AMENDMENT TO KENTUCKY ELECTRIC
		   STEEL, INC. EXECUTIVE SEVERANCE PLAN


	WHEREAS, Kentucky Electric Steel, Inc. ("Company") adopted the
Kentucky Electric Steel, Inc. Executive Severance Plan ("Plan) for the
benefit of eligible employees; and

	WHEREAS, the Company retained the right to amend the Plan
pursuant to Section 9 thereof; and

	WHEREAS, the Company desires to amend the Plan to change the
definition of the term "Change of Control":

	NOW, THEREFORE, effective as of May 6, 1999, the Plan is amended
as follows:

1.  Section 9 is deleted and replace with the following:

		The right is reserved by the Board of Directors of the
Company to amend or terminate the Plan; however, no such amendment or
termination shall be made after a Change of Control or in connection
with negotiations with a third party resulting in a Change of Control.
The term "Change of Control" shall mean (i) the consummation of (A) any
consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which shares of the
Company's Common Stock would be converted into cash, securities or
other property, other than a merger of the Company in which the holders
of the Company's Common Stock immediately prior to the merger have
substantially the same proportionate ownership of common stock of the
surviving corporation immediately after the merger, or (B) any sale,
lease, exchange or transfer (in one transaction or a series of related
transactions) of all or substantially all the assets of the Company, or
(ii) the approval by the shareholders of the Company of any plan or
proposal for the liquidation or dissolution of the Company, other than
in connection with a bankruptcy or reorganization proceeding of the
Company under applicable federal or state bankruptcy laws, or (iii) any
"person" (as such term is used in Sections 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), other
than the Company or a subsidiary thereof or any employee benefit plan
sponsored by the Company or a subsidiary thereof, becoming the
beneficial owner (within the meaning of Rule 13d-3 under the Exchange
Act) of securities of the Company representing 25% or more of the
combined voting power of the Company's then outstanding securities
ordinarily (and apart from rights accruing in special circumstances)
having the right to vote in the election of directors, as a result of a
tender or exchange offer, open market purchases, privately-negotiated
purchases or otherwise, or (iv) at any time during a period of two (2)
consecutive years, individuals who at the beginning of such period
constituted the Board of Directors of the Company ceasing for any
reason to constitute at least a majority thereof, unless the election
or the nomination for election by the Company's shareholders of each
new director during such two-year period was approved by a vote of at
least two-thirds of the directors then still in office who were
directors at the beginning of such two-year period.  Unless there has
been a Change of Control or unless there are negotiations relating to a
possible Change of Control, the Plan shall terminate one (1) year after
its adoption unless the Board of Directors of the Company extends it
prior thereto.

		IN WITNESS WHEREOF, this Amendment  is adopted and
effective immediately on the day and year first above written.

					KENTUCKY ELECTRIC STEEL, INC.
		     By: /s/  Charles C. Hanebuth             5/19/97