to the Salary Reduction Contribution
Accounts of such Participants, the Supplemental Company
Contribution shall be considered as Salary Reduction Contributions
for all purposes of the Plan other than for purposes of Section 6.5
of the Plan and for purposes of determining the amount of Matching
Contributions made on such Participant's behalf pursuant to Section
4.2, and shall be subject to all of the provisions of the Plan
regarding Salary Reduction Contributions.  The Company shall pay to
the Trustee its Supplemental Company Contribution with respect to
a particular Plan Year within 90 days after the end of such Plan
Year.


                           ARTICLE IV

                       OTHER CONTRIBUTIONS

        4.1.   COMPANY DISCRETIONARY CONTRIBUTIONS.  The Company may
contribute to the Trust for each Plan Year such amount, if any, as
the Board may determine by resolution adopted prior to the date of
filing of the Company's federal income tax return for such Year
including extensions thereof duly granted.  Such amount shall be
referred to as the "Company Discretionary Contribution" for such
Year.  The Company shall pay to the Trustee its Company
Discretionary Contribution with respect to a particular Plan Year
within the period of time prescribed by law for the filing of the
Company's federal income tax return for such Year, including
extensions thereof duly granted.

        4.2.   MATCHING CONTRIBUTIONS.

               (a)     For the duration of the Collective Bargaining
        Agreement entered into in 1994, the Company shall contribute
        to the Trust for each Participant a Matching Contribution in
        an amount equal to a certain percent, as established by the
        Board, of the amount designated by such Participant pursuant
        to a Salary Reduction Agreement and deducted from his Earnings
        through payroll deductions during such Plan Year.  
                       The following schedule shall govern Matching
Contributions:



OREGON METALLURGICAL CORPORATION SAVINGS PLAN                    PAGE 16
<PAGE>
                                         Match (To a Maximum 100% of 3% of
Percent Return on Equity in Prior Year      Participant's Compensation)

         Less than 3%                              25%
            3-6%                                   50%
            6-10%                                  75%
       Greater than 10%                           100%

                       Matching Contributions shall be held in trust
        uninvested by the Company and shall not accrue Earnings until
        remitted to the Trustee, which shall be during or as soon as
        practicable following the Valuation Date.  

                       Matching Contributions shall only be made to
        Participants employed by the Company  as of the last day of
        the Plan Year.

                       In no event will such Matching Contribution exceed
        (a) Three percent (3%) of a Participant's Compensation or (b)
        the Participant's Salary Reduction.  For years when the
        Company's Return on Equity is zero or negative, the Company,
        in the discretion of the Board, may suspend such Matching
        Contribution, or continue them at a level set by the Board. 
        Matching Contributions shall be subject to the special rules
        set forth in Section 4.6 below.

                       The Company may establish additional levels of
        Matching Contributions in its discretion.

               (b)     Matching Contributions made with respect to a Plan
        Year or any part thereof pursuant to this Section 4.2 shall in
        no event be made later than the time prescribed by law for
        filing the income tax return of the Company for the fiscal
        year of the Company (including extensions thereto) which
        corresponds to such Plan Year.  However, the Company may elect
        to make such contributions on a quarterly basis, although it
        shall not be required to do so.

               (c)     Matching Contributions to the Trust under the Plan
        shall be made in cash or other property as the Company, in its
        discretion, shall determine, although it is expected that all
        such contributions will be made in equity stock of the
        Company, and for all purposes of the Plan "Equity Matching
        Contributions" shall mean "Matching Contributions".

        4.3.   EQUITY CONTRIBUTIONS.

               (a)     For the duration of the Collective Bargaining
        Agreement entered into in 1994, the Company shall contribute
        to the Trust .125 shares of Oremet common


OREGON METALLURGICAL CORPORATION SAVINGS PLAN                    PAGE 17
<PAGE>
        stock for each hour worked by an hourly employee subject to
        the Collective Bargaining Agreement with the United
        Steelworkers of America, Local 7150, and one (1) share of
        Oremet common stock for each day worked by a salaried employee
        not subject to such Collective Bargaining Agreement.

                       Equity contributions shall be held in trust
        uninvested by the Company and shall not accrue earnings until
        remitted to the Trustee, which shall be during or as soon as
        practicable following the Valuation Date.

               (b)     Equity contributions made with respect to a Plan
        Year or any part thereof pursuant to this Section 4.3 shall in
        no event be made later than the time prescribed by law for
        filing the income tax return of the Company for the fiscal
        year of the Company (including extensions thereto) which
        correspond to such Plan Year.  However, the Company may elect
        to make such contributions on a quarterly basis, although it
        shall not be required to do so.

               (c)     Equity contributions to the trust under the Plan
        shall be made in cash or other property as the Company, in its
        discretion, shall determine, although it is expected that all
        such contributions will be made in equity stock of the
        Company.

               (d)     Equity contributions shall be regarded as qualified
        Non-Elective Contributions under the Code.

        4.4    VOLUNTARY CONTRIBUTIONS.  Each Participant may elect, by
executing a form provided by the Committee, to contribute to the
Trust Fund an amount which does not exceed fifteen percent (15%),
of his Compensation.  The Committee shall establish the time of
admission and periods within which election forms must be received. 
A Participant who has elected to make Voluntary Contributions may
suspend his contributions at any time, by giving advance written
notice to the Committee on a form provided by the Committee. 
Following a suspension of contributions, the Participant may not
resume making contributions until the next admission period.  All
voluntary Contributions shall be credited with the earnings and
losses of the Trust Fund in the manner and at the times set forth
in Section 5.8 of the Plan.

               The Committee shall establish such rules and procedures
for the acceptance of, manner of accounting for, distribution of
Voluntary Contributions, and earnings thereon, as it shall deem
advisable.

        4.5.   LIMITATIONS ON Contributions.  Notwithstanding anything
to the contrary in Sections 3.1, 3.8, 4.1 or 4.2 in no event shall:
(i) the aggregate amount of such Contributions contributed by the
Company pursuant to this Plan exceed the maximum deduction
allowable by Section 404(a)(3)(A) of the Code; or (ii) the Company
contribute an amount for any Limitation Year which would cause: 
(a) the Annual Additions to the accounts of any Participant to
exceed the Maximum Permissible Amount for such Participant for that
Year (except as provided in Section 5.6(b); or (b)



OREGON METALLURGICAL CORPORATION SAVINGS PLAN                         PAGE 18
<PAGE>
the sum of the defined benefit plan fraction and the defined
contribution plan fraction (as such terms are defined in Section
5.6) to exceed one for any Participant for that Year. All
contributions made by the Company under the Plan are conditioned
upon the qualification of the Plan under Section 401 of the Code
and deductibility of the contribution under Section 404 of the
Code.

        4.6.   RULES GOVERNING MATCHING CONTRIBUTIONS AND VOLUNTARY
CONTRIBUTIONS.

               (a)     Notwithstanding any provisions of the Plan to the
        contrary, the Actual Contribution Percentage of Highly
        Compensated Participants shall bear to the Actual Contribution
        Percentage for all other Participants a relationship that
        satisfies either of the following tests:

                       (i)     The Actual Contribution Percentage for Highly
               Compensated Participants is not more than the Actual
               Contribution Percentage for all other Participants
               multiplied by 1.25; or

                       (ii)    The Actual Contribution Percentage for Highly
               Compensated Participants is not more than the Actual
               Contribution Percentage for all other Participants
               multiplied by two and the excess of the Actual
               Contribution Percentage for the group of Highly
               Compensated  Participants  over  that of all  other
               Participants is not more than two percentage points.

               (b)     If, at the end of any Plan Year, neither of the
        tests set forth in subsection (a) is satisfied for such Year,
        then the Matching Contributions made for such Year on behalf
        of Highly Compensated Participants and the Voluntary
        Contribution made for such year by Highly Compensated
        Participants shall be reduced in the manner set forth in this
        subsection (b) to the extent necessary to comply with one of
        the tests set forth in subsection (a). Reductions pursuant to
        the preceding sentence shall be effected with respect to
        Highly Compensated Participants pursuant to the following
        procedure:  The Actual Contribution Percentage of the Highly
        Compensated Participant with the highest Actual Contribution
        Percentage shall be reduced to the extent necessary to cause
        such Highly Compensated Participant's Actual Contribution
        Percentage to equal the Actual Contribution Percentage of the
        Highly Compensated Participant with the next highest Actual
        Contribution Percentage. This process shall be repeated until
        the Plan satisfies one of the tests set forth in subsection
        (a) for such Plan Year. 

               (c)     Voluntary Contributions made by Participants who are
        not Highly Compensated Participants and Matching Contributions
        made on account of Participants who are not Highly Compensated
        Participants shall be valid and shall not be affected by this
        Section.  The unvested portion of Matching Contributions that
        is reduced pursuant to the preceding provisions of this
        Section for the Plan Year, adjusted for earnings, gains and
        losses allocable thereto pursuant to Section 401(m)



OREGON METALLURGICAL CORPORATION SAVINGS PLAN                      PAGE 19
<PAGE>
        of the Code for such Plan Year, shall be returned to the
        Company and the reduced Voluntary Contributions and the vested
        portion of such reduced Matching Contributions, adjusted for
        earnings, gains and losses allocable thereto shall be paid
        directly to the applicable Participant.  Voluntary
        Contributions shall be reduced first, and to the extent
        necessary, Vested Matching Contributions shall be reduced
        thereafter.  If the vested portion of the Matching
        Contributions Account of the Participant is not sufficient to
        satisfy the necessary reduction, the nonvested portion of such
        Matching Contributions Account shall be forfeited pursuant
        Section 6.4 to the extent necessary to satisfy such reduction. 
        The calculations, reductions, allocations and payments
        required by this Section shall be made by the Committee with
        respect to a Plan Year at any time prior to the close of the
        following Plan Year.

               (d)     If at any time during the Plan Year the Committee,
        it its sole discretion, determines that neither of the tests
        set forth in subsection (a) of this Section 4.6 may be met for
        such Plan Year, then:

                       (i)     The Committee shall have the unilateral right
               during the Plan Year to require the prospective
               reduction, for the balance of the Year, or any part
               thereof, of the percentage of Earnings of Highly
               Compensated Participants that may be contributed as
               Voluntary Contributions. Such reductions shall be made to
               the extent necessary, in the discretion of the Committee,
               to assure that one of the tests set forth in subsection
               (a) of this Section 4.6 shall be met for the Plan Year
               and shall be based upon estimates made from data
               available to the Committee at any time during the Plan
               Year.

                       (ii)    Reductions pursuant to (i) above shall be
               effected with respect to Highly Compensated Participants
               pursuant to the following procedure: The Actual
               Contribution Percentage of the Highly-Compensated
               Participant with the highest Actual Contribution
               Percentage shall be reduced to the extent necessary to
               cause such Highly Compensated Participant's Actual
               Contribution Percentage to equal the Actual Contribution
               Percentage of the Highly Compensated Participant with the
               next highest Actual Contribution Percentage. This process
               shall be repeated to the extent necessary to assure that
               one of the tests set forth in subsection (a) shall not be
               exceeded for such Plan Year.

               (e)     If a "Multiple Use of the Alternative Limitation"
        occurs in a Plan Year, then, notwithstanding any other
        provision of Section 3.3 or of this Section 4.6, the test in
        paragraph (a)(ii) of this Section shall not be used to satisfy
        the requirements of this Section for Voluntary Contributions
        and Matching Contributions


OREGON METALLURGICAL CORPORATION SAVINGS PLAN                       PAGE 20
<PAGE>
        in the same Plan Year that the test contained in Section
        3.3(b)(ii) is used to satisfy the requirements of Section 3.3
        with respect to Salary Reduction Contributions.  If the
        preceding sentence shall be applicable for a Plan Year, then
        the Committee shall determine whether to use the test in
        paragraph (a)(ii) of this Section to satisfy the requirements
        of this Section 4.6, or to use the test in paragraph (b)(ii)
        of Section 3.3 to satisfy the requirements of Section 3.3, for
        such Plan Year.

                       A Multiple Use of the Alternative Limitation shall
        occur in any Plan Year if all of the following conditions are
        satisfied in the Plan Year.

               (1)     At least one Highly Compensated Participant is
        eligible to authorize Salary Reduction Contributions to be
        made on his behalf; and to make Voluntary Contributions or
        have Matching Contributions allocated to his Matching
        Contributions Account, pursuant to the Plan during such Plan
        Year.

               (2)     The sum of the Actual Deferral Percentage of the
        entire group of Highly Compensated Participants and of the
        Actual Contribution Percentage of the entire group of Highly
        Compensated Participants for such Plan Year exceeds the
        greater of A and B below:

        A.     The sum of:

                       (i)     125% of the greater of (I) the Actual Deferral
               Percentage of the group of Participants for such Plan
               Year who are not Highly Compensated Participants, or (II)
               the Actual Contribution Percentage of the group of
               Participants who are not Highly Compensated Participants
               for such Plan Year, and

                       (ii)    Two plus the lesser of (I) or (II) above. In no
               event, however, shall this amount exceed 200% of the
               lesser of (I) or (II) above;

        B.     The sum of:

                       (i)     125% of the lesser of (I) the Actual Deferral
               Percentage of the group of Participants who are not
               Highly Compensated Participants for such Plan Year, or
               (II) the Actual Contribution Percentage of the group of
               Participants who are not Highly Compensated Participants
               for such Plan Year, and

                       (ii)    Two plus the greater of (I) or (II) above. In
               no event, however, shall this amount exceed 200% of the
               greater of (I) or (II) above.



OREGON METALLURGICAL CORPORATION SAVINGS PLAN                          PAGE 21
<PAGE>
               (3)     The Actual Deferral Percentage of the entire group
        of Highly Compensated Participants exceeds the amount
        described in Section 3.3(b)(i); and

               (4)     The Actual Contribution Percentage of the entire
        group of Highly Compensated Participants exceeds the amount
        described in Section 4.6(a)(i).

        4.7.   EXCLUSIVE BENEFIT OF EMPLOYEES.  All contributions made
pursuant to the Plan shall be held by the Trustee in accordance
with the terms of the Trust Agreement for the exclusive benefit of
those Employees who are Participants under the Plan, including
former Employees and their Beneficiaries, and shall be applied to
provide benefits under the Plan and to pay expenses of
administration of the Plan and the Trust, to the extent that such
expenses are not otherwise paid. At no time prior to the
satisfaction of all liabilities with respect to such Employees and
their Beneficiaries shall any part of the Trust Fund (other than
such part as may be required to pay administration expenses and
taxes), be used for, or diverted to, purposes other than for the
exclusive benefit of such Employees and their Beneficiaries.
However, without regard to the provisions of this Section 4.7.

               (a)     If a contribution under the Plan is conditioned on
        initial qualification of the Plan under Section 401(a) of the
        Code, and the Plan receives an adverse determination with
        respect to its initial qualification, the Trustee shall, upon
        written request of the Company, return to the Company the
        amount of such contribution (increased by earnings
        attributable thereto and reduced by losses attributable
        thereto) within one calendar year after the date that
        qualification of the Plan is denied, provided that the
        application for the determination is made by the time
        prescribed by law for filing the Company's return for the
        taxable year in which the Plan is adopted, or such later date
        as the Secretary of the Treasury may prescribe;

               (b)     If a contribution is conditioned upon the
        deductibility of the contribution under Section 404 of the
        Code, then, to the extent the deduction is disallowed, the
        Trustee shall upon written request of the Company return the
        contribution (to the extent disallowed) to the Company within
        one year after the day the deduction is disallowed;

               (c)     If a contribution or any portion thereof is made by
        the Company by a mistake of fact, the Trustee shall, upon
        written request of the Company, return the contribution or
        such portion to the Company within one year after the date of
        payment to the Trustee; and

               (d)     Earnings attributable to amounts to be returned to
        the Company pursuant to subsection (b) or (c) above shall not
        be returned, and losses attributable to amounts to be returned
        pursuant to subsection (b) or (c) shall reduce the amount to
        be so returned.



OREGON METALLURGICAL CORPORATION SAVINGS PLAN                      PAGE 22
<PAGE>
        4.8.   TRANSFERS FROM QUALIFIED PLANS.

               (a)     With the consent of the Administrator, amounts may
        be transferred from other qualified plans by Participants,
        provided that the trust from which such funds are transferred
        permits the transfer to be made and the transfer will not
        jeopardize the tax exempt status of the Plan or trust, or
        create adverse tax consequences for the Employer.  Transfers
        of Oremet Common Stock from the Oremet Employee Stock
        Ownership Plan ("ESOP") shall not be permitted; however, cash
        transfers from the ESOP shall be permitted if allowed under
        terms of the ESOP.  The amounts transferred shall be set up in
        a separate account herein referred to as a "Participant's
        Rollover Account".  Such account shall be fully vested at all
        times and shall not be subject to Forfeiture for any reason.

               (b)     Amounts in a Participant's Rollover Account shall be
        held by the Trustee pursuant to the provisions of this Plan
        and may not be withdrawn by, or distributed to the
        Participant, in whole or in part, except as provided in
        paragraphs (c) and (d) of this Section.

               (c)     Except as permitted by Regulations (including
        Regulation 1.411(d)-4), amounts attributable to elective
        contributions (as defined in Regulation 1.401(k)-1(g)(3),
        including amounts treated as elective contributions, which are
        transferred from another qualified plan in a plan-to-plan
        transfer shall be subject to the distribution limitations
        provided for in Regulation 1.401(k)-1(d).

               (d)             (i)  At Normal Retirement Date, or such other
                       date when the Participant or his Beneficiary shall
                       be entitled to receive benefits, the fair market
                       value of the Participant's Rollover Account shall
                       be used to provide additional benefits to the
                       Participant or his Beneficiary.  Any distributions
                       of amounts held in a Participant's Rollover Account
                       shall be made in a manner which is consistent with
                       and satisfies the provisions of this Plan,
                       including, but not limited to, all notice and
                       consent requirements of Code Sections 417 and
                       411(a)(11) and the Regulations thereunder. 
                       Furthermore, such amounts shall be considered as
                       part of a Participant's benefit in determining
                       whether an involuntary cash-out of benefits without
                       Participant consent may be made.

                               (ii)  Amounts transferred from the Oremet ESOP
                       shall be held in Participant's ESOP Rollover
                       Account and shall be distributed as provided in
                       Section 6.5(c).

               (e)     The Administrator may direct that Employee transfers
        made after a Valuation Date be segregated into a separate
        account for each Participant in a



OREGON METALLURGICAL CORPORATION SAVINGS PLAN                      PAGE 23
<PAGE>
        federally insured savings account, certificate of deposit in
        a bank or savings and loan association, money market
        certificate, or other short-term debt security acceptable to
        the Trustee until such time as the allocations pursuant to
        this Plan have been made, at which time they may remain
        segregated or be invested as part of the general Trust Fund,
        to be determined by the Administrator.

               (f)     All amounts allocated to a Participant's ESOP
        Account may be treated as a directed investment account, but
        only to the extent such rollover does not involve common stock
        of the Company.

               (g)     For purposes of this Section, the term "qualified
        plan" shall mean any tax qualified plan under Code Section
        401(a).  The term "amounts transferred from other qualified
        plans" shall mean:  (i) amounts transferred to this Plan
        directly from another qualified plan; (ii) distributions from
        another qualified plan which are eligible rollover
        distributions and which are either transferred by the Employee
        to this Plan within sixty (60) days following his receipt
        thereof or are transferred pursuant to a direct rollover;
        (iii) amounts transferred to this Plan from a conduit
        individual retirement account provided that the conduit
        individual retirement account has no assets other than assets
        which (A) were previously distributed to the Employee by
        another qualified plan as a lump-sum distribution (B) were
        eligible for tax-free rollover to a qualified plan and (C)
        were deposited in such conduit individual retirement account
        within sixty (60) days of receipt thereof and other than
        earnings on said assets; and (iv) amounts distributed to the
        Employee from a conduit individual retirement account meeting
        the requirements of clause (iii) above, and transferred by the
        Employee to this Plan within sixty (60) days of his receipt
        thereof from such conduit individual retirement account.

               (h)     Prior to accepting any transfers to which this
        Section applies, the Administrator may require the Employee to
        establish that the amounts to be transferred to this Plan meet
        the requirements of this Section and may also require the
        Employee to provide an opinion of counsel satisfactory to the
        Employer that the amounts to be transferred meet the
        requirements of this Section.

               (i)     This Plan shall not accept any direct or indirect
        transfers from a defined benefit plan, money purchase plan
        (including a target benefit plan), stock bonus or profit
        sharing plan which would otherwise have provided for a life
        annuity form of payment to the Participant.



OREGON METALLURGICAL CORPORATION SAVINGS PLAN                     PAGE 24
<PAGE>
               (j)     Notwithstanding anything herein to the contrary, a
        transfer directly to this Plan from another qualified plan (or
        a transaction having the effect of such a transfer) shall only
        be permitted if it will not result in the elimination or
        reduction of any "Section 411(d)(6) protected benefit" as
        described therein.


                            ARTICLE V

              ALLOCATIONS TO PARTICIPANTS' ACCOUNTS

        5.1.   SEPARATE ACCOUNTS.  The Committee shall create and
maintain such separate accounts for each Participant as shall be
needed or convenient, including, initially, a Company Discretionary
Contribution Account, a Salary Reduction Contribution Account, an
Equity Contribution Account, an Equity Bonus Contribution Account
(if applicable), an ESOP (or other) Rollover Account and a Matching
Contribution Account. The Committee shall also create and maintain
a Suspense Account in the event that such an account is required
pursuant to Section 5.6.  Such accounts are primarily for
accounting purposes and do not require a segregation of the Trust
Fund.  The Company may delegate the responsibility for the
maintenance of the accounts to the Trustee or to the Committee. 
Notwithstanding any provisions of this Article, in no event shall
an allocation be made to any account of any Participant, for any
Limitation Year that would cause: (a) Annual Additions to the
accounts of such Participant to exceed the Maximum Permissible
Amount for that Year (except as permitted in Section 5.6(b)); or
(b) the sum of the defined benefit Plan fraction (as defined in
Section 5.6) and the defined contribution Plan fraction (as defined
in Section 5.6) to exceed one for such Participant for that Year. 

        5.2.   ALLOCATIONS OF COMPANY DISCRETIONARY CONTRIBUTIONS AND
FORFEITURES. The Company Discretionary Contributions for each Plan
Year shall be allocated as of the last day of such Plan Year (even
though receipt of the Company Discretionary Contributions by the
Trustee may take place after the close of such Year) among the
Company Discretionary Contribution Accounts of each Participant
who, during the course of such Plan Year: (i) completed at least
1,000 Hours of Service and was employed by the Company on the last
day of such Plan Year; (ii) retired on or after his Normal
Retirement Date; (iii) died; or (iv) became disabled as defined in
Section 6.3.  Such allocation shall be in the ratio that such
Participant's Compensation (as defined in Section 1.13 of the Plan)
during the Plan Year bears to the total Compensation during such
Plan Year of all Participants entitled to share in such
contributions. 

        5.3.   ALLOCATION TO SALARY REDUCTION CONTRIBUTION ACCOUNTS.

               (a)     Salary Reduction Contributions made on behalf of a
        Participant for a Plan Year shall be allocated to his Salary
        Reduction Contribution Account as of the last day of such
        Valuation Date (even though receipt of the Salary Reduction
        Contribution by the Trustee may take place after the close of
        such Valuation Date).  The amount of the allocation to a
        Participant's Salary Reduction Contribution



OREGON METALLURGICAL CORPORATION SAVINGS PLAN                       PAGE 25
<PAGE>
        Account shall be equal to (i) the amount by which the
        Participant's Earnings from the Company were reduced during
        the Valuation Period pursuant to such Participant's Salary
        Reduction Agreement in effect for such Period, reduced by (ii)
        any applicable amounts pursuant to the provisions of Sections
        3.1(b) and 3.3(c).

               (b)     In the event that the Company elects to make a
        Supplemental Company Contribution with respect to any Plan
        Year, such Contribution shall be allocated to the Salary
        Reduction Contribution Accounts of certain Participants who
        are not Highly Compensated and who are eligible to share in
        the Company Discretionary Contribution pursuant to Section 5.2
        of the Plan, starting with the lowest paid 5% of such
        Participants and continuing with the remaining such
        Participants in groups of 5% in the inverse order of their
        Compensation until the Supplemental Company Contribution has
        been entirely allocated.  Supplemental Company Contributions
        made for a Plan Year shall be allocated to Participants'
        Salary Reduction Contribution Accounts as of the last day of
        such Year (even though receipt of the Supplemental Company
        Contribution by the Trustee may take place after the close of
        such Year).

        5.4.   ALLOCATION OF MATCHING CONTRIBUTIONS. Matching
Contributions made on behalf of a Participant for a Valuation
Period pursuant to Section 4.2 and not reduced pursuant to Section
4.6, shall be allocated to his Matching Contributions Account as of
the last day of the Valuation Date (even though receipt of the
Matching Contributions by the Trustee may take place after the
close of such Valuation Period). An allocation pursuant to this
Section shall be made only to the Matching Contributions Account of
a Participant whose Earnings were reduced through payroll
deductions pursuant to a Salary Reduction Agreement during the
applicable Plan Year.

        5.5.   ALLOCATION OF VOLUNTARY CONTRIBUTIONS AND FORFEITURES.  

               (a)     Voluntary Contributions made by a Participant, and
        not reduced pursuant to Section 4.6, shall be allocated to his
        Voluntary Contribution Account as of the Valuation Date
        coinciding with or immediately following receipt of such
        Contributions by the Trustee.

               (b)     As of each Annual Valuation Date, any amounts which
        become forfeitures since the last Valuation Date shall be made
        available to reinstate the previously forfeited account
        balances of former Participants, if any.  The remaining
        forfeitures, if any, shall be used to reduce the discretionary
        contribution or the matching contribution of the Company for
        the Plan Year in which such forfeitures occur and based on
        whether such forfeitures derive from the Discretionary
        Contribution Accounts or the Matching Contribution Accounts,
        respectively.



OREGON METALLURGICAL CORPORATION SAVINGS PLAN                       PAGE 26
<PAGE>
        5.6.   MAXIMUM ALLOCATION.

               (a)     Except as provided in paragraph (b) of this Section,
        the allocations to the accounts of any Participant in any
        Limitation Year shall be limited so that the Participant's
        Annual Additions for such Year do not exceed the Maximum
        Permissible Amount.

               (b)     If the foregoing limitation on allocations would be
        exceeded in any Limitation Year for any Participant as a
        result of (i) the allocation of forfeitures, (ii) reasonable
        error in estimating a Participant's Compensation, (iii)
        reasonable error in determining the amount of elective
        deferrals (within the meaning of Section 402(g)(3) of the
        Code) that may be made with respect to a Participant, or (iv)
        under such other limited facts and circumstances that the
        Commissioner of Internal Revenue, pursuant to Code Regulations
        <SUBSECTION> 1.415-6(b)(6), finds justify the availability of this
        Section 5.6, the Voluntary Contributions and Salary Reduction
        Contributions made by or with respect to such Participant
        shall be distributed to him to the extent that any such
        distribution would reduce the amount in excess of the limits
        of this Section 5.6 and any amount in excess of the limits of
        this Section 5.6 remaining after such distribution shall be
        placed, unallocated to any Participant, in a Suspense Account. 
        If a Suspense Account is in existence at any time during a
        particular Limitation Year, other than the Limitation Year
        described in the preceding sentence, all amounts in the
        Suspense Account must be allocated to Participants' accounts
        (subject to the limits of this Section 5.6) before any
        contributions which would constitute Annual Additions may be
        made to the Plan for that Limitation Year. The excess amount
        allocated pursuant to this Section 5.6(b) shall be used to
        reduce Company Discretionary Contributions and Matching
        Contributions for the next Limitation Year (and succeeding
        Limitation Years, as necessary) for that Participant. However,
        if that Participant is not covered by the Plan as of the end
        of the applicable Limitation Year, then the excess amounts
        must be held unallocated in the Suspense Account for the
        Limitation Year and allocated and reallocated in the next
        Limitation Year to all of the remaining Participants in the
        Plan. The Suspense Account will not share in the valuation of
        Participants' accounts and the allocation of earnings set
        forth in Section 5.8 of the Plan, and the change in fair
        market value and allocation of earnings attributable to the
        Suspense Account shall be allocated to the remaining accounts
        hereunder as set forth in Section 5.8.

               (c)     Any reduction in the contributions and allocations
        under this Plan made with respect to a Participant's accounts
        required pursuant to this Section 5.6 and Section 415 of the
        Code shall be effected, to the minimum extent necessary, in
        the following manner: (i) first, Voluntary Contributions made
        by such Participant, adjusted for earnings, gains and losses
        allocated thereto, shall be reduced (ii) next, the Salary
        Reduction Contributions that would have been made by the
        Company for the applicable Limitation Year with respect to the
        Participant, adjusted for earnings,



OREGON METALLURGICAL CORPORATION SAVINGS PLAN                         PAGE 27
<PAGE>
        gain and losses allocable thereto shall be reduced; (iii)
        next, Company Discretionary Contributions that would have been
        made by the Company for the applicable Limitation Year with
        respect to such Participant shall be reduced; and (iv)
        finally, the Matching Contributions that would have been made
        by the Company for the applicable Limitation Year with respect
        to such Participant shall be reduced.  The amount of any
        reductions in Voluntary Contributions and Salary Reduction
        Contributions pursuant to clauses (i) and (ii), adjusted for
        earnings, gains and losses allocable to Voluntary
        Contributions and Salary Reduction Contributions, shall be
        paid by the Trustee directly to the affected Participant
        pursuant to subsection (b) of this Section, and any reductions
        in Company Discretionary Contributions and Matching
        Contributions, pursuant to clauses (iii) and (iv), adjusted
        for gains, earnings, and losses allocable thereto, shall be
        treated pursuant to subsection (b) of this Section.

               (d)     Upon termination of the Plan, any amounts in a
        Suspense Account at the time of such termination shall revert
        to the Company.

               (e)     In the event that any Participant under this Plan is
        also a Participant in a defined benefit Plan (as defined in
        Section 415(k) of the Code) maintained by the Company, the sum
        of the defined benefit Plan fraction and the defined
        contribution Plan fraction (as such terms are defined in
        Section 415(e) of the Code) for any Limitation Year with
        respect to such Participant shall not exceed one. If that sum
        exceeds one, then no reduction in contributions or allocations
        to obtain compliance with Section 415(e) of the Code shall
        occur under this Plan until the Participant's benefits under
        such defined benefit Plan have been reduced pursuant to the
        terms thereof. Any reduction under this Plan shall be made
        only to the extent necessary so that the sum of such fractions
        shall equal one.  For purposes of this Section 5.6, a Plan is
        deemed to be maintained by the Company if the Plan is
        maintained by any Related Employer.

               (f)     If a Participant is entitled to receive an
        allocation under this Plan and any Related Plan and, in the
        absence of the limitations contained in this Section 5.6, the
        Company would contribute or allocate to the accounts of that
        Participant an amount for a Limitation Year that would cause
        the Annual Additions to the accounts of the Participant to
        exceed the Maximum Permissible Amount for such Year, then the
        contributions and allocations made with respect to the
        Participant under this Plan shall not be reduced until the
        contributions or allocations under the Related Plan have been
        reduced to the extent necessary so that the allocation of such
        Annual Additions does not exceed the Maximum Permissible
        Amount.

               (g)     The provisions of this Section shall be interpreted
        by the Committee, in the administration of the Plan, to reduce
        contributions and allocations (as required by this Section)
        only to the minimum extent necessary to reflect the
        requirements of



OREGON METALLURGICAL CORPORATION SAVINGS PLAN                       PAGE 28
<PAGE>
        Section 415 of the Code, as amended and in force from time to
        time, and Regulations promulgated pursuant to that Section,
        which are incorporated by reference herein.

        5.7.   VESTING.

               (a)     Each Participant shall have a vested interest in the
        Adjusted Balance of his Company Discretionary Contribution
        Account and Matching Contributions Account in accordance with
        the following formula:

<TABLE>
<CAPTION>
                                       Vested      Forfeitable
           Years of Service           Percentage   Percentage
           ________________           __________   ___________

           <S>                            <C>         <C>
           Less Than One Year               0%        100%
                One Year                   20%         80%
               Two Years                   40%         60%
              Three Years                  60%         40%
               Four Years                  80%         20%
           Five or More Years             100%          0%

</TABLE>

               (b)     On reaching Normal Retirement Date or Early
        Retirement Date, a Participant shall be 100% vested in the
        Adjusted Balance of the Participant's Company Discretionary
        Contribution Account and Matching Contribution Account.

               (c)     In the event a Participant dies or becomes disabled
        within the meaning of Section 6.2 or 6.3 while an Employee, he
        shall be 100% vested in the Adjusted Balance of his Company
        Discretionary Contribution Account and Matching Contributions
        Account as of the date of his death or disability.

               (d)     In the event the Plan is terminated, or upon the
        complete discontinuance of Company contributions to the Plan,
        each Participant shall become 100% vested in the Adjusted
        Balance of his Company Discretionary Contribution Account and
        Matching Contributions Account, provided that the forfeitable
        percentage of the unpaid balances of such accounts of a
        Participant whose employment has terminated and who has
        incurred a one-year Break in Service on the date of such Plan
        termination or discontinuance shall be forfeited on the
        effective date of such termination on discontinuance of
        contributions and shall not be vested.



OREGON METALLURGICAL CORPORATION SAVINGS PLAN                        PAGE 29
<PAGE>
               (e)     Each Participant shall at all times be fully vested
        in the Adjusted Balances of his Salary Reduction Contribution
        Account, Rollover Accounts, Equity Bonus Compensation Account
        (if applicable), and Equity Contribution Account.

        5.8.   ALLOCATIONS AND ADJUSTMENTS TO ACCOUNTS.  As of each
valuation Date, and subject to Section 8.4(e), the Trustee shall
determine, on an accrual basis of accounting, the Adjusted Balance
of the account of each Participant in the following manner:

               (a)     As soon as feasible after each Valuation Date, the
        Trustee shall determine the earnings and the amount of any
        realized or unrealized appreciation or depreciation in the
        fair market value of each of the Investment Funds, determined
        as of the Valuation Date or the next previous business day if
        the Valuation Date falls on a Saturday, Sunday, or holiday. In
        determining such value, the Trustee shall use such generally
        accepted methods and bases as the Trustee, in its discretion,
        shall deem advisable. The judgment of the Committee as to the
        fair market value of any asset shall be presumptively
        conclusive and binding on all persons.

               (b)     The earnings on contributions made or deemed made
        pursuant to Sections 3.1, 4.1, 4.2, 4.3 and 4.4 that have been
        initially invested in short-term investment obligations
        selected by the Trustee from time to time pending allocation
        to one or more of the Investment Funds shall be allocated to
        a Participant's applicable account in the same proportion as
        such contributions shall be determined by multiplying the
        total amount of such earnings by a fraction, the numerator of
        which is the amount of such contributions allocated to a
        Participant's account for the period ending on the applicable
        Valuation Date and the denominator of which is the total
        amount of such contributions allocated to all participants'
        accounts for that period.

               (c)     The earnings and market appreciation or depreciation
        of each Investment Fund for a period ending on a Valuation
        Date (including earnings and appreciation or depreciation
        attributable to the investment of any Suspense Account in such
        Investment Fund) shall be allocated to each applicable account
        (excluding any Suspense Account) that is invested in such
        Investment Fund on the current Valuation Date by multiplying
        the earnings and market appreciation or depreciation of such
        Fund by a fraction, the numerator of which is the Adjusted
        Balance of such account invested in the applicable Fund as of
        the prior Valuation Date and the denominator of which is the
        total of the Adjusted Balances of all such accounts (excluding
        any Suspense Account) invested in such Fund as of the prior
        Valuation Date.  Each such account (excluding any Suspense
        Account) shall be adjusted by adding thereto or subtracting
        therefrom its share of the earnings and market appreciation or
        depreciation of each Investment Fund as determined by the
        preceding sentence.



OREGON METALLURGICAL CORPORATION SAVINGS PLAN                     PAGE 30
<PAGE>
               (d)     Each account shall then be further adjusted by
        adding to it the amount of contributions allocable thereto,
        for each Participant's account pursuant to Sections 5.2, 5.3,
        5.4 and 5.5 for the Plan Year ending on that Valuation Date.

               (e)     Following the above adjustments to each account
        there shall be deducted from each account the distributions
        and withdrawals made therefrom since the prior Valuation Date.

        5.9.   INSTALLMENTS.  Whenever an account balance is
distributable in installments, if applicable, the undistributed
balance of such account shall participate in the valuation provided
in Section 5.8 until fully distributed. In lieu of such
participation, however, upon the written request of the former
Participant or Beneficiary entitled to receive such installments,
received by the Committee prior to the payment of the first
installment, the Adjusted Balance of his accounts shall be
deposited in the name of the Trustee in a savings account or
certificate of deposit in a national or state bank, or in a federal
savings and loan association and shall earn and be credited with
such earnings (at not less than the current rate of earnings paid
thereon by the depository). Any amounts deposited pursuant to this
Section 5.9 and any earnings thereon shall be disregarded in
computing the fair market value of Trust assets to be allocated
under Section 5.8 of the Plan and the Earnings shall be payable to
such former Participant or Beneficiary with payment of the
aforementioned installments.  Any expenses incurred by the Trustee
and the Committee as the result of any deposit made pursuant to
this Section shall be payable from the accounts of the former
Participant or Beneficiary for whom such deposit was made.

        5.10   VALUATION OF OREMET STOCK.  The value of Oremet stock for
contribution or allocation purposes shall be its closing value on
the day transfer instructions are issued to the transfer agent of
the Company with regard to such contribution.


                           ARTICLE VI

                       PAYMENT OF BENEFITS

        6.1.   PAYMENTS ON RETIREMENT.  A Participant who attains his
Normal Retirement Date and continues to be an Employee shall
continue to share in the allocation of Company Discretionary
Contributions, Supplemental Company Contributions, Salary Reduction
Contributions, Equity Contributions, Equity Bonus Compensation
Contributions, and Matching Contributions, and may elect or
continue to make Voluntary Contributions and may elect or continue
to enter into Salary reduction Agreements.  Upon the retirement of
a Participant at or after his Normal Retirement Date, the Committee
shall notify the Trustee in writing of the Participant's retirement
and shall direct the Trustee to make payment of the Adjusted
Balance of the Participant's accounts as of the Valuation Date
coinciding with or immediately preceding the date distribution is
made to the Participant in a method provided in the Plan.



OREGON METALLURGICAL CORPORATION SAVINGS PLAN                        PAGE 31
<PAGE>
        6.2    PAYMENTS ON DEATH.

               (a)     Upon the death of a Participant, the Committee shall
        promptly notify the Trustee in writing of the Participant's
        death and the name of his Beneficiary and shall direct the
        Trustee to make payment of the Adjusted Balance (reduced by
        any security interest held by the Plan by reason of a loan
        outstanding to the Participant) as of the date of his death
        pursuant to Article VIII of the Participant's accounts as of
        the Valuation Date coinciding with or immediately preceding
        the date distribution is made to his Beneficiary, in a method
        provided in the Plan.

               (b)     Each unmarried Participant or each married
        Participant whose surviving spouse has consented to an
        alternate Beneficiary designation or alternate method of
        payment as provided in subsection (c), shall have the right to
        designate, by giving a written designation to the Committee,
        (i) a person or persons or entity as Beneficiary to receive
        the death benefit provided under this Section 6.2 and (ii) the
        method of payment of such death benefit to his Beneficiary
        pursuant to Section 6.6. Successive designations may be made,
        and the last designation received by the Committee prior to
        the death of the Participant shall be effective and shall
        revoke all prior designations.  If a designated Beneficiary
        shall die before the Participant, the Beneficiary's interest
        shall terminate, and, unless otherwise provided in the
        Participant's designation if the designation included more
        than one Beneficiary, such interest shall be paid in equal
        shares to those Beneficiaries, if any, who survive the
        Participant.  A Participant to whom this subsection applies
        shall have the right to designate different Beneficiaries to
        receive the Adjusted Balance in his various accounts under the
        Plan and shall have the right to revoke the designation of any
        Beneficiary without the consent of the Beneficiary.

               (c)     The Beneficiary of each married Participant shall be
        the surviving spouse of the Participant and the death benefits
        of any Participant who is married at the date of his death
        shall be paid in full to his surviving spouse in a single lump
        sum. Notwithstanding the preceding sentence, the death
        benefits provided pursuant to subsection (a) shall be
        distributed to any other Beneficiary designated by a married
        Participant as provided in subsection (b) of this Section and
        pursuant to the method, if any, designated by the Participant
        as provided in subsection (b), if the Participant's surviving
        spouse consented to such designation by the Participant, prior
        to the date of the Participant's death, in writing.  Such
        consent must acknowledge the effect of the election and the
        identity of any nonsurviving spouse Beneficiary, including any
        class of Beneficiaries or contingent Beneficiaries, and must
        be witnessed by a representative of the Plan or a notary
        public.  The consent of the Participant's surviving spouse
        shall not be required if the Participant establishes to the
        satisfaction of the Committee that consent may not be obtained
        because there is no surviving spouse or the surviving spouse
        cannot be located, or because of such other circumstances as
        the Secretary of the Treasury may prescribe by regulations. 
        The


OREGON METALLURGICAL CORPORATION SAVINGS PLAN                      PAGE 32
<PAGE>
        Participant may not subsequently change the method of
        distribution elected by the Participant or the designation of
        his Beneficiary unless his surviving spouse consents to the
        new election or designation in accordance with the
        requirements set forth in the preceding sentence, or unless
        the surviving spouse's consent permits the Participant to
        change the election of method of payment or the designation of
        his Beneficiary without the spouse's further consent.  A
        spouse's consent shall be irrevocable.  Any consent by a
        surviving spouse, or establishment that the consent of the
        surviving spouse may not be obtained, shall be effective only
        with respect to that surviving spouse.

               (d)     If a Participant fails to designate a Beneficiary,
        if such designation is for any reason illegal or ineffective,
        or if no Beneficiary survives the Participant, his death
        benefits otherwise payable pursuant to subsection (b) or (c)
        shall be paid:

                       (i)     to his surviving spouse;

                       (ii)    if there is no surviving spouse, to his
               descendants (including legally adopted children or their
               descendants) per stirpes;

                       (iii)          if there is neither a surviving spouse nor
               surviving descendants, to the duly appointed and
               qualified executor or other personal representative of
               the Participant to be distributed in accordance with the
               Participant's will or applicable intestacy law; or

                       (iv)           if no such representative is duly
               appointed and qualified within six months after the date
               of death of such deceased Participant, then to such
               persons as, at the date of his death, would be entitled
               to share in the distribution of such deceased
               Participant's personal estate under the provisions of the
               applicable statute then in force governing the descent of
               intestate property, in the proportions specified in such
               statute.

               (e)     The Committee may determine the identity of the
        distributees of any death benefit payable under the Plan and
        in so doing may act and rely upon any information it may deem
        reliable upon reasonable inquiry, and upon any affidavit,
        certificate, or other paper believed by it to be genuine, and
        upon any evidence believed by it sufficient.

               (f)     A Participant's surviving spouse, for purposes of
        the Plan, is the person who is legally married to the
        Participant immediately prior to the death of the Participant.

        6.3.   PAYMENTS ON DISABILITY.  Upon the termination of a
Participant's employment with the Company by reason of a
disability, the Committee shall notify the Trustee in writing of
said



OREGON METALLURGICAL CORPORATION SAVINGS PLAN                      PAGE 33
<PAGE>
disability termination, and shall direct the Trustee to make
payment of the Adjusted Balance of the Participant's accounts as of
the Valuation Date coinciding with or immediately preceding the
date a distribution is made to the Participant, in a method
provided in the Plan.  For purposes of this Section "disability"
means a physical or mental condition which is expected to render
the Participant permanently unable to perform any duties for the
Company.  The determination of the existence of such disability
shall be made by the Committee and shall be final and binding upon
the Participant and all other parties.  The Committee may require
the submission of such medical evidence as it may deem necessary in
order to arrive at its determination.  The Committee's
determination of the existence of a disability will be made with
reference to the nature of the injury without regard to the period
the Participant is absent from work. 

        6.4.   PAYMENTS ON TERMINATION FOR OTHER REASONS.  Upon the
termination of a Participant's employment with the Company for any
reason other than retirement on or after his Normal Retirement
Date, death, or permanent disability, the Committee shall notify
the Trustee in writing of the termination and shall direct the
Trustee to make payment of the Adjusted Balance of his Salary
Reduction Contribution Account, if any, and the vested portion of
the Adjusted Balance of his Company Discretionary Contribution
Account and Matching Contributions Account, if any, as of the
Valuation Date coinciding with or immediately preceding the date
distribution is made to the Participant, in a method provided in
the Plan.  The vested portion of a Participant's Company
Discretionary Contribution Account and Matching Contributions
Account shall be determined in accordance with Section 5.7.  The
nonvested portion, if any, of the Adjusted Balance of his Company
Discretionary Contribution Account and Matching Contributions
Account shall be retained in his Company Discretionary Contribution
Account and Matching Contributions Account, respectively, until a
period has elapsed sufficient to determine whether he will be
reemployed or will incur five consecutive one-year Breaks in
Service.  If he is reemployed before he incurs five consecutive
one-year Breaks in Service, his Company Discretionary Contribution
Account and Matching Contributions Account will continue to vest;
if he incurs five consecutive one-year Breaks in Service, the
amount in such accounts shall be deemed a forfeiture and shall
reduce the Company Discretionary Contribution and the Matching
Contributions, whichever applies, as of the last day of the Plan
Year in which he incurs the last of such five consecutive one-year
Breaks in Service.  If a Participant who is rehired before he
incurs five consecutive one-year Breaks in Service again incurs a
termination of employment under circumstances in which he is not
fully vested in his Company Discretionary Contribution Account and
Matching Contributions Account, the portion of his Company
Discretionary Contribution Account and Matching Contributions
Account distributable on the date of his later termination of
employment shall be calculated as follows:

                       (i)     the amount distributed to the Participant from
               his Company Discretionary Contribution Account and
               Matching Contributions Account upon his earlier
               termination of employment shall be added to the Adjusted
               Balance of his Company Discretionary Contribution Account
               and Matching Contributions Account;



OREGON METALLURGICAL CORPORATION SAVINGS PLAN                      PAGE 34
<PAGE>
                       (ii)    the amount determined under paragraph (i) shall
               be multiplied by the vested percentage as of the date of
               his later termination of employment determined under
               Section 5.7; and

               (iii)           the amount distributed to the Participant upon
        his earlier termination of employment shall be deducted from
        the product calculated under paragraph (ii) to determine the
        amount distributable upon his later termination of employment.

        6.5.   PRETERMINATION DISTRIBUTIONS.

               (a)     The Committee may, upon the request of a Participant
        at any time prior to his termination of employment, direct the
        Trustee to make a lump sum distribution to the Participant
        from the portion of his Salary Reduction Contribution Account
        that is not being used as security for a loan under Section
        8.4, determined as of the Valuation Date coinciding with or
        immediately preceding the date a request is made hereunder,
        for the purposes set forth below, subject to the following
        rules:

                       (i)     Each request for a distribution must be made by
               written application to the Committee supported by such
               evidence as the Committee may require;

                       (ii)    In no event shall the amount distributed to a
               Participant in accordance with this Section 6.5 exceed
               100% of his Salary Reduction Contribution Account, not
               including any earnings thereon credited after December
               31, 1988;

                       (iii)          Each distribution made pursuant to this
               Section 6.5 shall be on account of a hardship suffered by
               the Participant. For purposes of this Section 6.5, a
               hardship shall be limited to:

                               (1)    Medical expenses described in Code
                       Section 213(d) previously incurred by the
                       Participant, the Participant's spouse, or any
                       dependents of the Participant (as defined in Code
                       Section 152); or necessary for any of these persons
                       to obtain medical care described in Code Section
                       213(d);

                               (2)    Purchase (excluding mortgage payments) of
                       a principal residence for the Participant;

                               (3)    Payment of tuition and related
                       educational fees for the next twelve months of
                       post- secondary education for the Participant, his
                       spouse, children or dependent;



OREGON METALLURGICAL CORPORATION SAVINGS PLAN                       PAGE 35
<PAGE>
                               (4)    The need to prevent eviction of the
                       Participant from his principal residence or
                       foreclosure on the mortgage of the Participant's
                       principal residence; and

                               (5)    Funeral expenses of a family member of
                       the Participant;

                       (iv)    The amount distributed shall not be in excess
               of the immediate and heavy financial need of the
               Participant which need shall be deemed to include any
               amounts reasonably anticipated by the Participant to be
               necessary to pay federal, state or local income taxes and
               penalties incurred as a result of the distribution;

                       (v)     The Participant shall first obtain all
               distributions, other than hardship distributions, and all
               nontaxable loans currently available under the Plan and
               all other plans maintained by the Company;

                       (vi)    The Participant's elective contributions and
               employee contributions (as defined in Regulations
               <SUBSECTION> 1.401(k)) shall be suspended under the Plan
               and all other deferred compensation plans maintained by
               the Company for 12 months after his receipt of the
               hardship distribution (except for mandatory employee
               contributions to a defined benefit plan);

                       (vii)          The Participant may not make elective
               contributions (as defined in Regulations <SUBSECTION>
               1.401(k)) under the Plan or any other Plan maintained by
               the Company for the Participant's taxable year
               immediately following the taxable year of the hardship
               distribution in excess of the applicable limit under Code
               Section 402(g) for such next taxable year less the amount
               of such Participant's elective contributions for the
               taxable year of the hardship distribution;

                       (viii)         The amount distributed to a Participant in
               accordance with this Section 6.5 shall not exceed (A) the
               Adjusted Balance of a Participant's Salary Reduction
               Contribution Account as of December 31, 1988, plus (B)
               Salary Reduction Contributions allocated to such Salary
               Reduction Contribution Account after December 31, 1988;
               and

                       (ix)    If a Participant's termination of employment
               occurs after a request is approved in accordance with
               this Section 6.5 but prior to distribution of the full
               amount approved, the approval of his request shall be
               automatically void and the benefits which he or his
               Beneficiary are entitled to receive under the Plan shall
               be distributed in accordance with the preceding
               provisions of this Article.



OREGON METALLURGICAL CORPORATION SAVINGS PLAN                        PAGE 36
<PAGE>
               (b)     A Participant who has attained the age of 59 1/2 may
        elect, by written instrument given to the Committee, to the
        extent such account is not being used as security for a loan
        as determined under Section 8.4 to withdraw from his Salary
        Reduction Contribution Account an amount not in excess of the
        Adjusted Balance thereof, determined as of the Valuation Date
        coinciding with or next succeeding the date the written
        instrument is delivered to the Committee.  No withdrawal made
        under this paragraph (b) shall be for an amount which is less
        than the lesser of: (i) $200, or (ii) the Adjusted Balance in
        the Participant's Salary Reduction Contribution Account.

               (c)     A Participant may elect by written instrument given
        to the Committee to withdraw from his ESOP Rollover Account an
        amount not in excess of the adjusted balance thereof,
        determined as of the Valuation Date coinciding with or next
        succeeding the date the written instrument is delivered to the
        Committee, and to the extent such account is not being used as
        security for a loan determined under Section 8.4.  No
        withdrawal under this paragraph (c) shall be for an amount
        which is less than the lesser of: (i) $200 or (ii) the 
        adjusted balance in the Participant's ESOP Rollover Account.

               (d)     A request for a distribution pursuant to this
        Section 6.5 shall be approved or denied by written instrument
        given by the Committee to the Participant within 60 days after
        the date the written request is given to the Committee by the
        Participant.  In the event that such request is approved, the
        distribution shall be made within 30 days after notice of
        approval is given by the Committee to the Participant.

        6.6.   METHODS OF PAYMENT.

               (a)     Whenever the Committee shall direct the Trustee to
        make payment to a Participant or his Beneficiary upon
        termination of the Participant's employment (whether by reason
        of retirement, death, disability, or for other reasons), the
        Committee shall direct the Trustee to pay the Adjusted Balance
        of his Salary Reduction Contribution Account, Voluntary
        Contributions Account, ESOP (or other) Rollover Account,
        Equity Contributions Account, and Equity Bonus Compensation
        Account (if applicable), and the vested portion of the
        Adjusted Balance of his Company Discretionary Contribution
        Account and Matching Contributions Account, to or for the
        benefit of the Participant or his Beneficiary, in cash or
        wholly or partly in kind, in the following way in a lump sum,
        provided that distributions in kind shall be valued at the
        fair market value of the assets distributed on the date of
        such distribution.



OREGON METALLURGICAL CORPORATION SAVINGS PLAN                       PAGE 37
<PAGE>
               (b)     In the case of a Participant whose employment has
        terminated for any reason payment shall be made or commence as
        soon as administratively feasible after the end of the first
        calendar quarter following the quarter in which the
        Participant terminates.  Notwithstanding the preceding
        sentence, if the Participant's account balances at the time
        for any distribution exceed $3,500, then neither such
        distribution nor any subsequent distribution shall be made to
        the Participant at any time before his 65th birthday without
        his written consent.

               (c)     Notwithstanding anything to the contrary contained
        elsewhere in the Plan a Participant's benefits under the Plan
        will be distributed to him not later than the Required
        Distribution Date (as defined in subsection (e)).  If the
        Participant dies before distribution has occurred,
        distribution will be made no later than five years after the
        Participant's death, unless the beneficiary is the
        Participant's spouse.

               (d)     If the Beneficiary is the surviving spouse of the
        Participant, the distribution shall not be earlier than the
        date on which the Participant would have attained age 70 1/2, and
        if the surviving spouse dies before the distributions to that
        spouse begin, then this subsection (d) shall be applied as if
        the surviving spouse were the Participant.

               (e)     For purposes of this Section, the Required
        Distribution Date means April 1 of the calendar year in which
        the Participant attains age 70 1/2, provided however that in the
        case of a Participant who attained age 70 1/2 during calendar
        year 1988 or 1989, the Required Distribution Date means April
        1, 1990, and further provided that, if the Participant
        attained age 70 1/2 prior to January 1, 1988, distribution shall
        commence on the April 1 following the later of the calendar
        year in which he: (A) attained age 70 1/2, or (B) terminated
        service with the Company and all Related Employers, unless he
        was a five-percent owner (as defined in Section 416 of the
        Code) of the Company with respect to the Plan Year ending in
        the calendar year in which he attained age 70 1/2, in which case
        clause (B) shall not apply.

               (f)     No Participant shall receive a distribution under
        circumstances that would impose an additional tax on such
        distribution pursuant to Section 72(t) of the Code unless and
        until that individual is notified in writing by the Committee
        of the tax and the individual, by writing delivered to the
        Committee, acknowledges receipt of the notification and
        requests the distribution.

               (g)     This subsection 6.6(g) applies to distributions made
        on or after January 1, 1993. Notwithstanding any provision of
        the Plan to the contrary that would otherwise limit a
        Distributee's election under this subsection, a Distributee
        may elect, at the time and in the manner prescribed by the
        Plan Administrator, to have any portion of an Eligible
        Rollover Distribution paid directly to an Eligible Retirement
        Plan specified by the Distributee in a Direct Rollover.



OREGON METALLURGICAL CORPORATION SAVINGS PLAN                        PAGE 38
<PAGE>
                       (i)     Definitions.

                                      (A)     "Eligible Rollover Distribution"
                               is any distribution of all or any portion of the
                               balance to the credit of the Distributee,
                               except that an Eligible Rollover Distribution
                               does not include: Any distribution that is one
                               of a series of substantially equal periodic
                               payments (not less frequently than annually)
                               made for the life (or life expectancy) of the
                               Distributee or the joint lives (or joint life
                               expectancies) of the Distributee  and  the 
                               Distributee's  designated Beneficiary, or for
                               a specified period of ten years or more; any
                               distribution to the extent such distribution
                               is required under Section 401(a)(9) of the
                               Code; and the portion of any distribution that
                               is not includable in gross income (determined
                               without regard to the exclusion for net
                               unrealized appreciation with respect to
                               employer securities).

                                      (B)     "Eligible Retirement Plan is an
                               individual retirement account described in
                               Section 408(a) of the Code, an individual
                               retirement annuity described in Section 408(b)
                               of the Code, an annuity plan described in
                               Section 403(a) of the Code, or a qualified
                               trust described in Section 401(a) of the Code,
                               that accepts the Distributee's eligible
                               rollover distribution.  However, in the case
                               of an Eligible Rollover Distribution to the
                               Surviving Spouse, an Eligible Retirement Plan
                               is an individual retirement account or
                               individual retirement annuity.

                                      (C)     "Distributee" includes an Employee
                               or former Employee.  In addition, the
                               Employee's or former Employee's Surviving
                               Spouse and the Employee's or former Employee's
                               spouse or former spouse who is the alternate
                               payee under a qualified domestic relations
                               order, as defined in Section 414(p) of the
                               Code, are Distributees with regard to the
                               interest of the spouse or former spouse.

                                      (D)     "Direct Rollover" is a payment by
                               the Plan to the Eligible Retirement Plan
                               specified by the Distributee. 


OREGON METALLURGICAL CORPORATION SAVINGS PLAN                         PAGE 39
<PAGE>
                       (ii)    If a distribution is one to which Sections
                       401(a)(11) and 417 of the Code do not apply, such
                       distribution may commence less than 30 days after
                       the notice required under Regulation 1.411(a)-11(c)
                       is given, provided that:

                               (A)    The Committee clearly informs the
                       Participant that the Participant has a right to a
                       period of at least 30 days after receiving the
                       notice to consider the decision of whether or not
                       to elect a distribution (and, if applicable, a
                       particular distribution option); and

                               (B)    The Participant, after receiving the
                       notice, affirmatively elects a distribution.

        6.7.   DISTRIBUTION OF UNALLOCATED EMPLOYEE CONTRIBUTIONS.

               (a)     If on the date of termination of a Participant's
        employment, the Company shall be holding Voluntary
        Contributions made by the Participant, but not yet allocated
        to his Voluntary Contribution Account, the Committee shall
        direct the Company to pay such amounts either directly to the
        Participant (or his Beneficiary, as the case may be) or to the
        Trustee, to be distributed by the Trustee in accordance with
        the method of distribution determined under Section 6.6.

               (b)     If on the date of termination of a Participant's
        employment, a Participant's Earnings have been reduced by any
        amount pursuant to a Salary Reduction Agreement, and such
        amount has not yet been allocated to his Salary Reduction
        Contribution Account, the Committee shall direct the Company
        to pay such amounts to the Trustee to be credited to the
        Participant's Salary Reduction Contribution Account, to be
        distributed by the Trustee in accordance with the method of
        distribution determined under Section 6.6.

        6.8.   ADMINISTRATIVE POWERS RELATING TO PAYMENTS.  If a
Participant or Beneficiary is under a legal disability or, by
reason of illness or mental or physical disability, is in the
opinion of the Committee unable properly to attend to his personal
financial matters, the Trustee may make such payments in such of
the following ways as the Committee shall direct:

                       (i)     directly to such Participant or Beneficiary;

                       (ii)    to the legal representative of such Participant
               or Beneficiary; or


OREGON METALLURGICAL CORPORATION SAVINGS PLAN                       PAGE 40
<PAGE>
                       (iii)   to some relative by blood or marriage, or
               friend, for the benefit of such Participant or
               Beneficiary.

Any payment made pursuant to this Section shall be in complete
discharge of the obligation therefor under the Plan.

        6.9.   WITHDRAWALS FROM VOLUNTARY CONTRIBUTION ACCOUNT.  A
Participant may withdraw from his Voluntary Contribution Account an
amount not in excess of the Adjusted Balance thereof, determined as
of the Valuation Date coinciding with or immediately succeeding the
date a request is being made hereunder, that is not being used as
security for a loan under Section 8.4.  No withdrawal made under
this Section 6.9 shall be for an amount which is less than the
lesser of: (i) $200, or (ii) the Adjusted Balance in the
Participant's Voluntary Contribution Account.

        6.10   INVESTMENT PENDING DISTRIBUTION.  The Committee, in its
discretion, may direct the Trustee to invest the Accounts of a
terminated Participant in a money-market or similar type of
investment.


                           ARTICLE VII

                       PLAN ADMINISTRATION

        7.1.   COMPANY RESPONSIBILITY.  The Company shall be responsible
for and shall control and manage the operation and administration
of the Plan. It shall be the "Plan Administrator" and "Named
Fiduciary" for purposes of ERISA and shall be subject to service of
process on behalf of the Plan.  The Board may, in its discretion,
appoint a Committee of one or more persons, to be known as the
"Plan Administrative Committee" to act as the agent of the Company
in performing these duties.  In the event that the Board chooses
not to appoint such a Committee, all references in the Plan to the
"Committee" (except for such references in this Section 7.1) shall
mean the Board.  The members of the Committee shall serve at the
pleasure of the Board; they may be officers, directors, or
Employees of the Company or any other individuals.  Any member may
resign by delivering his written resignation to the Board and to
the Committee.  Vacancies in the Committee arising by resignation,
death, removal or otherwise, shall be filed by the Board.  The
Company shall advise the Trustee in writing of the names of the
members of the Committee and of changes in membership from time to
time.

        7.2.   POWERS AND DUTIES OF COMMITTEE.  The Committee shall
administer the Plan in accordance with its terms and shall have all
powers necessary to carry out the provisions of the Plan. The
Committee shall direct the Trustee concerning all payments which
shall be made out of the Trust pursuant to the Plan.  The Committee
shall interpret the Plan and shall determine all questions arising
in the administration, interpretation, and application of the Plan,
including but not limited to, questions of eligibility and the
status and rights of Participants, Beneficiaries and other persons. 
Any such determination by the Committee shall presumptively be
conclusive and binding on all


OREGON METALLURGICAL CORPORATION SAVINGS PLAN                       PAGE 41
<PAGE>
persons. The regularly kept records of the Company shall be
conclusive and binding upon all persons with respect to an
Employee's Hours of Service, date and length of employment, time
and amount of Compensation and the manner of payment thereof, type
and length of any absence from work and all other matters contained
therein relating to Employees.  All rules and determinations of the
Committee shall be uniformly and consistently applied to all
persons in similar circumstances.

        7.3.   ORGANIZATION AND OPERATION OF COMMITTEE.

               (a)     The Committee shall act by majority vote of its
        members at the time in office, and such action may be taken
        either by a vote at a meeting or in writing without a meeting. 
        The signatures of a majority of the members will be sufficient
        to authorize Committee action.  A Committee member shall not
        participate in discussions of or vote upon matters pertaining
        to his own participation in the Plan.

               (b)     The Committee may authorize any of its members or
        any other person to execute any document or documents on
        behalf of the Committee, in which event the Committee shall
        notify the Trustee in writing of such action and the name or
        names of such member or person.  The Trustee thereafter shall
        accept and rely upon any document executed by such members or
        persons as representing action by the Committee, until the
        Committee shall file with the Trustee a written revocation of
        such designation.

               (c)     The Committee may adopt such bylaws and regulations
        as it deems desirable for the conduct of its affairs and with
        the consent of the President or Vice President, Finance of the
        Company, may appoint such accountants, counsel, specialists,
        and other persons as it deems necessary or desirable in
        connection with the administration of this Plan.  The
        Committee shall be entitled to rely conclusively upon, and
        shall be fully protected in any action taken by it in good
        faith in relying upon, any opinions or reports which shall be
        furnished to it by any such accountant, counsel, specialist or
        other person.

        7.4.   RECORDS AND REPORTS OF COMMITTEE.  The Committee shall
keep a record of all its proceedings and acts and shall keep all
such books of account, records, and other data as may be necessary
for proper administration of the Plan.  The Committee shall notify
the Trustee and the Company of any action taken by the Committee
and, when required, shall notify any other interested person or
persons.

        7.5.   CLAIMS PROCEDURE.  Claims for benefits under the Plan
shall be made in writing to the Committee.  In the event a claim
for benefits is wholly or partially denied by the Committee, the
Committee shall, within a reasonable period of time, but not later
than 90 days after receipt of the claim, notify the claimant in
writing of the denial of the claim.  If the claimant shall not be
notified in writing of the denial of the claim within 90 days after
it is received by the Committee, the claim shall be deemed denied. 
A notice of denial shall be written in a manner calculated to be
understood



OREGON METALLURGICAL CORPORATION SAVINGS PLAN                      PAGE 42
<PAGE>
by the claimant, and shall contain (i) the specific reason or
reasons for denial of the claim, (ii) a specific reference to the
pertinent Plan provisions upon which the denial is based, (iii) a
description of any additional material or information necessary for
the claimant to perfect the claim, together with an explanation of
why such material or information is necessary, and (iv) an
explanation of the Plan's review procedure.  Within 60 days of the
receipt by the claimant of the written notice of denial of the
claim, or within 60 days after the claim is deemed denied as set
forth above, if applicable, the claimant may file a written request
with the Committee that it conduct a full and fair review of the
denial of the claimant's claim for benefits, including the
conducting of a hearing, if deemed necessary by the Committee.  In
connection with the claimant's appeal of the denial of his benefit,
the claimant may review pertinent documents and may submit issues
and comments in writing.  The Committee shall render a decision on
the claim appeal promptly, but not later than 60 days after the
receipt of the claimant's request for review, unless special
circumstances (such as the need to hold a hearing, if necessary),
require an extension of time for processing, in which case the
60-day period may be extended to 120 days.  The Committee shall
notify the claimant in writing of any such extension.  The decision
upon review shall (i) include specific reasons for the decision,
(ii) be written in a manner calculated to be understood by the
claimant and (iii) contain specific references to the pertinent
Plan provisions upon which the decision is based.

        7.6.   COMPENSATION AND EXPENSES OF COMMITTEE.  The members of
the Committee shall serve without Compensation for services as
such, but all proper expenses incurred by the Committee incident to
the functioning of the Plan shall be paid by the Company, provided,
however, that reasonable Compensation or expenses of administering
the Plan shall be borne by, and paid out of the Plan assets, except
to the extent the Board elects to have such expenses paid directly
by the Company.

        7.7.   INDEMNITY OF COMMITTEE MEMBERS.  The Company shall
indemnify and defend each member of the Committee and each of its
other Employees against any and all claims, loss, damages, expenses
(including reasonable attorney fees), and liability arising in
connection with the administration of the Plan, except when the
same is judicially determined to be due to the gross negligence or
willful misconduct of such member or other Employee.

        7.8    VOTING RIGHTS AND STOCK DISPOSITIONS.  

               (a)     Governing Provisions.  The voting, tendering, sale
        or other disposition of Oremet Stock held in the Trust (except
        in connection with a distribution) shall be governed by this
        Section 7.8.

               (b)     Participant Directions. 

                       (i)     Each Participant or Beneficiary shall have the
               right, with respect to Oremet Stock allocated to any of
               his Accounts, and, separately, shares allocated to
               accounts for which the Trustee has not received timely
               voting instructions and, if applicable, unallocated



OREGON METALLURGICAL CORPORATION SAVINGS PLAN                       PAGE 43
<PAGE>
               shares, ("Non-Directed Shares"), to direct the Trustee as
               to the manner in which (x) to vote such Oremet Stock in
               any matter put to a shareholder vote; and (y) to respond
               to a tender or exchange offer or any other offer to
               dispose of stock held in the Trust.  As to Non-Directed
               Shares, the Trustee shall vote, tender, exchange, sell or
               dispose of the Oremet Stock based on the following
               formula:  Total number of Non-Directed Shares multiplied
               by a fraction, the numerator of which is the number of
               Shares credited to the voting Participant's Account and
               the denominator of which is the total number of Shares
               credited to the Accounts of all Participants who have
               provided timely directions to the Trustee.

                       (ii)    With respect to shares of Company Stock
               allocated to the account of a deceased Participant such
               Participant's Beneficiary, as Named Fiduciary, shall be
               entitled to direct the voting of shares of Company Stock
               as if such Beneficiary were the Participant.

                       (iii)          In the event a tender offer shall be
               received by the Trustee and instructions shall be
               solicited from Participants pursuant to this Section 7.8
               (b) regarding such offer, and prior to termination of
               such offer, another offer is received by the Trustee for
               the securities subject to the first offer, the Trustee
               shall use its best efforts under the circumstances to
               solicit instructions from the Participants to the Trustee
               (x) with respect to securities tendered for sale,
               exchange or transfer pursuant to the first offer, whether
               to withdraw such tender, if possible, and, if withdrawn,
               whether to tender any securities so withdrawn for sale,
               exchange or transfer pursuant to the second offer and (y)
               with respect to securities not tendered for sale,
               exchange or transfer pursuant to the first offer, whether
               to tender or not to tender such securities for sale,
               exchange or transfer pursuant to the second offer.  The
               Trustee shall follow all such instructions received in a
               timely manner from Participants in the same manner and in
               the same proportion as provided in Section 7.8 (b) (i). 
               With respect to any further offer for any Company Stock
               received by the Trustee and subject to any earlier offer
               (including successive offers from one or more existing
               offerors), the Trustee shall act in the same manner as
               described above.

                       (iv)    A participant's instructions to the Trustee to
               tender or exchange shares of Company Stock will not be
               deemed a withdrawal or suspension from the Plan or a
               forfeiture of any portion of the Participant's interest
               in the Plan.  Funds received in exchange for tendered
               shares will be credited to the account of the Participant



OREGON METALLURGICAL CORPORATION SAVINGS PLAN                        PAGE 44
<PAGE>
               whose shares were tendered and will be used by the
               Trustee to purchase Company Stock, as soon as
               practicable.  In the interim, the Trustee will invest
               such funds in short-term investments permitted under the
               Plan, and in the same manner in which forfeited amounts
               are invested.

                       (v)     In the event the Company initiates a tender or
               exchange offer, the Trustee may, in its sole discretion,
               enter into an agreement with the Company not to tender or
               exchange any shares of Company Stock in such offer, in
               which event the foregoing provisions of this Section 7.8
               shall have no effect with respect to such offer, and the
               Trustee shall not tender or exchange any shares of
               Company Stock in such offer.

               (c)     INFORMATION.  On any matter in which a Participant
        (or Beneficiary) is entitled to direct the Trustee under this
        Section 7.8, the Trustee shall solicit such directions by
        distributing to each Participant and Beneficiary to whose
        Account Oremet Stock has been allocated, such information as
        shall be distributed to shareholders of Oremet generally in
        connection with a shareholder vote, tender, exchange or other
        offer, together with any additional information the Trustee
        deems appropriate in order for each Participant (or
        Beneficiary) to give proper directions to the Trustee.  The
        directions received from any Participant (or Beneficiary)
        shall be held in confidence by the Trustee, and shall not be
        individually divulged or released to any person, including
        officers or employees of Oremet or the Union.  Any costs
        incurred in connection with obtaining directions shall be
        treated as expenses of the Plan for the purposes of Section
        7.8.


                          ARTICLE VIII

                      LOANS TO PARTICIPANTS

        8.1.   LOANS TO PARTICIPANTS.

               (a)             The Committee shall direct the Trustee to make
        a loan or loans to active Participants and, to the extent not
        inconsistent with Section 401 (a) of the Code, to former
        Participants who are Parties in Interest (as defined in <SUBSECTION>
        3(14) of ERISA) and who retain account balances in the Plan
        following termination of employment ("Former Participants"),
        applied for pursuant to the terms of this Article. Such loans
        shall be in amounts that do not in the aggregate exceed the
        amount set forth in Section 8.2.  Loans shall be made on the
        written application of the Participant to the Committee and on
        such terms and conditions as are set forth in this Section and
        Sections 8.2 and 8.3.  In making such loans the Committee
        shall pursue uniform


OREGON METALLURGICAL CORPORATION SAVINGS PLAN                         PAGE 45
<PAGE>
        policies and shall not discriminate in favor of or against any
        Participant or group of Participants.

               (b)     Loans shall be made only from the Participant's
        Salary Reduction Contribution Account, Voluntary Contribution
        Account and ESOP (or other) Rollover Account, and the
        Participant shall specify in his loan application the
        Investment Funds in which such accounts are invested, from
        which any loan shall be paid and the allocation of the loan
        proceeds among such Investment Funds; provided that such
        allocation shall be in increments of one percent.  Each such
        loan shall be made in accordance with the specification of the
        borrowing Participant or former Participant except that, if
        any Investment Fund imposes any restriction or penalty on a
        distribution as a loan, the loan shall be paid from the
        Investment Funds in such manner as will comply with the
        restriction and avoid the penalty.

               (c)             The Committee may impose such additional
        uniform and nondiscriminatory requirements upon Participants
        and Former Participants applying for loans as the Committee
        may determine.

        8.2.   MAXIMUM LOAN AMOUNT.

               (a)     In no event shall any loan made pursuant to this
        Article to any Participant or Former Participant be in an
        amount that shall cause the outstanding aggregate balance of
        all loans made to such Participant or Former Participant under
        this Plan and all other qualified employer plans (as defined
        in Section 72(p)(4) of the Code without regard to subparagraph
        (2)(D) thereof) maintained by the Company or any Related
        Employer to exceed the lesser of:

                       (i)     $50,000, reduced by the excess (if any) of:

                               (A)    the highest outstanding balance of loans
                       from the Plan and such other qualified plans to the
                       Participant during the one-year period ending on
                       the day before the date such loan is made, over

                               (B)    the outstanding balance of loans from the
                       Plan and such other qualified plans to the
                       Participant on the date on which such loan is made,
                       or

                       (ii)    50% of the vested portion of the Adjusted
               Balance of such Participant's or former Participant's
               Salary Reduction Contribution Account, Company
               Discretionary Contribution Account, Matching Contribution
               Account, and Equity Contribution Account.



OREGON METALLURGICAL CORPORATION SAVINGS PLAN                      PAGE 46
<PAGE>
                       Notwithstanding the preceding provisions of this
               Subsection (a), in no event shall any loan exceed 100% of
               a Participant's Salary Reduction Contribution Account,
               Voluntary Contribution Account and ESOP (or other)
               Rollover Account.

               (b)     For purposes of this Article, the balances of a
        borrowing Participant's or Former Participant's accounts shall
        be determined as of the Valuation Date for which a valuation
        of his accounts is most recently available on the date on
        which the proceeds of a loan made under this Article are
        disbursed to the borrowing Participant.

        8.3.   REPAYMENT OF LOANS.  All loans made under this Article
shall mature and be payable in full within five years alter the
date such loan is made, except that a loan to a Participant used to
acquire any dwelling unit that within a reasonable time alter the
loan is made is to be used (determined at the time the loan is
made) as the principal residence of the Participant shall mature
and be payable in full within ten years after the date such loan is
made.

        8.4.   TERMS.

               (a)     Loans to Participants shall be made according to the
        following terms:

                       (i)     The minimum security for such loans shall be:

                                      (A)  50% of the vested portion of the
                               Adjusted Balance of the Salary Reduction
                               Contribution Account, Voluntary Contribution
                               Account, Company Discretionary Contribution
                               Account, Matching Contributions Account,
                               Equity Bonus Compensation Account (if
                               applicable), and Equity Contribution Account
                               of the borrowing Participant, plus (B) in the
                               discretion of the Committee, a security
                               interest in such other property, determined by
                               the Committee, that would be required in the
                               case of an otherwise identical transaction in
                               a normal commercial setting between unrelated
                               parties on arm's-length terms;

                       (ii)    Interest shall be determined by the Committee
               at the time the loan is made and shall be charged at a
               rate that is commensurate with the interest rate charged
               by persons in the business of lending money for loans
               that would be made under similar circumstances in the
               local geographical area;

                       (iii)          Payments of principal and interest by an
               active Participant shall be made through payroll
               deductions, which deductions shall be


OREGON METALLURGICAL CORPORATION SAVINGS PLAN                     PAGE 47
<PAGE>
               irrevocably authorized by the borrowing Participant in
               writing on a form supplied by the Committee or Trustee at
               the time the loan is made to him, and such payroll
               deductions shall be sufficient to amortize the principal
               and interest payable pursuant to the loan during the term
               thereof on a substantially level basis in equal quarterly
               (or more frequent) installments.  Payments of principal
               and interest by a Former Participant shall be made by
               personal check in equal quarterly (or more frequent)
               installments.  All payments of principal and interest
               shall be allocated to the accounts of the Participant or
               Former Participant to whom the loan was made;

                       (iv)    The borrowing Participant or Former Participant
               shall have the right to prepay all or any portion of the
               interest and principal of such loan without penalty;

                       (v)     The loans shall be evidenced by such forms of
               obligations, and shall be made upon such additional terms
               as to default, prepayment, security and otherwise as the
               Committee shall determine;

                       (vi)    The Committee may charge a borrowing
               Participant or Former Participant such reasonable
               administrative fees with respect to each loan as the
               Committee shall, in its discretion, decide; and

                       (vii)          If the borrowing Participant or Former
               Participant is married at the time for disbursement of
               the loan proceeds, disbursement may not be made unless
               such Participant's or Former Participant's spouse
               consents in writing to the loan and the terms thereof
               pursuant to procedures established by the Committee.

               (b)     The entire unpaid balance of any loan made under
        this Article and all interest due thereon, including all
        arrearages thereon, shall, at the option of the Committee,
        immediately become due and payable without further notice or
        demand, if, with respect to the borrowing Participant or
        Former Participant, any of the following events of default occurs:

                       (i)     any payments of principal or accrued interest
               on the loan remain due and unpaid for a period of ten
               days after the same becomes due and payable under the
               terms of the loan;

                       (ii)    a proceeding in bankruptcy, receivership, or
               insolvency is commenced by or against the borrowing
               Participant or Former Participant;

                       (iii)          an active Participant's employment with
               the Company terminates and he does not become a Former
               Participant;


OREGON METALLURGICAL CORPORATION SAVINGS PLAN                          PAGE 48
<PAGE>
                       (iv)    the borrowing Participant becomes a Former
               Participant and thereafter receives a final distribution
               of the Adjusted Balance of his accounts;

                       (v)     the borrowing Participant or Former Participant
               attempts to make an assignment, for the benefit of
               creditors, of any security for the loan; or

                       (vi)           the borrowing Participant or Former
               Participant marries or remarries and his new spouse does
               not consent in writing to the loan and the terms thereof
               pursuant to procedures established by the Committee
               within 30 days after marrying the Participant.

     Any payments of principal or interest on the loan not paid
when due shall bear interest thereafter, to the extent permitted by
law, at the rate specified by the terms of the loan.  The payment
and acceptance of any sum or sums at any time on account of the
loan after an event of default, or any failure to act or enforce
the rights granted hereunder upon an event of default, shall not be
a waiver of the right of acceleration set forth in this paragraph.

               (c)             If an event of default and an acceleration of
        the unpaid balance of the loan and interest due thereon shall
        occur, the Committee shall have the right to direct the
        Trustee to pursue any remedies available to a creditor at law
        or under the terms of the loan, including the right to execute
        on the security for the loan. Notwithstanding the preceding
        sentence, in no event shall either the Trustee or the
        Committee reduce the amount in the Participant's Salary
        Reduction Contribution Account at any time prior to the first
        to occur of the termination of the Participant's employment
        with the Company or the Participant's attainment of age 59 1/2.

               (d)     If (i) an event of default (specified in Section
        8.4(b)) occurs; and (ii) an event occurs pursuant to which the
        Participant or Former Participant, his estate or his
        Beneficiaries will receive a distribution from the Salary
        Reduction Contribution Account, Discretionary Contribution
        Account, Matching Contributions Account, or Equity
        Contribution Account of such Participant or Former Participant
        under the provisions of the Plan, then such Participant or
        Former Participant, if living, shall pay to the Trustee an
        amount equal to the portion of the loan or loans then
        outstanding, including all accrued interest thereon in
        accordance with Section 8.4(b), and such Participant or Former
        Participant shall thereafter receive the full amount of the
        distribution under the provisions of the Plan to which he is
        otherwise entitled.  If such Participant or Former Participant
        is not then living, or if such Participant or Former
        Participant does not make full payment of the portion of the
        loan or loans then outstanding within 15 days after the date
        of the event of default, then the unpaid balance of the loan
        or loans will be deemed to be distributed to the



OREGON METALLURGICAL CORPORATION SAVINGS PLAN                      PAGE 49
<PAGE>
        borrowing Participant, to the extent such a distribution would
        be allowed under the terms of the Plan, on the last date by
        which full payment should have been made.  The amount of the
        deemed distribution will be deducted from the borrowing
        Participant's applicable Accounts and paid to the Trustee as
        payment on the loan or loans.  No subsequent distribution
        shall be made to a Participant, or Former Participant, or his
        estate or his spouse or his Beneficiaries from his Salary
        Reduction Contribution Account, Discretionary Contribution
        Account, Matching Contributions Account, or Equity
        Contribution Account in an amount greater than the excess of
        the portion of his Salary Reduction Contribution Account,
        Discretionary Contribution Account, Matching Contributions
        Account, or Equity Contribution Account otherwise
        distributable over the aggregate of the deemed distribution.

               (e)             All loans made pursuant to this Article shall
        be funded from the borrowing Participant's or Former
        Participant's Salary Reduction Contribution Account, Voluntary
        Contribution Account and ESOP (or other) Rollover Account.  As
        set forth in Section 8.1(b), the Salary Reduction Contribution
        Account of a Participant or a Former Participant shall, to the
        extent used to fund such loan, not participate in the
        allocation of Earnings and losses pursuant to Section 5.8. 
        All interest paid by a Participant or a Former Participant
        with respect to a loan shall be credited to the borrowing
        Participant's or Former Participant's Salary Reduction
        Contribution Account, Voluntary Contribution Account and ESOP
        (or other)  Rollover Account and shall not be allocated
        pursuant to Section 5.8 as Earnings of the Investment Funds. 
        All payments of principal and interest made by a Participant
        or Former Participant with respect to a loan shall be
        allocated to one or more of the Investment Funds based upon
        the form relating to the selection of Investment Funds that is
        in effect, at the time such payment is received by the
        Trustee, with respect to the Participant's Salary Reduction
        Contributions, Voluntary Contribution Account and ESOP (or
        other) Rollover Account.  If such a form is not in effect at
        the time such payment is received, the payments shall be
        allocated based upon the last such form that was in effect for
        such Participant or Former Participant.


                           ARTICLE IX

                        INVESTMENT FUNDS

        9.1.   INVESTMENT FUNDS.  The Adjusted Balance of each
Participant's Salary Reduction Contribution Account, Voluntary
Contribution Account and ESOP (or other) Rollover Account will be
invested in the various Investment Funds.


OREGON METALLURGICAL CORPORATION SAVINGS PLAN                    PAGE 50
<PAGE>
        9.2.   INITIAL INVESTMENT.  All Salary Reduction Contributions,
Voluntary Contributions and ESOP (or other) Rollovers received by
the Trustee will be initially invested in such short-term
investment obligations as selected by the Trustee as directed by
the Committee from time to time pending investment pursuant to
Section 9.3.  These deposits and Earnings will be allocated between
the Investment Funds as of the Valuation Date next following
receipt by the Trustee of such deposits and Earnings in accordance
with Participants' selection of Investment Funds pursuant to
Section 9.3.

        9.3.   SELECTION OF INVESTMENT FUNDS.

               (a)     Each Participant shall have the right to file a form
        with the Committee directing that his Salary Reduction
        Contributions, Voluntary Contributions and ESOP (or other)
        Rollovers be invested, in specified multiples as determined by
        the Committee, in any one of the Investment Funds.  In default
        of any Participant's direction, such contributions will be
        invested in each, or any one,  of the Investment Funds
        described in the schedule attached hereto until a form
        designating a different Investment Fund is submitted to the
        Committee and forwarded to the Trustee.

               (b)     Each Participant shall have the right to file a
        written form with the Committee modifying the direction made
        in subsection (a) with respect to subsequent Salary Reduction
        Contributions, Voluntary Contribution Account and ESOP (or
        other) Rollover Account under the Plan.

               (c)     Each Participant shall have the right to file a
        written form with the Committee directing that the portion of
        his Salary Reduction Contribution Account, Voluntary
        Contribution Account and ESOP (or other) Rollover Account held
        in any one Investment Fund be transferred, in whole or in
        part, to any other Investment Fund.  This direction shall be
        made by designating the percentage of the Adjusted Balance of
        such accounts that is to be divided among the various
        applicable Funds in multiples as determined by the Committee.

               (d)     Any written form submitted pursuant to subsections
        (a), (b) or (c) shall be filed with the Committee, pursuant to
        rules it establishes, within a time period to be established
        by the Committee.  The initial allocation to an Investment
        Fund pursuant to subsection (a) or subsection (b) or a
        reallocation among Investment Funds pursuant to subsection (c)
        shall be made as of the effective date of the form submitted
        pursuant to this subsection (d) or as soon as reasonably
        possible after such date. 
     
               (e)     The Committee will maintain individual accounts
        representing the interests of Participants in the several
        Investment Funds. Each Investment Fund may be invested as a
        single fund, however, without segregation of Fund assets to
        the accounts of Participants.



OREGON METALLURGICAL CORPORATION SAVINGS PLAN                     PAGE 51
<PAGE>
               (f)     All contributions in-kind of shares of Company Stock
        made as Company Discretionary Contributions, Equity Matching
        Contributions, Equity Bonus Compensation (if applicable), and
        Equity Contributions or with respect to any other accounts
        hereafter created, shall be held in the general trust fund by
        the Trustee under provisions of the Trust Agreement and shall
        not be subject to individual Participant investment direction
        unless authorized by the Company.


                            ARTICLE X

                    AMENDMENT AND TERMINATION

        10.1.          AMENDMENT OF PLAN.  The Company shall have the right
to amend the Plan at any time and from time to time by resolution
of its Board of Directors, and all Employees and persons claiming
any interest hereunder shall be bound thereby; provided, however,
that no amendment shall have the effect of: (i) directly or
indirectly divesting the interest of any Participant in any amount
that he would have received had he terminated his employment with
the Company immediately prior to the effective date of such
amendment, or the interest of any Beneficiary as such interest
existed immediately prior to the effective date of such amendment,
(ii) directly or indirectly affecting the vesting schedule set
forth in Section 5.7 used to determine the vested interest of a
Participant on the effective date of the amendment unless the
conditions of <SUBSECTION> 203(c) of ERISA are satisfied; (iii) vesting in
the Company any right, title or interest in or to any Plan assets;
(iv) causing or effecting discrimination in favor of officers,
shareholders, or highly compensated Employees;  or (v) causing any
part of the Plan assets to be used for any purpose other than for
the exclusive benefit of the Participants and their Beneficiaries.

        10.2.          VOLUNTARY TERMINATION OF OR PERMANENT DISCONTINUANCE
OF CONTRIBUTIONS TO THE PLAN.  The Company expects the Plan to be
permanent, but since future conditions affecting the Company cannot
be anticipated, the Company shall have the right to terminate the
Plan in whole or in part, or to permanently discontinue
contributions to the Plan, at any time by resolution of its Board
and by giving written notice of such termination or permanent
discontinuance to the Trustee.  Such resolution shall specify the
effective date of termination or permanent discontinuance, which
shall not be earlier than the first day of the Plan Year which
includes the date of the resolution.

        10.3.          INVOLUNTARY TERMINATION OF PLAN.  The Plan shall
automatically terminate if the Company is legally adjudicated a
bankrupt, makes a general assignment for the benefit of creditors,
or is dissolved.  In the event of the merger or consolidation of
the Company with or into any other corporation, or in the event
substantially all of the assets of the Company shall be transferred
to another corporation, the successor corporation resulting from
the consolidation or merger, or transfer of such assets, as the
case may be, shall have the right to adopt and continue the Plan
and succeed to the position of the Company hereunder.  If, however,
the Plan is not so adopted within 90 days after the effective date
of such consolidation, merger or sale, the Plan shall automatically
be deemed terminated as of the effective date of such transaction. 
Nothing in this Plan shall prevent the


OREGON METALLURGICAL CORPORATION SAVINGS PLAN                    PAGE 52
<PAGE>
dissolution, liquidation, consolidation or merger of the Company,
or the sale or transfer of all or substantially all of its assets.

        10.4.          PAYMENTS ON TERMINATION OF OR PERMANENT
DISCONTINUANCE OF CONTRIBUTIONS TO THE PLAN.  If the Plan is
terminated as herein provided, or if it should be partially
terminated, or upon the complete discontinuance of Company
contributions to the Plan, the following procedure shall be
followed, except that, in the event of a partial termination, it
shall be followed only in cases of those Participants and
Beneficiaries directly affected:

                       (i)     The Committee may continue to administer the
               Plan, but if it fails to do so, its records, books of
               account and other necessary data shall be turned over to
               the Trustee and the Trustee shall act on its own motion
               as hereinafter provided.

                       (ii)    Notwithstanding any other provisions of the
               Plan, all interests of Participants shall become fully
               vested and nonforfeitable.

                       (iii)          The value of the Trust and the shares of
               all Participants and Beneficiaries shall be determined as
               of the date of termination or discontinuance.

                       (iv)           Distribution to Participants and
               Beneficiaries shall be made at such time after
               termination of or discontinuance of contributions to the
               Plan as shall be determined by the Committee (or the
               Trustee if no Committee is then acting) not later than
               the time specified in Section 6.6.


                           ARTICLE XI

                          MISCELLANEOUS

        11.1.          DUTY TO FURNISH INFORMATION AND DOCUMENTS. 
Participants and their Beneficiaries must furnish to the Committee
and the Trustee such evidence, data or information as the Committee
considers necessary or desirable for the purpose of administering
the Plan, and the provisions of the Plan for each person are upon
the condition that he will furnish promptly full, true, and
complete evidence, data, and information requested by the
Committee.  All parties to, or claiming any interest under, the
Plan hereby agree to perform any and all acts, and to execute any
and all documents and papers, necessary or desirable for carrying
out the Plan and the Trust.

        11.2.          COMMITTEE'S ANNUAL STATEMENTS AND AVAILABLE
INFORMATION.  The Committee shall advise Employees of the
eligibility requirements and benefits under the Plan.  As soon as
practicable after making the annual valuations and allocations
provided for in the Plan, and at such other times as the Committee
may determine, the Committee shall provide each Participant, and
each former


OREGON METALLURGICAL CORPORATION SAVINGS PLAN                    PAGE 53
<PAGE>
Participant and Beneficiary with respect to whom an account is
maintained, with a statement reflecting the current status of his
Accounts, including the Adjusted Balance thereof.  No Participant,
except a member of the Committee, shall have the right to inspect
the records reflecting the account of any other Participant.  The
Committee shall make available for inspection at reasonable times
by Participants and Beneficiaries copies of the Plan, any
amendments thereto, the Plan summary, and all reports of Plan
operations required by law.

        11.3.          NO ENLARGEMENT OF EMPLOYMENT RIGHTS.  Nothing
contained in the Plan shall be construed as a contract of
employment between the Company and any person, nor shall the Plan
be deemed to give any person the right to be retained in the employ
of the Company or limit the right of the Company to employ or
discharge any person with or without cause, or to discipline any
Employee.

        11.4.          APPLICABLE LAW.  All questions pertaining to the
validity, construction and administration of the Plan shall be
determined in conformity with the laws of Oregon to the extent that
such laws are not preempted by ERISA and valid Regulations
published thereunder. 

        11.5.          NO GUARANTEE.  Neither the Trustee, the Committee,
nor the Company in any way guarantees the Trust Fund from loss or
depreciation or the payment of any benefits that may be or become
due to any person from the Trust Fund.  No Participant or other
person shall have any recourse against the Trustee, the Company or
the Committee if the Trust Fund is insufficient to provide Plan
benefits in full.  Nothing herein contained shall be deemed to give
any Participant, former Participant, or Beneficiary an interest in
any specific part of the Trust Fund or any other interest except
the right to receive benefits out of the Trust Fund in accordance
with the provisions of the Plan.

        11.6.          UNCLAIMED FUNDS.  Each Participant shall keep the
Committee informed of his current address and the current address
of his Beneficiary or Beneficiaries. None of the Company, the
Committee and the Trustee shall be obligated to search for the
whereabouts of any person.  If the location of a Participant is not
made known to the Committee within three years after the date on
which distribution of the Participant's accounts may first be made,
distribution may be made as though the Participant had died at the
end of the three-year period.  If, within one additional year after
such three-year period has elapsed, or, within three years after
the actual death of a Participant, the Committee is unable to
locate any individual who would receive a distribution under the
Plan upon the death of the Participant pursuant to Section 6.2 of
the Plan, the Adjusted Balance in the Participant's accounts shall
be deemed a forfeiture and shall be used to reduce Company
Discretionary Contributions and Matching Contributions to the Plan
for the Plan Year next following the year in which the forfeiture
occurs; provided, however, that in the event that the Participant
or a Beneficiary makes a claim for any amount that has been
forfeited, the benefits which have been forfeited shall be
reinstated.



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<PAGE>
        11.7.          MERGER OR CONSOLIDATION OF PLAN.  Any merger or
consolidation of the Plan with another plan, or transfer of Plan
assets or liabilities to any other plan, shall be effected in
accordance with such Regulations, if any, as may be issued pursuant
to <SUBSECTION> 208 of ERISA, in such a manner that each Participant in the
Plan would receive, if the merged, consolidated or transferee Plan
were terminated immediately following such event, a benefit that is
equal to or greater than the benefit he would have been entitled to
receive if the Plan had terminated immediately before such event.

        11.8.          INTEREST NONTRANSFERABLE.  Except as provided in
Article VIII and in this Section, no interest of any person or
entity in, or right to receive distributions from, the Trust Fund
shall be subject in any manner to sale, transfer, assignment,
pledge, attachment, garnishment, or other alienation or encumbrance
of any kind; nor may such interest or right to receive
distributions be taken, either voluntarily or involuntarily, for
the satisfaction of the debts of, or other obligations or claims
against, such person or entity, including claims in bankruptcy
proceedings.  The account of any Participant, however, shall be
subject to and payable in accordance with the applicable
requirements of any qualified domestic relations order, as that
term is defined in Section 414(p) of the Code, and the Committee
shall direct the Trustee to provide for payment from a
Participant's account in accordance with such order and with the
provisions of Section 414(p) of the Code and any Regulations
promulgated thereunder.  A payment from a Participant's account may
be made to an alternate payee (as defined in Section 414(p)(8) of
the Code) prior to the date the Participant reaches his earliest
retirement age (as defined in Section 414(p)(4)(B) of the Code) if
such payments are made pursuant to the terms of a qualified
domestic relations order.  All such payments pursuant to a
qualified domestic relations order shall be subject to reasonable
rules and regulations promulgated by the Committee respecting the
time of payment pursuant to such order and the valuation of the
Participant's account or accounts from which payment is made;
provided that all such payments are made in accordance with such
order and Section 414(p).  The balance of an account that is
subject to any qualified domestic relations order shall be reduced
by the amount of any payment made pursuant to such order.

               Notwithstanding the preceding paragraph, if any
Participant borrows money pursuant to Article VIII, the Trustee and
the Committee shall have all rights to collect upon such
indebtedness as are granted pursuant to Article VIII and any
agreements or documents executed in connection with such loan.

        11.9.          PRUDENT MAN RULE.  Notwithstanding any other
provision of this Plan, the Trustee, the Committee and the Company
shall exercise their powers and discharge their duties under this
Plan Agreement for the exclusive purpose of providing benefits to
Employees and their Beneficiaries, and shall act with the care,
skill, prudence and diligence under the circumstances that a
prudent man acting in a like capacity and familiar with such
matters would use in the conduct of an enterprise of a like
character and with like aims.  Subject to the terms of the
preceding sentence, the Trustee shall diversify investments of the
Trust Fund so as to minimize the risk of large losses, unless under
the circumstances it is clearly prudent not to do so.



OREGON METALLURGICAL CORPORATION SAVINGS PLAN                      PAGE 55
<PAGE>
        11.10.         LIMITATIONS ON LIABILITY.  Notwithstanding any of
the preceding provisions of the Plan, none of the Trustee, the
Company, the Committee and each individual acting as an Employee or
agent of any of them shall be liable to any Participant, former
Participant or Beneficiary for any claim, loss, liability or
expense incurred in connection with the Plan, except when the same
shall have been judicially determined to be due to the gross
negligence or willful misconduct of such person.  The Company shall
indemnify and hold harmless each individual acting as an Employee
or agent of the Company (including Committee members) from any and
all claims, liabilities, costs and expense (including attorney
fees) arising out of any actual or alleged act or failure to act
with respect to the administration of the Plan, except that no
indemnification or defense shall be provided to any person with
respect to conduct which has been judicially determined, or agreed
by the parties, to have constituted bad faith or willful misconduct
on the part of such person, or to have resulted in his receipt of
personal profit or advantage to which he is not entitled.

        11.11.         HEADINGS.  The headings in this Plan are inserted
for convenience of reference only and are not to be considered in
construction of the provisions hereof.

        11.12.         GENDER AND NUMBER.  Except when otherwise required
by the context, any masculine terminology in this document shall
include the feminine, and any singular terminology shall include
the plural.

        11.13.         ERISA AND APPROVAL UNDER INTERNAL REVENUE CODE. 
This Plan is intended to qualify as a plan meeting the requirements
of Sections 401 and 501(a) of the Code, as now in effect or
hereafter amended, so that the income of the Trust Fund may be
exempt from taxation under Section 501(a) of the Code,
contributions of the Company under the Plan may be deductible for
federal income tax purposes under Section 404 of the Code and
amounts subject to Salary Reduction Agreements are not treated as
distributed to Participants for federal income tax purposes under
Section 402(e)(3) of the Code.  Any modification or amendment of
the Plan and/or Trust Agreement may be made retroactively, as
necessary or appropriate, to establish and maintain such
qualification and to meet any requirement of the Code or ERISA.

        11.14.         EXTENSION OF PLAN TO RELATED EMPLOYERS.

               (a)     With the approval of the Company, any Related
        Employer may adopt the Plan and qualify its Employees to
        become Participants thereunder by taking proper corporate
        action to adopt the Plan and making such contributions to the
        Trust Fund as the Board of Directors of the Related Employer
        may require.

               (b)     The Plan will terminate with respect to any Related
        Employer that has adopted the Plan pursuant to this Section if
        the Related Employer ceases to be a Related Employer, revokes
        its adoption of the Plan by appropriate corporate action,
        permanently discontinues its contributions for its Employees,
        is judicially declared bankrupt, makes a general assignment
        for the benefit of creditors or is dissolved.  If the Plan is
        terminated or contributions are discontinued with respect to
        any Related


OREGON METALLURGICAL CORPORATION SAVINGS PLAN                       PAGE 56
<PAGE>
        Employer, the provisions of Section 10.4 shall apply to the
        interest in the Plan of the Employees of such Related
        Employer, and their Beneficiaries.

               (c)     The terms "Company" and "Employee" in the Plan shall
        include any Related Employer that has adopted the Plan
        pursuant to this Section 11.14 and such Related Employer's
        Employees; provided, however, that the term "Company" shall
        not include any such Related Employer where used in Articles
        VI or VII of the Plan. The Company shall act as the agent for
        each Related Employer that adopts the Plan for all purposes of
        administration thereof.


                           ARTICLE XII

                      TOP-HEAVY PROVISIONS

        12.1.          TOP-HEAVY STATUS.  Except as provided in Sections
12.4(b) and (c), the provisions of this Article shall not apply to
the Plan with respect to any Plan Year for which the Plan is not
Top-Heavy.  If the Plan is or becomes Top-Heavy in any Plan Year,
the provisions of this Article XII will supersede any conflicting
provisions elsewhere in the Plan. 

        12.2.          DEFINITIONS.  For purposes of this Article XII, the
following words and phrases shall have the meanings stated below
unless a different meaning is required by the context:

               (a)     "Determination Date" means, with respect to any Plan
        Year: (i) the last day of the preceding Plan Year, or (ii) in
        the case of the first Plan Year of the Plan, the last day of
        such Plan Year.

               (b)     "Key Employee" means an Employee meeting the
        definition of "key employee" contained in Section 416(i)(1) of
        the Code and the Regulations interpreting that Section.  For
        purposes of determining whether an Employee is a Key Employee,
        the definition of Compensation set forth in Section 12.6 shall
        apply.

               (c)     "Non-Key Employee" means any Employee who is not a
        Key Employee.

               (d)     "Valuation Date" means with respect to a particular
        Determination Date, the most recent annual Plan Year Valuation
        Date (as defined in Section 1.44) occurring within a 12-month
        period ending on the applicable Determination Date.



OREGON METALLURGICAL CORPORATION SAVINGS PLAN                      PAGE 57
<PAGE>
        12.3.          DETERMINATION OF TOP-HEAVY STATUS.

               (a)     The Plan will be "Top-Heavy" with respect to any
        Plan Year if, as of the Determination Date applicable to such
        Year, the ratio of the Adjusted Balances in the accounts of
        Key Employees (determined as of the Valuation Date applicable
        to such Determination Date) to the Adjusted Balances in the
        accounts of all Employees (determined as of such Valuation
        Date) exceeds 60%.  For purposes of computing such ratio, and
        for all other purposes of applying and interpreting this
        paragraph (a): (i) the amount of the accounts of any Employee
        shall be increased by the aggregate distributions made with
        respect to such Employee under the Plan during the five-year
        period ending on any Determination Date; (ii) benefits
        provided under all Plans which are aggregated pursuant to (b)
        of this Section must be considered; and (iii) the provisions
        of Section 416 of the Code and all Regulations interpreting
        that Section shall be applied.  If any Employee has not
        performed services for the Company or any Related Employer at
        any time during the five-year period ending on any
        Determination Date, the balances of the accounts of such
        Employee shall not be taken into consideration for purposes of
        determining whether the Plan is Top-Heavy with respect to the
        Plan Year to which such Determination Date applies.

               (b)     For purposes of determining whether the Plan is
        Top-Heavy, all qualified retirement Plans maintained by the
        Company and each Related Employer shall be aggregated to the
        extent that such aggregation is required under the applicable
        provisions of Section 416 of the Code and the Regulations
        interpreting that Section.  All other qualified retirement
        Plans maintained by the Company and each Related Employer
        shall be aggregated only to the extent permitted by Section
        416 of the Code and such Regulations and elected by the
        Company.

               (c)     For purposes of determining whether the Plan is
        Top-Heavy, the Adjusted Balance of a Participant's accounts
        shall not include (i) the amount of a rollover contribution
        (or similar transfer) and Earnings thereon attributable to a
        rollover contribution (or similar transfer) accepted after
        December 31, 1983, initiated by the Participant and derived
        from a Plan not maintained by the Company or any Related
        Employer, or (ii) a distribution made with respect to an
        Employee which is a tax-free rollover contribution (or similar
        transfer) that is either not initiated by the Employee or that
        is made to a Plan maintained by the Company or any Related
        Employer.

               (d)     Solely for purposes of determining whether the Plan
        is Top-Heavy, the accrued benefit of any Non-Key Employee
        shall be determined (i) under the method, if any, that
        uniformly applies for accrual purposes under all plans of the
        Company or any Related Employer, or (ii) if there is no such
        method, as if such


OREGON METALLURGICAL CORPORATION SAVINGS PLAN                      PAGE 58
<PAGE>
        benefit accrued not more rapidly than the slowest accrual rate
        permitted under the fractional accrual rule of Section
        411(b)(1)(C) of the Code.

        12.4.          VESTING.

               (a)     If the Plan becomes Top-Heavy, the vested interest
        of a Participant in the portion of his Company Discretionary
        Contribution Account and Matching Contributions Account
        referred to in paragraph (b) below shall be determined in
        accordance with the following formula:

<TABLE>
<CAPTION>
                                           Vested         Forfeitable
                 Years of Service        Percentage       Percentage
                 ________________        __________       ___________
                 <S>                        <C>                <C>

                 Less than One Year           0%               100%
                      One Year               20%                80%
                     Two Years               40%                60%
                    Three Years              60%                40%
                     Four Years              80%                20%
                 Five or More Years         100%                 0%

</TABLE>

        For purposes of the above schedule, years of Service shall
        include all years of Service required to be counted under
        Section 411(a) of the Code, disregarding all years of Service
        permitted to be disregarded under Section 411(a)(4) of the
        Code.

               (b)     The vesting schedule set forth in paragraph (a)
        shall apply to all amounts allocated to a Participant's
        Company Discretionary Contribution Account and Matching
        Contributions Account while the Plan is Top-Heavy and during
        the period of time before the Plan becomes Top- Heavy.  This
        vesting schedule shall not apply to the Company Discretionary
        Contribution Account and Matching Contributions Account of any
        Employee who does not have an Hour of Service after the Plan
        becomes Top-Heavy. 

               (c)     If the Plan becomes Top-Heavy and subsequently
        ceases to be Top-Heavy, the vesting schedule set forth in
        subsection (a) shall automatically cease to apply, and the
        vesting schedule set forth in Section 5.7 shall automatically
        apply, with respect to all amounts allocated to a
        Participant's Company Discretionary Contribution Account and
        Matching Contributions Account for all Plan Years after


OREGON METALLURGICAL CORPORATION SAVINGS PLAN                     PAGE 59
<PAGE>
        the Plan Year with respect to which the Plan was last Top
        Heavy.  For purposes of this subsection (c), this change in
        vesting schedules shall only be valid to the extent that the
        conditions of Section 10.1 of the Plan and Section 411(a)(10)
        of the Code are satisfied.

        12.5.          MINIMUM CONTRIBUTION.  For each Plan Year that the
Plan is Top-Heavy, the Company will contribute and allocate to the
Company Discretionary Contribution Account, Salary Reduction
Contribution Account and Matching Contributions Account of each
Participant who is a Non-Key Employee and is employed by the
Company on the last day of such Plan Year an amount consisting of
contributions and forfeitures equal to the lesser of (i) three
percent of such Employee's Compensation (as defined in Section
12.6) for such Plan Year and (ii) the largest percentage of Company
Discretionary Contributions, Salary Reduction Contributions,
Supplemental Company Contributions, matching Contributions and
forfeitures, as a percentage of the Key Employee's Compensation (as
defined in Section 12.6), allocated to the Company Discretionary
Contribution Account, Salary Reduction Contribution Account and
Matching Contributions Account of any Key Employee for such Plan
Year.  The minimum contribution allocable pursuant to this Section
12.5 will be determined without regard to any contributions by the
Company for any Employee under the Federal Social Security Act.  A
Non-Key Employee will not be excluded from an allocation pursuant
to this Section merely because his compensation is less than a
stated amount.  A Non-Key Employee who has become a Participant but
who fails to complete at least 1,000 Hours of Service in a Plan
Year in which the Plan is Top-Heavy shall not be excluded from an
allocation pursuant to this Section.  A Non-Key Employee who is a
Participant in the Plan and who declined to elect to have Salary
Reduction Contributions made to his account for the Plan Year shall
receive an allocation for that Plan Year pursuant to this Section. 
Notwithstanding anything to the contrary contained herein, in no
event shall the Compensation of a Participant taken into account
under the Plan for purposes of this Section 12.5 for any Plan Year
commencing on and after January 1, 1989, and prior to January 1,
1994, exceed $200,000, or such greater amount provided pursuant to
Section 401(a)(17) of the Code.  The Compensation of a Participant
taken into account for purposes of this Section 12.5 for Plan Years
commencing on and after January 1, 1994, shall be limited in
accordance with the provisions of subsections 1.13(a) through (c)
of the Plan.

        12.6.          COMPENSATION.  For any Plan Year in which the Plan
is Top-Heavy, annual compensation for purposes of this Article XII
shall have the meaning set forth in Section 414(q)(7) of the Code.

        12.7.          COLLECTIVE BARGAINING AGREEMENTS.  The requirements
of Sections 12.4 and 12.5 shall not apply with respect to any
Employee included in a unit of Employees covered by a collective
bargaining agreement between Employee representatives and the
Company or a Related Employer if retirement benefits were the
subject of good faith bargaining between such Employee
representatives and the Company or Related Employer.



OREGON METALLURGICAL CORPORATION SAVINGS PLAN                    PAGE 60
<PAGE>


OREGON METALLURGICAL CORPORATION SAVINGS PLAN                    PAGE 61
<PAGE>
        IN WITNESS WHEREOF, the Company has caused this instrument to
be executed in its name by its duly authorized officers and its
corporate seal to be hereunto affixed, and the Trustee to evidence
his acceptance, has hereunto set his hand, all on the day and year
first above written.  This Plan may be executed in separate
counter-parts by the Company and Trustee, each of which, together
shall constitute an original Plan.


                                      OREGON METALLURGICAL CORPORATION,
                                      an Oregon corporation


                                      By /s/ Dennis P. Kelly
                                        ____________________________________
                                        Dennis P. Kelly, Vice President,
                                        Finance


OREGON METALLURGICAL CORPORATION SAVINGS PLAN                        PAGE 62
<PAGE>
                                              [bjm:A:\OM-SAV.PLN:3/26/96]



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