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                           1988 STOCK INCENTIVE PLAN

                                      OF

                          BETHLEHEM STEEL CORPORATION


1.  PURPOSE OF THE PLAN.

    This Stock Incentive Plan (the Plan) is intended to encourage ownership of
Common Stock of Bethlehem Steel Corporation (Bethlehem) by key employees of
Bethlehem and its subsidiaries and to provide additional incentive for them to
promote the success of the business.

2.  STOCK SUBJECT TO THE PLAN.

    Subject to certain adjustments as set forth in Section 15 hereof, there
shall be reserved for issuance upon the exercise or surrender of the right to
exercise options to be granted under the Plan (Options) and pursuant to stock
awards (Grants) an aggregate of 3,000,000 shares of the Common Stock of
Bethlehem (Common Stock); PROVIDED, HOWEVER, that the number of such shares
issued pursuant to Grants shall not exceed 500,000. Such shares may be in whole
or in part, as the Board of Directors of Bethlehem (Board) shall from time to
time determine, issued shares of Common Stock which shall have been reacquired
by Bethlehem or authorized but unissued shares of Common Stock. Except as
otherwise provided in Section 7 hereof, if any Option shall expire, terminate or
be forfeited or canceled for any reason without having been exercised or
surrendered in full, the remaining shares covered thereby shall again be
available for the purposes of the Plan, and if any Grant shall be forfeited
before the restrictions provided for in such Grant shall lapse in full, the
remaining shares covered thereby shall again be available for the purposes of
the Plan. In addition, shares of Common Stock issued pursuant to Options or
Grants but forfeited by the recipient shall again be available for the purposes
of the Plan.

    Options under the Plan may be incentive stock options within the meaning of
Section 422A(b) of the Internal Revenue Code of 1986, as the same may be amended
from time to time, or nonqualified stock options and shall be designated
accordingly in the applicable option agreement.

3.  EMPLOYEES TO WHOM AWARDS SHALL BE GRANTED.

    Options and Grants (Awards) may be granted, separately or in such
combinations as the Board may in any individual case determine, only to regular
employees (including officers) of Bethlehem or of any subsidiary of Bethlehem
who shall be selected as provided in Section 19 hereof. A director of Bethlehem
or of a subsidiary who shall not at the time also be an employee of Bethlehem or
of a subsidiary shall not be eligible to receive an Award. An employee who shall
have been granted an Award may be granted one or more additional Awards. The
term "subsidiary" as used in this Plan means a corporation more than 50% of the
voting stock of which shall at the time be owned directly or indirectly by
Bethlehem.

                                 OPTIONS

4.  OPTION PRICES.

    The purchase price of the Common Stock covered by each Option shall be not
less than 100% of the fair market value of the Common Stock at the time of
granting the Option.  Such fair market value shall be determined by the Board
but shall not be less than the mean of the high and low prices of the Common
Stock on the New York Stock Exchange on the day the Option shall be granted.

5.  TERM OF OPTIONS.

    The term of each Option shall be not more than ten years from the date of
granting thereof.  Each Option shall be subject to earlier termination or
forfeiture as herein provided.

6.  EXERCISE OF OPTIONS.

    An Option may be made exercisable at any time or from time to time, in one
or more installments, as the Board in its discretion shall determine; PROVIDED,
HOWEVER, that an Option may not be exercised as to less than
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100 shares at any one time (or the remaining shares then covered by the Option,
if less than 100 shares). The Board may also establish conditions to exercise
based upon continued employment, the attainment of specified financial
performance goals and other relevant factors. The Board may waive any or all
such conditions with respect to any or all Option recipients and may accelerate
the expiration of the period during which any Option or portion of an Option
shall not be exercisable.

    The purchase price of the shares of Common Stock purchased upon the exercise
of an Option shall be paid in full at the time of exercise in cash or in whole
or in part with shares of Common Stock.  The value of any share delivered in
payment of all or part of the purchase price upon the exercise of an Option
shall be the closing sale price of a share of Common Stock on the New York Stock
Exchange on the date the Option shall be exercised.

    Except as provided in Sections 10 and 11 hereof, an Option may not be
exercised in whole or in part unless the holder thereof shall then be an
employee of Bethlehem or of a subsidiary.  The holder of an Option shall not
have any of the rights of a stockholder with respect to the shares covered by
his Option until and except to the extent that the Option shall have been duly
exercised or the right to exercise the Option shall have been surrendered in
whole or in part for shares of Common Stock as provided in Section 7 hereof.


7.  SURRENDER OF OPTIONS.

    The Board, upon such terms and conditions as it shall deem appropriate, may
(but shall not be obligated to) authorize on behalf of Bethlehem the acceptance
of the surrender of the right to exercise an Option or a portion thereof (but
only to the extent and in the amounts that such Option shall then be
exercisable) and the payment by Bethlehem therefor of an amount equal to the
excess of the fair market value of the shares of Common Stock covered by such
Option or portion thereof over the option price of such shares.  Such payment
shall be made in shares of Common Stock (valued at fair market value), or in
cash, or partly in cash and partly in shares of Common Stock, as the Board shall
determine.  For the purposes of this Section 7, such fair market value shall be
deemed to be the closing sale price of the Common Stock on the New York Stock
Exchange on the date of surrender or, with respect to surrenders during the
period beginning on the third business day following the date of release by
Bethlehem of its quarterly financial results and ending on the twelfth business
day following the date of such release, such fair market value shall be
determined by the Board but shall not exceed the highest closing sale price or
be less than the lowest closing sale price of the Common Stock on the New York
Stock Exchange during such period.  The shares of Common Stock covered by an
Option or portion thereof the right to exercise which shall have been so
surrendered shall not again be available for the purposes of the Plan.

8.  OPTION AGREEMENTS.

    Each Option shall be evidenced by a written option agreement which agreement
(and any amendment thereof) shall contain such terms and provisions, consistent
with the requirements of the Plan, as the Board in its discretion shall
determine.  Option agreements need not be identical.

9.  CONTINUING EMPLOYMENT OF OPTION RECIPIENTS.

    An option agreement may provide that (i) any shares of Common Stock issued
upon the exercise of the Option provided for therein, (ii) any payment (whether
in shares of Common Stock, or in cash, or some combination thereof) made by
Bethlehem upon the surrender as provided in Section 7 hereof of the right to
exercise the Option provided for therein, (iii) the Option itself provided for
therein or (iv) any combination of the foregoing shall be forfeited and returned
to Bethlehem if the recipient shall cease to remain in the employ of Bethlehem
or one or more of its subsidiaries during the period or periods specified by
such agreement.  The holder of an Option shall, as one of the terms of the
option agreement relating thereto, agree to remain in the employ of Bethlehem or
one or more of its subsidiaries in order to exercise the Option.  Such
employment shall be at the pleasure of each employing corporation and at such
compensation as such employing corporation shall reasonably determine.  Any such
condition to remain in the employ of Bethlehem or its subsidiaries shall not
apply (i) if employment shall terminate or be terminated by reason of
retirement, death or permanent disability or (ii) if a change in control as
defined in this Section 9 shall have occurred.  For purposes of this Plan, the
term change in control shall mean (i) the first purchase of shares pursuant to a
tender offer or exchange (other than a tender offer or exchange by Bethlehem)
for all or part of Bethlehem's Common Stock or any securities convertible into
such Common Stock, (ii) the receipt by Bethlehem of a Schedule 13D or other
advice indicating

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that a person is the "beneficial owner" (as that term is defined in Rule 13d-3
under the Securities Exchange Act of 1934) of 20% or more of Bethlehem's Common
Stock calculated as provided in paragraph (d) of said Rule 13d-3, (iii) the date
of approval by stockholders of Bethlehem of an agreement providing for any
consolidation or merger of Bethlehem in which Bethlehem will not be the
continuing or surviving corporation or pursuant to which shares of Common Stock
of Bethlehem would be converted into cash, securities or other property, other
than a merger of Bethlehem in which the holders of Common Stock of Bethlehem
immediately prior to the merger would have the same proportion of ownership of
common stock of the surviving corporation immediately after the merger, (iv) the
date of the approval by stockholders of Bethlehem of any sale, lease, exchange
or other transfer (in one transaction or a series of related transactions) of
all or substantially all the assets of Bethlehem or (v) the adoption of any plan
or proposal for the liquidation or dissolution of Bethlehem.


10. RETIREMENT OR TERMINATION OF EMPLOYMENT OF OPTION RECIPIENTS BY REASON
    OF PERMANENT DISABILITY.

    If an employee to whom an Option shall have been granted shall retire, or
if his employment shall terminate or be terminated by reason of permanent
disability, such employee (and, if he shall die within five years after such
retirement or such termination by reason of permanent disability, then the
estate of such employee or a person who shall have acquired the right to
exercise such Option by bequest or inheritance) may exercise such Option in
whole or in part, and/or the Board may authorize the acceptance of the surrender
of the right to exercise such Option or any portion thereof as provided in
Section 7 hereof, at any time within five years after such retirement or after
such termination by reason of permanent disability, but not after the expiration
of the term of the Option.

    If an employee to whom an Option shall have been granted shall die after
such retirement or such termination by reason of permanent disability and during
the applicable period during which such Option may be exercised, his estate or
the person who shall have acquired the right to exercise such Option by bequest
or inheritance shall be deemed to have offered, immediately prior to the
termination of such period, to surrender the right to exercise such Option
pursuant to the provisions of Section 7 hereof, unless such Option shall have
theretofore been exercised, or the right to exercise such Option shall have
theretofore been so surrendered, or such Option shall have been forfeited.

    If the employment of an employee to whom an Option shall have been granted
shall be terminated otherwise than by reason of retirement, death or permanent
disability, such Option shall, to the extent not theretofore forfeited or
exercised or the right to exercise it theretofore surrendered, be canceled upon
such termination of employment, and, if so provided in the related option
agreement, the shares of Common Stock issued upon the exercise of the Option or
the shares of Common Stock, or cash, or combination thereof paid by Bethlehem
upon the surrender of the Option shall be forfeited and returned to Bethlehem.

    An Option shall not be affected by any change of duties or position of the
holder or any temporary leave of absence granted to him by the employing
corporation.  Nothing in the Plan or in any option agreement entered into
pursuant to the Plan shall confer upon any employee any right to continue in the
employ of Bethlehem or of any of its subsidiaries or interfere in any way with
the right of Bethlehem or any such subsidiary to terminate the employment of
such employee at any time.

    For purposes of this Plan the term "permanent disability" means disability
by bodily injury or disease, either occupational or nonoccupational in cause,
preventing the employee on the basis of satisfactory medical evidence from
engaging in any employment of the type normally performed by the employee.

11. DEATH OF OPTION RECIPIENT; CHANGE IN CONTROL.

    If an employee to whom an Option shall have been granted shall die while
employed by Bethlehem or one or more of its subsidiaries, such Option may be
exercised in whole or in part, and/or the Board may authorize the acceptance of
the surrender of the right to exercise such Option or any portion thereof as
provided in Section 7 hereof, by the estate of such employee (or by a person who
shall have acquired the right to exercise such Option by bequest or
inheritance), at any time within five years after the death of such employee,
but not after the expiration of the term of the Option.

    Anything in this Plan to the contrary notwithstanding, if a change in
control shall occur, the right to exercise all outstanding Options to the extent
such Options shall not theretofore have been forfeited or exercised or the right
to exercise such Options theretofore surrendered shall automatically vest in
accordance with their

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respective terms. Upon the occurrence of a change in control, an employee to
whom an Option shall have been granted may exercise the portion, if any, of such
Option that shall then be exercisable, and any and all installments of such
Option that shall not then be exercisable and shall not theretofore have been
forfeited shall automatically become exercisable on the date or dates
established in the option agreement relating thereto as the date or dates on
which such installment or installments shall become exercisable, regardless of
whether the conditions, if any, to exercise based upon continued employment, the
attainment of specified financial performance goals or any other factor shall
have been or shall thereafter be satisfied. The first sentence of this Section
11 notwithstanding, if such employee shall die (whether or not he shall be
employed by Bethlehem or by one or more of its subsidiaries at the time of his
death), the estate of such employee (or a person who shall have acquired the
right to exercise such Option by bequest of inheritance) may exercise each such
portion that shall become exercisable pursuant to the immediately preceding
sentence during the five-year period after it shall have become exercisable, but
not after the expiration of the term of the Option.


                                 GRANTS

12. GRANTS.

    A Grant shall be subject to such terms and conditions as the Board in its
discretion shall determine, which may include, without limitation, conditions
for issuance of shares of Common Stock pursuant thereto at any time subsequent
to the granting thereof or in installments from time to time or providing for
forfeiture of such Grant or the shares issued or theretofore issued pursuant
thereto in designated circumstances;  PROVIDED, HOWEVER, that upon the issuance
of shares pursuant to a Grant, the recipient shall, with respect to such shares,
be and become a Bethlehem stockholder except to the extent otherwise provided in
such Grant.  The Board may in its discretion award unrestricted shares of Common
Stock in consideration of services theretofore rendered by the recipient.  The
Board in its discretion may require, among other things, that the recipient pay
the par value for the shares to be issued pursuant to a Grant.  Each Grant shall
be evidenced by a written instrument in such form as the Board shall determine,
including, without limitation, a certificate for shares of Common Stock bearing
a legend indicating the restrictions of the Grant.

    In the event of a recipient's termination of employment for any reason prior
to the lapse of restrictions applicable to a Grant made to such recipient, the
Board may determine in its sole discretion that any or all rights to shares of
Common Stock as to which there shall still remain unlapsed restrictions shall be
forfeited by such recipient to Bethlehem without payment or any consideration by
Bethlehem, and neither the recipient nor any successors, heirs, assigns or
personal representatives of such recipient shall thereafter have any further
rights or interest in such shares, or that the restrictions with respect to all
or a portion of such shares shall terminate.

13. RESTRICTED STOCK AGREEMENTS.

    Each Grant of restricted shares shall be evidenced by a written restricted
stock agreement which agreement (and any amendment thereof) may contain such
terms and provisions, consistent with the requirements of the Plan, as the Board
in its discretion shall determine.  Restricted stock agreements need not be
identical.  Such agreements shall contain the following terms and conditions:

        (a)  Restriction Period.  A Grant of restricted shares made pursuant 
    to this Plan may be subject to such terms, conditions and restrictions,
    including, without limitation, substantial risks of forfeiture based upon
    requirements relating to continued employment, the attainment of specified
    financial performance goals or other relevant factors and for such period
    or periods as shall be determined by the Board at the time that the Grant
    shall be awarded. The Board shall have the power to permit, in its
    discretion, an acceleration of the expiration of the applicable restriction
    period with respect to any part of or all the restricted Common Stock
    awarded to any recipient, and to waive any or all terms, conditions or
    restrictions contained in any or all restricted stock agreements.

       (b)  Lapse of Restrictions.  Each restricted stock agreement shall 
    specify the terms and conditions upon which any restrictions on the right
    to receive shares representing restricted stock awarded under the Plan
    shall lapse, as determined by the Board. Upon the lapse of such
    restrictions, a certificate or certificates for shares of Common Stock
    without any restriction shall be issued to the recipient or his legal
    representative.

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                        TERMS OF GENERAL APPLICABILITY


14. NONTRANSFERABILITY OF AWARDS.
 
    An Award shall not be transferable otherwise than by will or the laws of
descent and distribution, and an Option may be exercised or the right to
exercise an Option surrendered during the lifetime of the employee only by him
or his legal representative if he shall be incompetent.

15. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.

    In the event of changes in the outstanding Common Stock of Bethlehem by
reason of stock dividends, stock splits, recapitalizations, mergers,
consolidations, combinations or exchanges of shares, separations,
reorganizations or liquidations, the number and class of shares to be issued
pursuant to outstanding Awards and as to which Awards may be granted under the
Plan shall be appropriately adjusted by the Board. An adjustment shall not be
made in the minimum number of shares which may be purchased at any time.

16. NO LOANS IN CONNECTION WITH AWARDS.

    Neither Bethlehem nor any subsidiary may directly or indirectly lend money
to any employee to acquire or carry shares of Common Stock purchased upon the
exercise of an Option or to pay in whole or in part for shares to be issued
pursuant to a Grant.

17. EFFECTIVENESS OF THE PLAN.

    The Plan shall become effective April 1, 1988, provided that it shall be
approved by the stockholders at the 1988 Annual Meeting of the stockholders of
Bethlehem, or at any adjournment thereof.  Unless the Plan shall be so approved,
it shall be null and void.

18. TIME OF GRANTING OF AWARDS.

    Nothing contained in the Plan or in any resolution adopted or to be adopted
by the Board or by any committee to which the Board shall have delegated power
pursuant to Section 19 hereof or by the stockholders of Bethlehem with respect
to the Plan shall constitute the granting of an Award. The granting of an Award
shall take place on the date on which the Board shall approve the granting of
such Award or such later date as the Board shall designate as the date of
granting of such Award.

19. ADMINISTRATION OF THE PLAN.

    Subject to the express provisions of the Plan, the Board shall have plenary
authority, in its discretion, to determine the terms and conditions to be
included in any Award (which such terms and conditions may differ with respect
to recipients), the time or times at which, and the employees of Bethlehem and
its subsidiaries to whom, Awards shall be granted, the type of such Awards, the
purchase price (if any, in the case of Grants), and the number, of the shares to
be covered by each Award, the conditions of continuing employment, the time or
times when each Option may be exercised or the right to exercise such Option may
be surrendered and when restrictions provided for by any Grant may lapse and
whether in whole or in installments; to interpret the Plan; to prescribe, amend
and rescind the rules and regulations relating to it; and to make all other
determinations which the Board shall deem necessary or advisable for the
administration of the Plan.  The Board may, however, at any time or from time to
time, delegate to the Executive Compensation Committee or such other committee
or committees (each of which shall consist of not less than three members of the
Board) appointed by the Board any of or all the powers and duties of the Board
under the Plan (except those relating to (i) the determination whether the
shares of Common Stock reserved for use in connection with the Plan shall be
issued shares or unissued shares, (ii) the appointment of any such committee and
(iii) the termination or amendment of the Plan).  The Board may from time to
time appoint members of any such committee in substitution for or in addition to
members previously appointed, may fill vacancies, however caused, in any such
committee and may discharge any such committee.  So long as any such delegation
shall be in force, any action by the Executive Compensation Committee or any
other such committee within the scope of such delegation shall be and be deemed
to be action by the Board under the Plan.

    Anything herein to the contrary notwithstanding, none of the employees of
Bethlehem or any subsidiary shall as a member of the Board or of the Executive
Compensation Committee or of any such other committee have any vote with regard
to the granting of an Award to such employee, the purchase price (if any, in the
case

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of Grants) of the shares of Common Stock covered by any such Award, the
time at which any such Award shall be granted, the number of shares covered
thereby, when an Option may be exercised or the right to exercise it surrendered
or when restrictions with respect to shares of restricted stock shall lapse and
whether in whole or in installments, the conditions under which the Award or
shares of Common Stock issued pursuant thereto shall be forfeited or the
provisions of the related option or restricted stock agreement.

    Words in the masculine gender used herein shall be deemed to include the
feminine gender.

20. GOVERNMENT AND OTHER REGULATIONS.

    The obligation of Bethlehem to sell and deliver shares of Common Stock
under the Options and pursuant to the Grants shall be subject to (i) all
applicable laws, rules and regulations and such approvals by any governmental
agencies as may be required, including, without limitation, the effectiveness of
a registration statement under the Securities Act of 1933, as deemed necessary
or appropriate by counsel for Bethlehem, and (ii) the condition that such shares
shall have been duly listed on the New York Stock Exchange.

21. NONEXCLUSIVITY OF THE PLAN.

    Neither the adoption of the Plan by the Board nor the submission of the
Plan to the stockholders of Bethlehem for approval shall be construed as
creating any limitations on the power of the Board to adopt such other incentive
arrangements as it may deem desirable, including, without limitation, the
granting of stock options or stock otherwise than under the Plan, and such
arrangements may be either applicable generally or only in specific cases.


22. AMENDMENT AND TERMINATION OF THE PLAN.

    The Plan may be terminated or amended by the stockholders of Bethlehem. The
Board may also terminate the Plan or amend the Plan in such respects as it shall
deem advisable; PROVIDED, HOWEVER, that the Board may not, without approval by
the stockholders of Bethlehem, change (i) (except as provided in Section 15
hereof) the maximum number of shares of Common Stock as to which Awards may be
granted under the Plan, (ii) the manner of determining the Option prices except
to change the manner of determining the fair market value of the Common Stock as
set forth in Sections 4 and 7 hereof, (iii) the maximum term of each Option as
provided in Section 5 hereof or (iv) the provisions of the second paragraph of
Section 19 hereof. No termination or amendment of the Plan may adversely affect
any rights under an outstanding Option or Grant without the consent of the
holder thereof.

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