<PAGE>
 
                          BETHLEHEM STEEL CORPORATION
                         POST RETIREMENT RETAINER PLAN
                      FOR NON-OFFICER DIRECTORS ("Plan")
                      ----------------------------------

                                        

     WHEREAS, Bethlehem Steel Corporation ("Bethlehem") recognizes that, in the
case of Non-officer Directors, the provision of post-retirement benefits is
desirable in order to help obtain new Non-officer Directors and retain existing
Non-officer Directors so that Bethlehem may benefit from the services of such
experienced persons, and therefore desires to provide for the payment of such
benefits in appropriate cases.

     NOW, THEREFORE, in consideration of past and future services of such Non-
officer Directors, Bethlehem agrees to be legally bound as follows:

     1.   Definitions.  Whenever used herein:
          -----------                        
     (a)  "Annual Payment" means a payment to a Non-officer Director as
          described in paragraph 3 hereof.
     (b)  "Board" means the Board of Directors of Bethlehem.
     (c)  "Effective Date" means January 1, 1990.
     (d)  "Lump-Sum Payment" means a payment to the designated beneficiary or
          beneficiaries or estate of a Non-officer Director pursuant to the
          provisions of paragraph 5 hereof.
<PAGE>
 
                                       2


     (e)  "Non-officer Director" means any person who serves as a member of the
          Board on or after the Effective Date and who shall not be a
          participant in the Pension Plan.
     (f)  "Retainer Fee" means the annual compensation fee established by the
          Board for a member of the Board who is not an employee of Bethlehem.
     (g)  "Termination Date" means the date on which a Termination of Service
          occurs.
     (h)  "Termination of Service" means the cessation of service as a Non-
          officer Director for any reason, including death.
     (i)  "Year of Service" means a period of twelve (12) consecutive full
          months service as a Non-officer Director, the first of which shall
          commence on the date the person commences service as a Non-officer
          Director; provided, however, that in the event a person serves as a
          Non-officer Director during two or more separate periods, the Years of
          Service for such person shall be determined on a cumulative basis and
          may include a period of service as a Non-officer Director for less
          than twelve (12) consecutive full months.

     2.   Eligibility. A Non-officer Director who completes five (5) or more
          -----------
          Years of Service shall, upon Termination of Service other than by
          reason of death or for cause, be entitled to receive Annual Payments
          as set forth in paragraph 4 hereof. For
<PAGE>
 
                                       3

          purposes of this paragraph 2, a Termination of Service shall be deemed
          to be "for cause" if such termination is based on fraud,
          misappropriation or embezzlement on the part of the Non-officer
          Director. Notwithstanding the foregoing, a Non-officer Director shall
          not be deemed to have been terminated "for cause" unless and until
          there shall have been delivered to such individual a copy of a
          resolution duly adopted by the affirmative vote of not less than 
          three-quarters of the entire membership of the Board at a meeting of
          the Board called and held for that purpose (after reasonable notice to
          such individual and an opportunity for such individual, together with
          counsel, to be heard before the Board), finding that in the good faith
          opinion of the Board such individual was guilty of fraud,
          misappropriation or embezzlement and specifying the particulars
          thereof in detail.

     3.   Amount.  The amount of the Annual Payment payable hereunder to an
          ------                                                           
          eligible Non-officer Director shall be determined as follows:
<TABLE>
<CAPTION>
Years of Service
at Termination Date                                             Amount
-------------------------------------------  -----------------------------------
<S>                                          <C>
5 but less than 10                           50% of Retainer Fee in effect at
                                             the Termination Date plus, for each
                                             full Year of Service in excess of
                                             five (5), 10% of such Retainer Fee.
 
10 or more                                   100% of Retainer Fee in effect at
                                             the Termination Date.
</TABLE>

     4.   Commencement and Duration of Payments. The Annual Payments to an
          -------------------------------------
          eligible Non-officer Director shall be paid in quarterly installments.
          The initial quarterly payment shall be due as of the end of the third
          month following the month which includes the Termination Date unless
          the Non-officer Director is less than age 65
<PAGE>
 
                                       4

          at the Termination Date, in which case the initial quarterly payment
          shall be due as of the end of the month in which the Non-officer
          Director attains age 65. Quarterly installments of the Annual Payments
          will continue to be due (as of the end of the month) every three (3)
          months thereafter until the number of Annual Payments made to the Non-
          officer Director equals the number of complete Years of Service of
          such individual.

     5.   Death Benefit. If a Non-officer Director dies after her incurs a
          -------------
          Termination of Service and has not theretofore received the full
          number of Annual Payments due under this Plan or, if Termination of
          Service is due to death and the Non-officer Director would have been
          eligible to receive Annual Payments under this Plan had such
          Termination of Service been caused by his resignation rather than
          death, a Lump-Sum Payment shall be made to his designated beneficiary
          or beneficiaries or to his estate in the absence of a written
          designation of beneficiary (or to the extent the written designation
          does not provide for the distribution of 100% of the Lump-Sum
          Payment). The Lump-Sum Payment shall be the present value of the
          quarterly installments of the Annual Payments which would have been
          payable to the Non-officer Director had he lived until all Annual
          Payments due under this Plan were made (assuming in the case of a
          Termination of Service due to death that such Termination of Service
          was caused by his resignation rather than death) determined based upon
          the publicly announced prime rate of Morgan Guaranty Trust Company of
          New York in effect on the date of death of the Non-officer Director.
<PAGE>
 
                                       5

     6.   Designation of Beneficiaries. A Non-Officer Director may file with the
          ----------------------------
          Secretary of Bethlehem a written designation of a beneficiary or
          beneficiaries to receive any amounts payable under this Plan in the
          event of the death of such Non-officer Director. Any such written
          designation may be changed or revoked by the Non-officer Director by
          written notice to the Secretary of Bethlehem.

     7.   Contractual Obligation. Bethlehem shall be under a contractual
          ----------------------
          obligation to make the payments provided for hereunder when due, and
          the method of making provisions for such payments (which may include
          the establishment of one or more trusts or providing letters of credit
          or other security arrangements) shall be solely in the discretion of
          the Board or any Committee of the Board to which it may delegate its
          power under this Plan. To the extent that benefits otherwise payable
          under this Plan are paid to a Non-officer Director or the beneficiary
          or estate of such Non-officer Director from a life insurance trust or
          otherwise, the obligation of Bethlehem under this Plan shall be
          correspondingly reduced.

     8.   Other Rights.  Nothing contained herein shall affect the right of a
          ------------                                                       
          Non-officer Director to participate in and receive benefits under and
          in accordance with any other compensation or program of Bethlehem.

     9.   Amendment and Termination.  This Plan shall continue in force with
          -------------------------                                         
          respect to any Non-officer Director until all payments provided for
          hereunder shall be made and shall be binding upon any successor by
          merger or to substantially all the assets of Bethlehem. The Board may,
          however, at any time amend or terminate this Plan but, 
<PAGE>
 
                                       6

          except as may otherwise be required by law, no amendment or
          termination of this Plan shall adversely affect any right to receive
          benefits (including the right to receive future payments) with respect
          to any Non-officer Director whose Termination Date occurred prior to
          such amendment or termination or reduce the benefits to which any Non-
          officer Director whose Termination Date had not occurred prior to such
          amendment or termination below the benefit such Non-officer Director
          would be entitled to receive if his Termination Date occurred as of
          the date of such amendment or termination.

     10.  Alienation.  No right or interest of a Non-officer Director under this
          ----------                                                            
          Plan shall be subject to voluntary or involuntary alienation,
          assignment or transfer of any kind.

     11.  Administration.  The administration of this Plan shall be the
          --------------                                               
          responsibility of the Board or any Committee of the Board to which it
          may delegate such responsibility; provided, however, that no person
          serving on the Board or any such Committee of the Board shall take
          part in any proceeding pursuant to this paragraph to the extent that
          it shall affect his right to receive a benefit under this Plan.
          Decisions of the Board or any such Committee of the Board shall be
          final and binding upon Bethlehem and all parties who may claim to have
          an interest under this Plan.

     12.  Governing Law.  This Plan shall be construed, regulated and
          -------------                                              
          administered for all purposes according to the laws of the State of
          Delaware.
<PAGE>
 
                                       7

     IN WITNESS WHEREOF, Bethlehem has caused this Plan to be duly adopted and
executed by its duly authorized officers and its corporate seal to be affixed
hereto as of the 27th day of June, 1990.

                                           BETHLEHEM STEEL CORPORATION

                                            by

                                            /s/ W. F. Williams
                                           ----------------------------
                                                W. F. Williams
                                                Chairman


[SEAL]


Attest:


/s/ Curtis H. Barnette
--------------------------------
     Secretary