SECOND AMENDMENT TO RESTATED
                       EMPLOYMENT AGREEMENT


       THIS SECOND AMENDMENT TO RESTATED EMPLOYMENT AGREEMENT
("Second Amendment") is made and entered into as of the 29th day
of July, 1998, by and between LACLEDE STEEL COMPANY, a Delaware
corporation ("Employer"), and MICHAEL H. LANE ("Employee").
       WHEREAS, Employee and Employer previously entered into
an employment agreement as of the 19th day of October, 1994 that
was restated on the 30th day of July, 1996 ("Restated Employment
Agreement"); and
       WHEREAS, the Restated Employment Agreement was
previously amended by an Amendment To Restated Employment
Agreement as of the 24th day of March, 1998 (the "First
Amendment"); and
       WHEREAS, Employee and Employer desire to further amend
the Restated Employment Agreement as previously amended by the
First Amendment by making the amendments stated herein and as
amended, to reaffirm Employee's Restated Employment Agreement;
and
       WHEREAS, Employee and Employer desire to set forth the
terms of Employee's continued employment with Employer, the terms
of the separation of Employee from Employer's employ at the end
of such employment and the terms of the timing of the payment of
Employee's Accrued Benefit under Employee's KERP as such terms
are hereinafter defined;
       NOW, THEREFORE, in consideration of the foregoing and
the promises and agreements herein contained, the parties agree
as follows:<PAGE>
       1.   Employee shall continue as Vice-President Finance,
            Treasurer & Secretary and as Chief Financial
            Officer.
       2.   The termination date of Employee's employment
            under Employee's Restated Employment Agreement
            shall be December 31, 1999 ("Agreement Termination
            Date").
       3.   Notwithstanding Employee's Agreement Termination
            Date, anything contained in Employee's Key
            Employee Retirement Agreement with Employer
            (Employee's "KERP"), the Restated Employment
            Agreement as amended by the First Amendment or
            this Second Amendment, Employer and Employee agree
            that on the first business day after Employee
            ceases for any reason to be a full time employee
            of the Company (Employee's "KERP Payment Date")
            Employer shall authorize in writing the Trustee of
            Employee's KERP to pay to Employee in a lump sum
            in kind all amounts owed to Employee pursuant to
            Employee's KERP.  Until Employee's KERP Payment
            Date, Employee shall be considered an active
            employee of Employer.
       4.   Paragraph 5 of the First Amendment is hereby
            deleted in its entirety.
       5.   In addition, if Employee shall remain an employee
            of Employer through the Agreement Termination Date
            or if Employee shall be terminated by Employer
            without "cause" prior to the Agreement Termination
            Date then Employer shall pay Employee two (2)
            severance payments each of which shall be equal to
            the sum of six (6) Monthly Payments reduced by
            applicable employment taxes (the "Severance
            Payments").  The first Severance Payment shall be
            paid on January 2, 2000 and the second Severance
            Payment shall be paid on April 1, 2000.
       6.   As amended by the First Amendment and subsequently
            amended by this Second Amendment the Restated
            Employment Agreement is hereby ratified in all
            respects.  If any provision of this Second
            Amendment is inconsistent with any provision of
            the Restated Employment Agreement as amended by
            the First Amendment, then such provision of this
            Second Amendment shall govern.
       IN WITNESS WHEREOF, the parties hereto have executed
       this Amendment as of the day and year first above
       written.

                           ______________________________
                                Michael H. Lane

                                          "Employee"

                           LACLEDE STEEL COMPANY


                           By: __________________________
                               Thomas E. Brew, Jr. President
       
                                          "Employer"<PAGE>