Exhibit 10.2

                                   LUKENS INC.
                  1997 PERFORMANCE-VESTED RESTRICTED STOCK PLAN


1.       PURPOSE

         The purpose of the Plan is to promote  the ability of Lukens Inc.  (the
"Company")  to  retain   certain  key  employees  and  enhance  the  growth  and
profitability  of the Company by providing the incentive of long-term awards for
continued employment and the attainment of performance objectives.

2.       DEFINITIONS

         (a)      "Award" means an award of Restricted Stock granted
under the Plan.

         (b)      "Board" means the Board of Directors of the Company.

         (c)      "Change of Control"means the occurrence of any of the
following events:

                   (i)
                           A.       Any "person" or "group" (as such terms are
                                    used in Sections 3(a)(9), 13(d)(3) and
                                    14(d)(2) of the 1934 Act), considered
                                    together with its or their "affiliates" and
                                    "associates" (as such terms are defined in
                                    Rule 12b-2 of the General Rules and
                                    Regulations under the 1934 Act), is or
                                    becomes the beneficial owner (as defined in
                                    Rule 13d-3 of the General Rules and
                                    Regulations under the 1934 Act), or acquires
                                    or holds voting control, directly or
                                    indirectly, of securities of the Company
                                    which, when considered together with any
                                    other securities of the Company held by such
                                    person or group of their affiliates or
                                    associates which by their terms are
                                    convertible, even if not then convertible,
                                    represent fifteen percent (15%) or more of
                                    the voting power of the then outstanding
                                    securities of the Company; and

                           B.       The Board as it existed immediately prior to
                                    any such acquisition of or change in
                                    ownership or control, after having been
                                    advised thereof, does not, within ten days
                                    after being so advised, adopt a resolution
                                    specifically determining that such
                                    acquisition of or change in ownership or
                                    control does not constitute a change of
                                    control event within the meaning of this
                                    Paragraph 2(c); or

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                  (ii) A change in the  composition  of a majority  of the Board
within 24 months  after  any  "person"  or  "group"  (as such  terms are used in
Sections 3(a)(9),  13(d)(3) and 14(d)(2) of the 1934 Act),  considered  together
with its or their  "affiliates"  or  "associates"  (as such terms are defined in
Rule 12b-2 of the  General  Rules and  Regulations  under the 1934  Act),  is or
becomes the beneficial  owner (as defined in Rule 13d-3 of the General Rules and
Regulations under the 1934 Act) or acquires or holds voting control, directly or
indirectly,  of securities of the Company which,  when considered  together with
any  other  securities  held by such  person  or group of  their  affiliates  or
associates which by their terms are convertible,  even if not then  convertible,
represent  fifteen  percent  (15%) of the voting  power of the then  outstanding
securities of the Company; or

                  (iii)
                           A.       Any  "person"  or "group" (as such terms are
                                    used  in  Section   3(a)(9),   13(d)(3)  and
                                    14(d)(2) of the 1934 Act) commences a tender
                                    offer or exchange  offer for  securities  of
                                    the Company if, upon  consummation  thereof,
                                    the offeror,  considered  together  with its
                                    "affiliates" and "associates" (as such terms
                                    are  defined  in Rule  12b-2 of the  General
                                    Rules and  Regulations  under the 1934 Act),
                                    would   own   or   control,    directly   or
                                    indirectly, securities of the Company which,
                                    when  considered  together  with  any  other
                                    securities  held by such  person or group or
                                    their  affiliates  or  associates  which  by
                                    their  terms  are  convertible,  even if not
                                    then  convertible,  represent thirty percent
                                    (30%)  or more of the  voting  power  of the
                                    then outstanding  securities of the Company,
                                    and

                           B.       The Board of  Directors of the Company as it
                                    existed immediately prior to any such offer,
                                    after having been advised thereof, does not,
                                    within  ten  business  days  after  being so
                                    advised,  adopt  a  resolution  specifically
                                    determining   that  such   offer   does  not
                                    constitute a change of control  event within
                                    the meaning of this Paragraph 2(c).

The terms  "person"  and  "group,"  as used in this  Paragraph  2(c),  shall not
include  (i) the  Company;  (ii) any  corporation  in which  the  Company  owns,
directly  or  indirectly,  voting  securities  sufficient  to  elect  at least a
majority of the directors of such  corporation;  (iii) any employee benefit plan
of the Company or of any  corporation  described  in  Paragraph  2(c);  (iv) any
individual or entity organized,  appointed or established by the Company for, or
pursuant to, the terms of any employee benefit plan described in Paragraph 2(c).

         (d)      "Code" means the Internal Revenue Code of 1986, as amended.

         (e)  "Committee"  means  the  Executive  Development  and  Compensation
Committee  of  the  Board,  or  such  other  committee  of the  Board  as may be
designated by the Board for this purpose from time to time.



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         (f) "Company" means Lukens Inc., a Delaware corporation,  including any
successor thereto by merger, consolidation,  acquisition of all or substantially
all the assets thereof, or otherwise.

         (g) "Date of Grant" means the date as of which an Award is granted.

         (h) "Eligible Employee" means a management employee of the Company or a
Subsidiary.

         (i) "Grantee" means an Eligible Employee who is granted an Award.

         (j) "Other Steel  Companies"  means the  companies  comprising  the S&P
Super Iron & Steel Index against which the Company  compares its five-year Total
Shareholder  Return in accordance  with the rules  promulgated by the Securities
Exchange Commission regarding performance graph disclosure by the Company in its
annual proxy statement.

         (k) "Performance  Period" means the period  commencing on the first day
of the Plan Year in which the Date of Grant  occurs and ending on the earlier of
(i) the last day of the second Plan Year beginning  after the Date of Grant,  or
(ii) a Change of Control.

         (l) "Plan"  means the Lukens Inc.  1997  Performance-Vested  Restricted
Stock Plan, as set forth herein, and as amended from time to time.

         (m)      "Plan Year" means the calendar year.

         (n) "Restricted Stock" means Shares subject to the restrictions imposed
pursuant to Paragraph 7(d) of the Plan and the Award.

         (o) "Rule 16b-3" means Rule 16b-3 promulgated under the 1934 Act, as in
effect from time to time.

         (p) "Share" or "Shares" means a share or shares of the Company's common
stock, $.01 par value.

         (q) "Subsidiary" means a corporation that, at the time in question,  is
a subsidiary  corporation of the Company within the meaning of section 424(f) of
the Code.

         (r) "Total  Shareholder  Return" means the  appreciation in Share price
over the  Performance  Period,  assuming that  dividends are reinvested as paid;
provided  that the  calculation  of Total  Shareholder  Return  shall be made in
accordance with the rules prescribed by the Securities  Exchange  Commission for
purposes of performance graph disclosure.

         (s) "1933 Act" means the Securities Act of 1933, as amended.

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         (t) "1934 Act" means the Securities Exchange Act of 1934, as amended.

3.       RIGHTS TO BE GRANTED

         Rights  that may be  granted  under the Plan are  rights to  Restricted
Stock,  which give the  Grantee  ownership  rights in the Shares  subject to the
Award, subject to a substantial risk of forfeiture, as set forth in Paragraph 7.

4.       SHARES SUBJECT TO THE PLAN

         (a) The Shares issued under the Plan may, at the Company's  option,  be
either Shares held in treasury or Shares originally issued for such purpose. Not
more than 100,000  Shares in the  aggregate  may be issued under the Plan to any
single individual in any calendar year pursuant to the grant of Awards,  subject
to adjustment in accordance with Paragraph 10.

         (b) If Restricted Stock is forfeited pursuant to the terms of an Award,
other Awards with respect to such Shares may be granted.

5.       ADMINISTRATION OF THE PLAN

         (a) Administration. The Plan shall be administered by the Committee.

         (b) Grants.  Subject to the express terms and  conditions  set forth in
the Plan, the Committee shall have the power, from time to time, to:

                  (i) select  those  Eligible  Employees to whom Awards shall be
granted  under the Plan and to  determine  the  number  of Shares to be  granted
pursuant to each Award; and

                  (ii)  interpret the Plan's  provisions,  prescribe,  amend and
rescind rules and  regulations  for the Plan, and make all other  determinations
necessary or advisable for the administration of the Plan.

The  determination  of the  Committee  in all  matters as stated  above shall be
conclusive.

         (c)  Meetings.  The  Committee  shall hold  meetings  at such times and
places as it may  determine.  Acts  approved  at a meeting by a majority  of the
members of the Committee or acts approved in writing by the unanimous consent of
the members of the Committee shall be the valid acts of the Committee.

         (d) Exculpation.  No member of the Committee shall be personally liable
for  monetary  damages for any action taken or any failure to take any action in
connection  with  the  administration  of the  Plan or the  granting  of  Awards
thereunder  unless (i) the member of the  Committee  has  breached  or failed to
perform  the  duties of his  office,  and (ii) the  breach or failure to perform
constitutes self-dealing, willful misconduct or recklessness; provided, however,
that the provisions of this Paragraph 5(d) shall not apply to the responsibility
or liability of a member of the Committee pursuant to any criminal statute.



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         (e) Indemnification.  Service on the Committee shall constitute service
as a member of the Board. Each member of the Committee shall be entitled without
further act on his part to  indemnity  from the  Company to the  fullest  extent
provided by  applicable  law and the  Company's  Articles of  Incorporation  and
By-laws in connection with or arising out of any action, suit or proceeding with
respect to the  administration  of the Plan or the granting of Awards thereunder
in which he may be  involved  by reason of his being or having  been a member of
the Committee, whether or not he continues to be such member of the Committee at
the time of the action, suit or proceeding.

6.       ELIGIBILITY

         Awards may be granted only to Eligible Employees of the Company and its
Subsidiaries,  as determined by the Committee.  No Awards shall be granted to an
individual who is not an Eligible Employee of the Company or a Subsidiary of the
Company.

7.       RESTRICTED STOCK AWARDS

         The Committee may grant Awards in accordance  with the Plan.  The terms
and  conditions of Awards shall be set forth in writing as determined  from time
to time by the Committee, consistent, however, with the following:

         (a) Time of Grant.  All Awards  shall be granted  within ten (10) years
from the date of adoption of the Plan by the Board.

         (b) Shares Awarded.  The provisions of Awards need not be the same with
respect to each Grantee.  No cash or other consideration shall be required to be
paid by the Grantee in exchange for an Award.

         (c)  Awards  and  Agreements.  A  certificate  shall be  issued to each
Grantee in respect of Shares  subject  to an Award.  Such  certificate  shall be
registered  in the name of the  Grantee  and shall  bear an  appropriate  legend
referring to the terms,  conditions and  restrictions  applicable to such Award.
The Company may require that the certificate evidencing such Restricted Stock be
held by the Company until all restrictions on such Restricted Stock have lapsed.

         (d) Restrictions on Restricted Stock.  Unless provided otherwise by the
terms of an Award, the Grantee shall not be permitted to sell, transfer,  pledge
or assign Restricted Stock awarded under the Plan during the Performance Period.

         (e)  Performance  Goals.  Upon the  expiration of a Performance  Period
(other than by reason of a Change of Control),  a Grantee shall vest in all or a
portion of the  Restricted  Stock subject to an Award based on the attainment of
performance goals, as follows:

              (i) Full Vesting.  All of the Restricted Stock subject to an Award
shall vest in full if the Company's  Total  Shareholder  Return ranks in the top
one-third as compared to Other Steel Companies.


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              (ii) Fifty Percent Vesting.  Fifty percent (50%) of the Restricted
Stock  subject to an Award shall vest and fifty percent (50%) shall be forfeited
if the  Company's  Total  Shareholder  Return  ranks in the middle  one-third as
compared to Other Steel Companies.

              (iii) No Vesting.  The Grantee shall forfeit all of the Restricted
Stock subject to an Award if the Company's Total Shareholder Return ranks in the
bottom one-third as compared to Other Steel Companies.

In the event the  composition  of the Other Steel  Companies  changes during the
Performance  Period,  the  number  of Other  Steel  Companies  at the end of the
Performance  Period will be divided by three, and any resulting decimals will be
rounded  to the  nearest  whole  number,  in order to  determine  the  one-third
rankings in accordance with this Paragraph 7(e).

         (f) Lapse of Restrictions. Unless provided otherwise by the terms of an
Award,  or  unless  a  Change  in  Control  has  occurred  prior to the end of a
Performance Period, the restrictions with respect to Restricted Stock subject to
an Award shall lapse at the end of a Performance Period; provided, however, that
the Restricted  Stock subject to an Award has vested pursuant to Paragraph 7(e).
Notwithstanding the preceding, the Committee may, in its sole discretion, waive,
in whole or in part, any remaining  restrictions  with respect to such Grantee's
Restricted Stock.

         (g) Forfeiture.  In the event that a Grantee terminates employment with
the Company and its  Subsidiaries  during a Performance  Period,  all Restricted
Stock shall be forfeited by the Grantee and deemed canceled by the Company.

         (h) Rights of the  Grantee.  Grantees may have such rights with respect
to Shares  subject to an Award as may be  determined  by the  Committee  and set
forth in the Award,  including  the right to vote such Shares,  and the right to
receive  dividends  paid with respect to such Shares;  provided,  however,  that
dividends  shall be held in escrow and subject to forfeiture in accordance  with
Paragraph 8.

         (i) Delivery of Shares.  When the  Performance  Period has expired with
respect to an Award,  and the Company has determined  whether any portion of the
Shares  subject to such Award shall be forfeited in  accordance  with  Paragraph
7(e),  the Company shall deliver to the Grantee (or the person to whom ownership
rights  may have  passed  by will or the laws of  descent  and  distribution)  a
certificate for the number of Shares for which  restrictions have lapsed and for
which the  performance  goals have been met,  without any legend or restrictions
(except those that may be imposed by the Committee, in its sole judgment,  under
Paragraph  9(a)).  The right to payment of any  fractional  Shares that may have
accrued  shall be satisfied in cash,  measured by the product of the  fractional
amount  times  the fair  market  value  of a Share  at the  time the  applicable
restrictions lapse, as determined by the Committee.

8.       DIVIDENDS


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         During the  Performance  Period  applicable to an Award,  any dividends
paid on the  Shares  subject to such Award  shall  accrue,  but shall be held in
escrow by the  Company  until the  expiration  of the  Performance  Period.  The
accrued  dividends  shall be paid to the  Grantee  at the same time  that  Share
certificates are delivered in accordance with Paragraph 7(i);  provided that all
or a portion of such  dividends  shall be  forfeited in the same  proportion  as
Shares are  forfeited,  in  accordance  with  Paragraph  7(e).  Upon a Change of
Control before the expiration of the Performance  Period,  the accrued dividends
shall be paid to the Grantee in full.

9.       SECURITIES LAWS; TAXES

         (a) Securities  Laws.  The Committee  shall have the power to make each
grant of Awards under the Plan subject to such  conditions as it deems necessary
or appropriate to comply with the then-existing requirements of the 1933 Act and
the 1934 Act,  including Rule 16b-3. Such conditions may include the delivery by
the Grantee of an investment  representation  to the Company in connection  with
the lapse of  restrictions  and  forfeiture  provisions on Shares  subject to an
Award,  or the  execution of an agreement by the Grantee to refrain from selling
or otherwise  disposing of the Shares acquired for a specified period of time or
on specified terms.

         (b) Payment of Tax  Liabilities.  In  connection  with the grant of any
Award or the lapse of restrictions  and forfeiture  provisions  under any Award,
the  Company  shall have the right to (i)  require  the  Grantee to remit to the
Company  an amount  sufficient  to  satisfy  any  federal,  state  and/or  local
withholding  tax  requirements   prior  to  the  delivery  or  transfer  of  any
certificate or  certificates  for Shares subject to such Award, or (ii) take any
action whatever that it deems necessary to protect its interests with respect to
tax  liabilities.  The Company  shall not be  obligated  to make any delivery or
transfer  of  Shares  until  the  Grantee  has   complied,   to  the   Company's
satisfaction,  with any withholding  requirement,  or until the Company has been
indemnified to its satisfaction for any applicable tax, charge or assessment.

10.      CHANGES IN CAPITALIZATION

         The  aggregate  number of Shares and class of Shares as to which Awards
may be granted and the number of Shares covered by each outstanding  Award shall
be  appropriately  adjusted  in the  event  of a stock  dividend,  stock  split,
recapitalization  or  other  change  in  the  number  or  class  of  issued  and
outstanding  equity  securities of the Company  resulting  from a subdivision or
consolidation  of the Shares  and/or  other  outstanding  equity  security  or a
recapitalization  or other  capital  adjustment  (not  including the issuance of
Shares and/or other  outstanding  equity  securities on the  conversion of other
securities  of the  Company  which are  convertible  into  Shares  and/or  other
outstanding  equity  securities)  affecting the Shares which is effected without
receipt of consideration  by the Company.  The Committee shall have authority to
determine  the  adjustments  to be made  under  this  Paragraph  10 and any such
determination by the Committee shall be final, binding and conclusive.


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11.      CHANGE OF CONTROL

         Upon a  Change  of  Control,  any  performance  goal  requirements  and
restrictions  with respect to Restricted Stock (other than Restricted Stock that
has previously been forfeited) shall be eliminated in full.

12.      AMENDMENT AND TERMINATION

         The Plan may be  terminated  by the Board at any time.  The Plan may be
amended  by the Board or the  Committee  at any  time,  subject  to  shareholder
approval,  if required by applicable  securities and/or tax laws. No Award shall
be affected by any such termination or amendment  without the written consent of
the Grantee.

13.      EFFECTIVE DATE

         The  effective  date of the Plan is the date on which it is  adopted by
the Board.

14.      GOVERNING LAW

         The Plan and all determinations  made and actions taken pursuant to the
Plan shall be governed in accordance with Pennsylvania law.

               As adopted by the Board of Directors on February 26, 1997.



Dated:  May 12, 1997                                 /s/ William D. Sprague
        ------------                                 ----------------------
                                                     Secretary