Document:

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                                                                    EXHIBIT 10.4

                         INTERNATIONAL STEEL GROUP INC.
                        OFFICER CASH AND STOCK BONUS PLAN

         1.       PURPOSE. The purpose of the Plan is to provide incentives for
Officers of the Company to increase the profitability and growth of the Company
and to provide Officers an opportunity for an ownership interest in the Company.

         2.       EFFECTIVE DATE AND TERM OF PLAN. The Effective Date of the
Plan is June 28, 2002. The Plan shall terminate on June 28, 2005, unless
extended or earlier terminated by the Board.

         3.       DEFINITIONS.

                  3.1      "ADJUSTED DISTRIBUTION POOL" has the meaning assigned
         to such term in Section 6.2.

                  3.2      "ADJUSTED POST-TAX NET INCOME" means, for any Year,
         consolidated net income of the Company, after taxes, but before
         extraordinary items and bonuses payable to Participants under this
         Plan, as determined by the Company's outside auditors; provided,
         however, that, to the extent reasonably determinable, the effect upon
         Adjusted Post-Tax Net Income of start-up expenses relating to the
         start-up of the Company's facilities for a period not to exceed twelve
         (12) months following April 12, 2002 shall be excluded from and not
         taken into account in determining such Adjusted Post-Tax Net Income.

                  3.3      "BASE SALARY" means, with respect to a Participant,
         the regular annual rate of salary paid in a Year for services rendered
         (or which would have been paid in a Year with respect to a Participant
         whose employment terminates during the Year) without including any
         bonus (paid under this Plan or otherwise) or severance pay.

                  3.4      "BOARD" means the Board of Directors of the Company.

                  3.5      "CAPITAL" means, as of the end of any Year, the total
         of (i) paid-in capital, plus (ii) surplus, plus (iii) retained
         earnings, as set forth on the Company's audited balance sheet as of the
         last day of such Year.

                  3.6      "CODE" means the Internal Revenue Code of 1986, as
         amended from time to time.

                  3.7      "COMMITTEE" means a Committee of the Board as
         contemplated by Section 5.

                  3.8      "COMPANY" means International Steel Group Inc., a
         Delaware corporation, and its subsidiaries; provided, however, that for
         purposes of Sections 3.20, 4.2, 4.3 and the Change in Control
         definition contained in Section 7, the term "Company" shall mean solely
         International Steel Group Inc.

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                  3.9      "DISTRIBUTION POOL" means, for any Year, an amount
         determined by multiplying (x) Adjusted Post-Tax Net Income, minus an
         amount equal to ten percent (10%) of "Capital", by (y) six percent
         (6%), as such percentage may be adjusted up or down by the Committee
         from time to time, but no more than once per Year and otherwise as
         subject to the requirements of Section 162(m) of the Code, at such
         time, if any, as the Company becomes subject to Section 162(m) of the
         Code.

                  3.10     "EFFECTIVE DATE" has the meaning assigned to such
         term in Section 2.

                  3.11     "EXCHANGE ACT" means the Securities Exchange Act of
         1934, as amended from time to time.

                  3.12     "FAIR MARKET VALUE" means, as of any date, the value
         of the Stock determined as follows:

                           (i)      If the Stock is listed on any established
                  stock exchange or a national market system, including without
                  limitation the NASDAQ National Market of the National
                  Association of Securities Dealers, Inc. Automated Quotation
                  (NASDAQ) System, the Fair Market Value of a share of Stock
                  shall be the closing sales price for such Stock (or the
                  closing bid, if no sales were reported) as quoted on such
                  system or exchange (or the exchange with the greatest volume
                  of trading in the Stock) on the last market trading day prior
                  to the day of determination, as reported in the Wall Street
                  Journal or such other source as the Committee deems reliable;

                           (ii)     If the Stock is quoted on the NASDAQ System
                  (but not on the NASDAQ National Market thereof) or is
                  regularly quoted by a recognized securities dealer but selling
                  prices were not reported, the Fair Market Value of a share of
                  Common Stock shall be the mean between the high bid and low
                  asked prices for the Stock on the last market trading day
                  prior to the day of determination, as reported in the Wall
                  Street Journal or such other source for such date the
                  Committee deems reliable;

                           (iii)    In the absence of an established market for
                  the Stock, the Fair Market Value shall be established by the
                  Committee for such date using any reasonable method of
                  valuation.

                  3.13     "OFFICER" means an officer of the Company who is from
         time to time designated as an "Officer" Participant by the Committee. A
         Participant's status may be changed from year to year.

                  3.14     "PARTICIPANT" means those Officers selected from time
         to time to participate in the Plan by the Committee.

                  3.15     "PARTICIPANT'S ADJUSTED BASE SALARY" (a) for purposes
         of the cash portion of the bonus described in Section 6.1, means, with
         respect to any Officer who is a Participant, two (2) times the
         Officer's Base Salary and (b) for purposes of the stock (or

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         cash) portion of the bonus described in Section 6.2, means, with
         respect to an Officer who is a Participant, the Officer's Base Salary.

                  3.16     "PARTICIPANT'S BONUS PERCENTAGE" means, in any Year
         with respect to a Participant, a fraction, the numerator of which is
         equal to the Participant's Adjusted Base Salary and the denominator of
         which is equal to the sum of all the Participants' Adjusted Base
         Salaries (including for this purpose those Participants, if any, whose
         employment terminates on or before the last day of such Year)
         calculated separately for purposes of the separate bonus portions
         described in Sections 6.1 and 6.2.

                  3.17     "PLAN" means the International Steel Group Inc.
         Officer Cash and Stock Bonus Plan, as set forth herein and as it may be
         amended from time to time.

                  3.18     "RESTRICTED STOCK" means Stock issued pursuant to the
         Plan as contemplated by Section 6.2.

                  3.19     "RETIREMENT" means voluntary retirement by a
         Participant who is at least 65 years old.

                  3.20     "STOCK" means the $0.01 par value common stock of the
         Company, and may include a fractional share of Stock.

                  3.21     "VESTED SHARES" has the meaning assigned to such term
         in Section 7.

                  3.22     "YEAR" means the Company's fiscal year, with the
         first Year ending on December 31, 2002.

         4.       SHARES OF STOCK SUBJECT TO THE PLAN.

                  4.1      The total number of shares of Stock of the Company
         reserved and available for distribution pursuant to the Plan shall not
         exceed, in the aggregate, 306 shares of the authorized Stock of the
         Company, subject to adjustment as described below.

                  4.2      Stock which may be acquired under the Plan may be
         either authorized but unissued shares or shares of issued Stock held by
         the Company's treasury, or both, in the sole discretion of the
         Committee. Whenever any Stock is forfeited under the Plan, the shares
         forfeited may again be issued hereunder.

                  4.3      In the event of any stock dividend, stock split,
         combination or exchange of shares, recapitalization or other change in
         the capital structure of the Company, corporate separation or division
         (including, but not limited to, split-up, split-off, spin-off or
         distribution to Company stockholders other than a normal cash
         dividend), sale by the Company of all or a substantial portion of its
         assets, rights offering, merger, consolidation, reorganization or
         partial or complete liquidation, or any other corporate transaction or
         event having an effect similar to any of the foregoing, the aggregate
         number of shares reserved for issuance under the Plan, as the Committee
         shall deem necessary or appropriate to reflect equitably the effects of
         such changes, shall be

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         appropriately substituted for new shares or adjusted, as determined by
         the Committee in its sole discretion.

         5.       ADMINISTRATION. The Plan shall be administered by the Board
or, if appointed by the Board, a committee of directors (the "Committee") of the
Company consisting of at least two (2) members of the Board, each of whom shall
be both (i) a "Non-Employee Director" within the meaning of Rule 16b-3
promulgated under Section 16 of the Exchange Act or any successor provision, and
(ii) an "outside director" within the meaning of Section 162(m) of the Code;
provided, however, that from and after the date on which the Company is required
to register any class of its equity securities under Section 12 of the Exchange
Act, the Plan shall be administered by such a Committee. The members of the
Committee shall be selected by the Board. During any period of time in which the
Plan is administered by the Board, all references in the Plan to the Committee
shall be deemed to refer to the Board.

         The Committee shall administer the Plan so as to comply at all times
with Rule 16b-3 of the Exchange Act, and Section 162(m) of the Code or any other
qualifying laws or rules that may be applicable from time to time. To the extent
that any provision hereof is found not to be in compliance with any such Rule or
requirements the Committee shall have the full power and authority to effect
such changes or amendments, without the necessity of any further approval by
shareholders. Subject to the foregoing, the Board may from time to time increase
the size of the Committee and appoint additional members, remove members (with
or without cause), substitute new members, and fill vacancies (however caused).
A majority of the members of the Committee shall constitute a quorum, and the
actions of a majority of the members of the Committee at a meeting at which a
quorum is present shall be the actions of the Committee.

         The Committee has the exclusive power, authority and discretion to
adopt, alter and repeal such administrative rules, guidelines and practices
governing the Plan as it shall from time to time deem advisable and to interpret
the terms and provisions of the Plan. The Committee may require that a
Participant sign a contract or agreement evidencing the terms and conditions of
the Participant's rights to receive a bonus under this Plan. The Committee's
interpretation of the Plan shall be final, binding and conclusive on all
parties.

         The Committee may employ such legal counsel, consultants and agents as
it may deem desirable for the administration of the Plan and may rely upon any
opinion received from any such counsel or consultant and any computation
received from any such consultant or agent. Expenses incurred by the Committee
in engaging such counsel, consultant or agent shall be paid by the Company.

         The Committee shall have the right, in its sole discretion, to waive
the forfeiture provisions found in Section 7 below.

         6.       CASH AND STOCK BONUS. Subject to the terms, conditions and
limitations set forth in this Plan, each Year, if the Distribution Pool is a
positive number, the Participants may receive a cash and stock bonus as follows:

                  6.1      CASH BONUS. Each Participant shall receive a cash
         bonus in an amount equal to the product of (i) the Participant's Bonus
         Percentage and (ii) the Distribution

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         Pool; provided, however, that with respect to an Officer, the cash
         bonus shall not exceed two (2) times the Officer's Base Salary.

                  6.2      STOCK BONUS. The excess of the Distribution Pool over
         the sum of the aggregate cash bonuses payable under Section 6.1 to all
         Participants (the "Adjusted Distribution Pool"), if any, shall be
         distributed to the Participants in the form of Restricted Stock or
         cash, as follows: Each Participant shall receive that number of shares
         of Restricted Stack having, at the time of issuance, a Fair Market
         Value equal to the product of (i) the Participant's Bonus Percentage
         and (ii) the Adjusted Distribution Pool; provided that, with respect to
         an Officer, the aggregate Fair Market Value of the Restricted Stock so
         issued shall not exceed the Officer's Base Salary, provided, however
         that the Board of Directors (or the Committee) may elect to pay such
         excess in cash.

                  6.3      TERMINATION OF EMPLOYMENT. If a Participant's
         employment with the Company terminates for any reason on or before the
         last day of a Year, then such Participant shall not receive any bonus
         under the Plan with respect to such Year, except as otherwise agreed in
         writing between the Company and such Participant, in which case, the
         Participant shall receive a cash and stock bonus, if any, calculated
         using the applicable Participant's Adjusted Base Salary (solely for
         purposes of the numerator in determining such Participant's Bonus
         Percentage) multiplied by the percentage equivalent of a fraction, the
         denominator of which is 365 and the numerator of which is the number of
         days during the Year occurring prior to the date of the termination of
         the Participant's employment with the Company.

         7.       FORFEITURE AND VESTING OF RESTRICTED STOCK. Restricted Stock
issued to a Participant shall vest and become nonforfeitable as follows:
one-third (1/3) of the Restricted Stock will vest on the first anniversary of
the initial issuance date, an additional one-third (1/3) will vest on the
second anniversary of the initial issuance date, and the balance will vest on
the third anniversary of the initial issuance date; provided however, that no
less than 6 months prior to the date upon which Restricted Stock is scheduled
to vest, a Participant may, by delivering an irrevocable election to the
Company, direct that such Restricted Stock shall vest at a later date specified
by the Participant. Upon termination of the Participant's employment for any
reason other than Retirement, all shares of Restricted Stock of the Participant
which are not Vested Shares at the time of termination of employment shall be
forfeited and returned to the Company, and the Participant shall no longer be
the owner of or have any interest whatsoever in the forfeited Restricted Stock.
Notwithstanding the foregoing, including, without limitation, a Participant's
irrevocable election to defer vesting, in the event of a Change in Control
within two years following the Effective Date, all Restricted Stock held by
those Participants whose employment has not terminated prior to the Change in
Control and which are not Vested Shares will become Vested Shares upon the
Change in Control. For purposes of this Plan, a "Change in Control" shall be
deemed to have occurred if (i) any "person" or group of "persons" (as the term
"person" is used in Sections 13(d) and 14(d) of the Exchange Act) ("Person")
other than the shareholders of the Corporation on the date of adoption of this
Plan, acquires (or has acquired during the twelve-month period ending on the
date of the most recent acquisition by such Person) direct or indirect
beneficial ownership of securities of the Company representing more than 50% of
the combined voting power of the then outstanding securities of the Company or
(ii) a Person acquires (or has acquired during the twelve-month period ending
on the date of the

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most recent acquisition by such Person) assets from the Company that have a
total fair market value equal to or more than one-third of the total fair
market value of all of the assets of the Company immediately prior to such
acquisition.  Notwithstanding the foregoing, for purposes of clause (i), a
Change in Control will not be deemed to have occurred if the power to control
(directly or indirectly) the management and policies of the Company is not
transferred from a Person to another Person; and, for purposes of clause (ii),
a Change in Control will not be deemed to occur if the assets of the Company
are transferred: (A) to a shareholder in exchange for his stock, (B) to an
entity in which the Company has (directly or indirectly) 50% ownership, or (C)
to a Person that has (directly or directly) at least 50% ownership of the
Company with respect to its stock outstanding, or to any entity in which such
Person possesses (directly or indirectly) 50% ownership.

         The Committee, in its sole discretion, may waive the forfeiture
provisions of this Section 7 with respect to the Restricted Stock of a
Participant whose employment has terminated for reasons other than Retirement.

         8.       RESTRICTION ON TRANSFER OF RESTRICTED STOCK. Restricted Stock
that is forfeitable under the terms of this Plan may not be transferred,
assigned, sold, pledged, hypothecated, or otherwise disposed of in any manner
and shall not be subject to levy, attachment, or other legal process.
Notwithstanding any other provision of the Plan, any Participant who, prior to
the issuance of Restricted Stock, has not become a party to that certain
Management Stockholders Agreement (as amended, supplemented or otherwise
modified from time to time, the "Stockholders Agreement"), among the Company and
the persons named therein, shall become a party to the Stockholders Agreement
for so long as the Stockholders Agreement remains in effect, as a condition
precedent to the issuance of such Restricted Stock. Notwithstanding any other
provision of the Plan or of the Stockholders Agreement to the contrary, any
repurchase features (e.g., puts, calls and rights of first refusal) with respect
to any Restricted Stock shall be subject to such restrictions and limitations as
may be necessary in order to prevent the Plan and any award of Restricted Stock
from being treated as "variable" for accounting purposes pursuant to Accounting
Principles Board Opinion No. 25 and all interpretations issued thereunder by the
Financial Accounting Standards Board and its Emergency Issues Task Force, and
all repurchase rights of the Company or other shareholders of the Company, as
well as all rights of a Participant with respect to repurchases of Restricted
Stock, shall remain exercisable for such period of time as may be necessary to
prevent such variable treatment.

         9.       CERTIFICATES. Restricted Stock issued under this Plan shall be
issued in the name of each Participant. Stock certificates so issued shall be
held by the Company. Stock certificates shall bear such restrictive legends as
the Committee may prescribe. Each Participant shall make such representations
and furnish such information as may, in the opinion of counsel for the Company,
be appropriate to permit the Company, in the light of the then existence or
nonexistence with respect to such Restricted Stock of an effective registration
statement under the Securities Act of 1933, as amended (the "Securities Act"),
to issue the Restricted Stock in compliance with the provisions of the
Securities Act or any comparable act. The Company shall have the right, in its
sole discretion, to legend any Stock which may be issued pursuant to the Plan
(whether or not vested), or may issue stop transfer orders in respect thereof.

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         Subject to all the terms, conditions, and limitations of this Plan,
including provisions concerning forfeiture and restrictions on transfer, the
Participant shall be the owner of the Restricted Stock with full dividend and
voting rights. Upon the request of a Participant, separate stock certificates
shall be issued and delivered to the Participant with respect to Vested Shares.

         10.      GENERAL PROVISIONS.

                  10.1     NONGUARANTY OF EMPLOYMENT. The adoption of the Plan
         shall not confer upon any Participant any right to continued employment
         with the Company nor shall it interfere in any way with the right of
         the Company to terminate its relationship with any Participant at any
         time.

                  10.2     WITHHOLDING OF TAXES. No later than the date as of
         which an amount first becomes includible in the gross income of a
         Participant for federal income tax purposes with respect to any
         Restricted Stock under the Plan, the Participant shall pay to the
         Company or make arrangements satisfactory to the Committee regarding
         the payment of any federal, state or local taxes of any kind required
         by law to be withheld with respect to such amount. The obligations of
         the Company under the Plan shall be conditioned on such payment or
         arrangements and the Company, to the extent permitted by law, shall
         have the right to deduct any such taxes from any payment of any kind
         otherwise due to the Participant.

                  10.3     EXPENSES. The expenses of administering the Plan
         shall be borne by the Company.

                  10.4     FRACTIONAL SHARES. Fractional shares of Stock may be
         issued, provided that in lieu thereof the Committee may determine, in
         its sole discretion, whether cash shall be given in lieu of fractional
         shares or whether such fractional shares shall be eliminated by
         rounding up.

                  10.5     GOVERNING LAW. To the extent not governed by federal
         law, the Plan shall be construed in accordance with and governed by the
         laws of the State of New York.

                            [SIGNATURE PAGE FOLLOWS]

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         IN WITNESS WHEREOF, the Company has caused these presents to be
executed by its duly authorized officer as of June 28, 2002.

                         INTERNATIONAL STEEL GROUP INC.

                         BY: /s/ Rodney Mott
                             -----------------------------------

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                                                                    EXHIBIT 10.5

                             2002 STOCK OPTION PLAN

                                       OF

                         INTERNATIONAL STEEL GROUP INC.

         1.       Purpose. The purpose of this Stock Option Plan is to advance
the interests of the Corporation by encouraging and enabling the acquisition of
a larger personal proprietary interest in the Corporation by employees,
directors, consultants and independent contractors who are employed by, or
perform services for, the Corporation and its Subsidiaries and upon whose
judgment and keen interest the Corporation is largely dependent for the
successful conduct of its operations. It is anticipated that the acquisition of
such proprietary interest in the Corporation will stimulate the efforts of such
employees, directors consultants and independent contractors on behalf of the
Corporation and its Subsidiaries and strengthen their desire to remain with the
Corporation and its Subsidiaries. It is also expected that the opportunity to
acquire such a proprietary interest will enable the Corporation and its
Subsidiaries to attract desirable personnel, directors and other service
providers.

         2.       Definitions. When used in this Plan, unless the context
otherwise requires:

                  a.       "Board of Directors" shall mean the Board of
         Directors of the Corporation, as constituted at any time.

                  b.       "Chairman of the Board" shall mean the person who at
         the time shall be Chairman of the Board of Directors.

                  c.       "Committee" shall mean the Committee hereinafter
         described in Section 3.

                  d.       "Corporation" shall mean International Steel Group
         Inc.

                  e.       "Fair Market Value" on a specified date shall mean
         the closing price at which one Share is traded on the stock exchange,
         if any, on which Shares are primarily traded, or the last sale price or
         average of the bid and asked closing prices at which one Share is
         traded on the over-the-counter market, as reported on the National
         Association of Security Dealers Automated Quotation System, but if no
         Shares were traded on such date, then on the last previous date on
         which a Share was so traded, or, if none of the above are applicable
         the value of a Share as established by the Committee for such date
         using any reasonable method of valuation.

                  f.       "Options" shall mean the stock options granted
         pursuant to this Plan.

                  g.       "Plan" shall mean this 2002 Stock Option Plan of
         International Steel Group Inc. as adopted by the Board of Directors and
         approved by the shareholders of the Corporation as such Plan from time
         to time may be amended.

                  h.       "Share" shall mean a share of common stock of the
         Corporation, and may include a fractional Share.

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                           i.       "Subsidiary" shall mean any corporation 50%
         or more of whose stock having general voting power is owned by the
         Corporation, or by another Subsidiary as herein defined, of the
         Corporation. The term "Subsidiary" shall also mean (A) any limited
         liability company as to which the Corporation (or a Subsidiary, as
         described in the preceding sentence) is the sole member, or (B) any
         other entity which is majority-owned by the Corporation (or a
         Subsidiary, as described in the preceding sentence); provided, however,
         that incentive stock options may only be granted to employees of an
         entity described in clause (B) if and to the extent permitted by
         Section 422 of the Code.

         3.       Committee. The Plan shall be administered by the Board of
Directors; provided, however, that from and after the date on which the
Corporation is required to register any class of its equity securities under
Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), the Plan shall be administered by a Committee which shall consist of two
or more directors of the Corporation, each of whom shall be a "Non-Employee
Director" within the meaning of Rule 16b-3 under the Exchange Act and an
"outside director" within the meaning of Section 162(m) of the Internal Revenue
Code of 1986, as amended (the "Internal Revenue Code"). The members of the
Committee shall be selected by the Board of Directors. Any member of the
Committee may resign by giving written notice thereof to the Board of Directors,
and any member of the Committee may be removed at any time, with or without
cause, by the Board of Directors. If, for any reason, a member of the Committee
shall cease to serve, the vacancy shall be filled by the Board of Directors. The
Committee shall establish such rules and procedures as are necessary or
advisable to administer the Plan. During any period of time in which the Plan is
administered by the Board of Directors, all references in the Plan to the
Committee shall be deemed to refer to the Board of Directors.

         4.       Participants. The class of persons who are potential
recipients of Options granted under this Plan consist of the (i) employees of
the Corporation or a Subsidiary, (ii) directors of the Corporation or a
Subsidiary, and (iii) consultants and independent contractors used by the
Corporation or a Subsidiary, in each case as determined by the Committee in its
sole discretion. The employees, directors, consultants and independent
contractors to whom Options are granted under this Plan, and the number of
Shares subject to each such Option, shall be determined by the Committee in its
sole discretion, subject, however, to the terms and conditions of this Plan.

         5.       Shares and Grants of Options. The Committee may, but shall not
be required to, grant, in accordance with this Plan, Options to purchase an
aggregate of up to 2,267 Shares, which may be either Shares held in treasury or
authorized but unissued Shares. The maximum number of Shares which may be the
subject of Options granted to any individual during any calendar year shall not
exceed 850 Shares. If the Shares that would be issued or transferred pursuant to
any Option are not issued or transferred and cease to be issuable or
transferable for any reason, the number of Shares subject to such Option will no
longer be charged against the limitation provided for herein and may again be
made subject to Options; provided, however, that with respect to any Option
granted on or after the date on which any class of equity securities issued by
the Corporation is required to be registered under Section 12 of the Exchange
Act to any person who is a "covered employee" as defined in Section 162(m) of
the Code and the regulations promulgated thereunder that is canceled or
repriced, the number of Shares subject to such Option shall continue to count
against the maximum number of Shares which may be the subject of Options granted
to such person and such maximum number of

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Shares shall be determined in accordance with Section 162(m) of the Code and the
regulations promulgated thereunder.

         At the time an Option is granted, the Committee may, in its sole
discretion, designate whether such Option (a) is to be considered as an
incentive stock option within the meaning of Section 422 of the Internal Revenue
Code, or (b) is not to be treated as an incentive stock option for purposes of
this Plan and the Internal Revenue Code. No Option which is intended to qualify
as an incentive stock option shall be granted under this Plan to any person who,
at the time of such grant, is not an employee of the Corporation or a
Subsidiary.

         Notwithstanding any other provision of this Plan to the contrary, to
the extent that the aggregate Fair Market Value (determined as of the date an
Option is granted) of the Shares with respect to which Options which are
designated as incentive stock options, and any other incentive stock options,
granted to an employee (under this Plan, or any other incentive stock option
plan maintained by the Corporation or any Subsidiary that meets the requirements
of Section 422 of the Internal Revenue Code) first become exercisable in any
calendar year exceeds $100,000, such Options shall be treated as Options which
are not incentive stock options. Options with respect to which no designation is
made by the Committee shall be deemed to be incentive stock options to the
extent that the $100,000 limitation described in the preceding sentence is met.
This paragraph shall be applied by taking options into account in the order in
which they are granted.

         If any Option shall expire, be cancelled or terminate for any reason
without having been exercised in full, the unpurchased Shares subject thereto
may again be made subject to Options under the Plan.

         Nothing herein contained shall be construed to prohibit the issuance of
Options at different times to the same employee, director, consultant or
independent contractor.

         A certificate of Option signed by the Chairman of the Board of
Directors, or the President or a Vice President of the Corporation, shall be
issued to each person to whom an Option is granted. The certificate of Option
for an Option shall be legended to indicate whether or not the Option is an
incentive stock option. The Certificate of Option for an Option which is an
incentive stock option and for an Option which is a non-qualified stock option
shall be in the form attached hereto as Annex 1 and Annex 2, respectively, or in
such other form as may be determined by the Committee from time to time.

         6.       Price. The price per Share of the Shares to be purchased
pursuant to the exercise of any Option shall be fixed by the Committee at the
time of grant; provided, however, that the purchase price per share of the
Shares to be purchased pursuant to the exercise of an Option which is intended
to be an incentive stock option shall not be less than the Fair Market Value of
a Share on the day on which the Option is granted.

         7.       Duration of Options. The duration of any Option granted under
this Plan shall be fixed by the Committee in its sole discretion; provided,
however, that no Option shall remain in effect for a period of more than ten
years from the date upon which the Option is granted.

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         8.       Ten Percent Shareholders. Notwithstanding any other provision
of this Plan to the contrary, no Option which is intended to qualify as an
incentive stock option may be granted under this Plan to any employee who, at
the time the Option is granted, owns shares possessing more than ten percent of
the total combined voting power of all classes of stock of the Corporation,
unless the exercise price under such Option is at least 110% of the Fair Market
Value of a Share on the date such Option is granted and the duration of such
Option is no more than five years.

         9.       Consideration for Options. The Corporation shall obtain such
consideration for the grant of an Option as the Committee in its discretion may
request.

         10.      Restrictions on Transferability of Options. Options shall not
be transferable otherwise than by will or by the laws of descent and
distribution or as provided in this Section 10. Notwithstanding the foregoing,
the Committee may, in its discretion, authorize a transfer of all or a portion
of any Option, other than an Option which is intended to qualify as an incentive
stock option, by the initial holder to (i) the spouse, children, stepchildren,
grandchildren or other family members of the initial holder ("Family Members"),
(ii) a trust or trusts for the exclusive benefit of such Family Members, (iii) a
corporation or partnership in which such Family Members and the initial holder
are the only shareholders or partners, or (iv) such other persons or entities
which the Committee may permit; provided, however, that subsequent transfers of
such Options shall be prohibited except by will or the laws of descent and
distribution. Any transfer of such an Option shall be subject to such terms and
conditions as the Committee shall approve, including that such Option shall
continue to be subject to the terms and conditions of the Option and of the Plan
as amended from time to time. The events of termination of employment or service
under Section 12 shall continue to be applied with respect to the initial
holder, following which a transferred Option shall be exercisable by the
transferee only to the extent and for the periods specified under Section 12. An
Option which is intended to qualify as an incentive stock option shall not be
transferable otherwise than by will or by the laws of descent and distribution
and shall be exercisable during the holder's lifetime only by the holder
thereof.

         11.      Exercise of Options. An Option, after the grant thereof, shall
be exercisable by the holder at such rate and times as may be fixed by the
Committee.

         Notwithstanding the foregoing, all or any part of any remaining
unexercised Options granted to any person may be exercised in the following
circumstances (but in no event after the expiration of the term of the Option):
(a) immediately upon the holder's retirement from the Corporation and all
Subsidiaries on or after his 65TH birthday, (b) subject to the timing provisions
of Section 12 hereof, upon the Disability (as hereinafter defined) or the death
of the holder, (c) if, while the holder is employed by or serving as a director
of or consultant to, the Corporation or a Subsidiary, there occurs a Change in
Control, or (d) upon the occurrence of such special circumstances or event as in
the opinion of the Committee merits special consideration. For purposes of this
Plan, a "Change in Control" shall be deemed to have occurred if (i) any "person"
or group of "persons" (as the term "person" is used in Sections 13(d) and 14(d)
of the Exchange Act) ("Person") other than the shareholders of the Corporation
on the date of adoption of this Plan, acquires (or has acquired during the
twelve-month period ending on the date of the most recent acquisition by such
Person) direct or indirect beneficial ownership of securities of the Corporation
representing more than 50% of the combined voting power of the then outstanding

                                       4

<PAGE>

securities of the Corporation or (ii) a Person acquires (or has acquired during
the twelve-month period ending on the date of the most recent acquisition by
such Person) assets from the Corporation that have a total fair market value
equal to or more than one-third of the total fair market value of all of the
assets of the Corporation immediately prior to such acquisition. Notwithstanding
the foregoing, for purposes of clause (i), a Change in Control will not be
deemed to have occurred if the power to control (directly or indirectly) the
management and policies of the Corporation is not transferred from a Person to
another Person; and, for purposes of clause (ii), a Change in Control will not
be deemed to occur if the assets of the Corporation are transferred: (A) to a
shareholder in exchange for his stock, (B) to an entity in which the Corporation
has (directly or indirectly) 50% ownership, or (C) to a Person that has
(directly or directly) at least 50% ownership of the Corporation with respect to
its stock outstanding, or to any entity in which such Person possesses (directly
or indirectly) 50% ownership.

         An Option shall be exercised by the delivery of a written notice duly
signed by the holder thereof to such effect, together with the Option
certificate and the full purchase price of the Shares purchased pursuant to the
exercise of the Option, to the Chairman of the Board or an officer of the
Corporation appointed by the Chairman of the Board for the purpose of receiving
the same. Payment of the full purchase price shall be made as follows: in cash;
by check payable to the order of the Corporation; by delivery to the Corporation
of Shares which shall be valued at their Fair Market Value on the date of
exercise of the Option; or by such other methods as the Committee may permit
from time to time; provided, however, that a holder may not use any Shares to
pay the exercise price unless the holder has beneficially owned such Shares for
at least six months. No Option may be granted pursuant to the Plan or exercised
at any time when such Option, or the granting, exercise or payment thereof, may
result in the violation of any law or governmental order or regulation.

         Within a reasonable time after the exercise of an Option, the
Corporation shall cause to be delivered to the person entitled thereto, a
certificate for the Shares purchased pursuant to the exercise of the Option. If
the Option shall have been exercised with respect to less than all of the Shares
subject to the Option, the Corporation shall also cause to be delivered to the
person entitled thereto a new Option certificate in replacement of the
certificate surrendered at the time of the exercise of the Option, indicating
the number of Shares with respect to which the Option remains available for
exercise, or the original Option certificate shall be endorsed to give effect to
the partial exercise thereof.

         12.      Termination of Employment or Service. All or any part of any
Option, to the extent unexercised, shall terminate immediately (i) in the case
of an employee, upon the cessation or termination for any reason of the Option
holder's employment by the Corporation and all Subsidiaries, or (ii) in the case
of a director, consultant or independent contractor of the Corporation or a
Subsidiary who is not also an employee of the Corporation or a Subsidiary, upon
the holder's ceasing to serve as a director, consultant or independent
contractor of the Corporation or a Subsidiary, except that in either case the
Option holder shall have three months following the cessation of his employment
with the Corporation and Subsidiaries or his service as a director, consultant
or independent contractor of the Corporation or a Subsidiary, as the case may
be, and no longer, within which to exercise any unexercised Option that he could
have exercised on the day on which such employment, or service as a director,
consultant or independent contractor, terminated (including any portion of an
Option as to which the

                                       5

<PAGE>

exercisability is accelerated pursuant to Section 11); provided that such
exercise must be accomplished prior to the expiration of the term of such
Option. Notwithstanding the foregoing, if the cessation of employment or service
as a director, consultant or independent contractor is due to retirement on or
after attaining the age of sixty-five (65) years, or to Disability (as
hereinafter defined) or to death, the Option holder or the representative of the
Estate or the heirs of a deceased Option holder shall have the privilege of
exercising the Options which are exercisable at the time of such retirement, or
of such Disability or death (including any portion of an Option as to which the
exercisability is accelerated pursuant to Section 11); provided, however, that
such exercise must be accomplished prior to the expiration of the term of such
Option and (a) within three months of the Option holder's retirement or
Disability or (b) within 180 days of the Option holder's death, as the case may
be. If the employment or service of any Option holder with the Corporation or a
Subsidiary shall be terminated for Cause (as hereinafter defined), all
unexercised Options of such Option holder shall terminate immediately upon such
termination of the holder's employment or service with the Corporation and all
Subsidiaries, and an Option holder whose employment or service with the
Corporation and Subsidiaries is so terminated, shall have no right after such
termination to exercise any unexercised Option he might have exercised prior to
the termination of his employment or service with the Corporation and
Subsidiaries. Notwithstanding the foregoing, if the Option holder's cessation of
employment or service as a director, consultant or independent contractor is due
to any reason other than Cause or the Option holder's death, and the Option
holder dies within the period in which such holder's Options may be exercised,
as described above, then any unexercised Options held by such holder shall
thereafter be exercisable to the extent exercisable at the time of death for a
period of 180 days from the date of such death, but in no event beyond the
expiration of the term of any such Option (if shorter than such 180-day period).
For purposes of this Plan, "Disability" shall mean either (i) if the holder has
an employment agreement with the Corporation or a Subsidiary, the definition of
Disability included in such employment agreement, or (ii) if the holder does not
have an employment agreement with the Corporation or a Subsidiary, termination
of employment or service with the Corporation or any of its Subsidiaries as a
result of an Option holder's inability to perform substantially all his duties
and responsibilities to the Corporation or any of its Subsidiaries by reason of
a physical or mental disability or infirmity (A) for a continuous period of six
months, or (B) at such earlier time as such holder submits medical evidence
satisfactory to the Committee, or the Committee otherwise determines, that such
holder has a physical or mental disability or infirmity that will prevent such
holder from substantially performing his duties and responsibilities for six
months or longer, and "Cause" shall mean either (i) if the holder has an
employment agreement with the Corporation or a Subsidiary, the definition of
Cause included in such employment agreement, or (ii) if the holder does not have
an employment agreement with the Corporation or a Subsidiary, the termination of
the holder's employment with the Corporation or a Subsidiary because of (A) the
willful failure by the holder (other than by reason of incapacity due to
physical or mental illness) to perform any material duty in connection with the
holder's employment with the Corporation, (B) the conviction of the holder of a
felony or the holder's plea of no contest to a felony, or (C) the perpetration
by the holder of a material dishonest act or fraud against the Corporation or
any Subsidiary thereof.

         Nothing contained herein or in the Option certificate shall be
construed to confer on any employee or director any right to be continued in the
employ of the Corporation or any Subsidiary or as a director of the Corporation
or a Subsidiary or derogate from any right of the

                                       6

<PAGE>

Corporation and any Subsidiary to request the resignation of or discharge any
employee, director, consultant or independent contractor (without or with pay),
at any time, with or without Cause.

         13.      Shareholders Agreement. Notwithstanding any other provision of
the Plan, any person who wishes to exercise an Option and who has not
theretofore become a party to that certain Management Stockholders Agreement (as
amended, supplemented or otherwise modified from time to time, the "Shareholders
Agreement"), among the Corporation and the persons named therein, shall become a
party to the Shareholders Agreement for so long as the Shareholders Agreement
remains in effect, as a condition precedent to the exercise of such Option.
Notwithstanding any other provision of the Plan or of the Shareholders Agreement
to the contrary, any repurchase features (e.g., puts, calls and rights of first
refusal) with respect to any Shares acquired pursuant to the exercise of an
Option shall be subject to such restrictions and limitations as may be necessary
in order to prevent the Plan and any Option from being treated as "variable" for
accounting purposes pursuant to Accounting Principles Board Opinion No. 25 and
all interpretations issued thereunder by the Financial Accounting Standards
Board and its Emergency Issues Task Force, and all repurchase rights of the
Corporation, a Subsidiary or other shareholders of the Corporation, as well as
all rights of an Option holder with respect to repurchases of Shares, shall
remain exercisable for such period of time as may be necessary to prevent such
variable treatment.

         14.      Adjustment of Optioned Shares. If prior to the complete
exercise of any Option there shall be declared and paid a stock dividend upon
the common stock of the Corporation or if the common stock of the Corporation
shall be split up, converted, exchanged, reclassified, or in any way substituted
for, the Option, to the extent that it has not been exercised, shall entitle the
holder thereof upon the future exercise of the Option to such number and kind of
securities or other property subject to the terms of the Option to which he
would have been entitled had he actually owned the Shares subject to the
unexercised portion of the Option at the time of the occurrence of such stock
dividend, split-up, conversion, exchange, reclassification or substitution; and
the aggregate purchase price upon the future exercise of the Option shall be the
same as if the originally optioned Shares were being purchased thereunder. Any
fractional shares or securities payable upon the exercise of the Option as a
result of such adjustment may, in the Committee's sole discretion, be payable in
cash based upon the Fair Market Value of such shares or securities at the time
of such exercise. If any such event should occur, the number of Shares with
respect to which Options remain to be issued, or with respect to which Options
may be reissued, shall be adjusted in a similar manner.

         Notwithstanding the foregoing, upon the dissolution or liquidation of
the Corporation, or the occurrence of a merger or consolidation in which the
Corporation is not the surviving corporation, or in which the Corporation
becomes a subsidiary of another corporation or in which the voting securities of
the Corporation outstanding immediately prior thereto do not continue to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than 50% of the combined voting
securities of the Corporation or such surviving entity immediately after such
merger or consolidation, or upon a spin-off (including a reverse spin-off) by
the Corporation, but only as to the holders of Options who are to be employed
immediately after the spin-off by the entity which represents less than 50% of
the value of the Corporation immediately prior to the transaction and any
holders who

                                       7

<PAGE>

will serve as directors of such entity and not of the Corporation, or upon the
sale of all or substantially all of the assets of the Corporation, the Committee
may, in its sole discretion, terminate the Options granted hereunder, unless
provision is made by the Corporation in connection with any such transaction for
the assumption of Options theretofore granted or the substitution for such
Options of new options of the successor corporation or a parent or subsidiary
thereof, with appropriate adjustments as to the number and kinds of shares and
the per share exercise prices. In the event the Options terminate as aforesaid
in connection with such a dissolution, liquidation, merger, consolidation,
spin-off or sale, the Committee shall provide that the holder of any such Option
shall be entitled to receive from the Corporation an amount equal to the excess
of (i) the Fair Market Value (determined on the basis of the amount received by
shareholders in connection with such transaction) of the Shares subject to the
portion of the Option not theretofore exercised and which is then exercisable
(including the extent to which the exercisability is accelerated pursuant to
Section 11), over (ii) the aggregate purchase price which would be payable for
such Shares upon the exercise of the Option.

         In the event of any other change in the corporate structure or
outstanding Shares, the Committee may make such equitable adjustments to the
number of Shares and the class of shares available hereunder or to any
outstanding Options as it shall deem appropriate to prevent dilution or
enlargement of rights.

         15.      Issuance of Shares and Compliance with Securities Act. The
Corporation may postpone the issuance and delivery of Shares upon any exercise
of an Option until (a) the admission of such Shares to listing on any stock
exchange on which Shares of the Corporation of the same class are then listed,
and (b) the completion of such registration or other qualification of such
Shares under any State or Federal law, rule or regulation as the Corporation
shall determine to be necessary or advisable. Any person exercising an Option
shall make such representations and furnish such information as may, in the
opinion of counsel for the Corporation, be appropriate to permit the
Corporation, in the light of the then existence or non-existence with respect to
such Shares of an effective registration statement under the Securities Act, to
issue the Shares in compliance with the provisions of the Securities Act or any
comparable act. The Corporation shall have the right, in its sole discretion, to
legend any Shares which may be issued pursuant to the exercise of an Option, or
may issue stop transfer orders in respect thereof.

         16.      Income Tax Withholding. If the Corporation or a Subsidiary
shall be required to withhold any amounts by reason of any Federal, State or
local tax rules or regulations in respect of the issuance of Shares pursuant to
the exercise of such Option, the Corporation or the Subsidiary shall be entitled
to deduct and withhold such amounts from any cash payments to be made to the
holder of such Option. In any event, the holder shall make available to the
Corporation or Subsidiary, promptly when requested by the Corporation or such
Subsidiary, sufficient funds to meet the requirements of such withholding; and
the Corporation or Subsidiary shall be entitled to take and authorize such steps
as it may deem advisable in order to have such funds made available to the
Corporation or Subsidiary out of any funds or property due or to become due to
the holder of such Option.

         17.      Administration and Amendment of the Plan. Except as
hereinafter provided, the Board of Directors or the Committee may at any time
withdraw or from time to time amend the Plan as it relates to, and the terms and
conditions of, any Options not theretofore granted, and the

                                       8

<PAGE>

Board of Directors or the Committee, with the consent of the affected holder of
an Option, may at any time withdraw or from time to time amend the Plan as it
relates to, and the terms and conditions of, any outstanding Option.
Notwithstanding the foregoing, any amendment by the Board of Directors or the
Committee which would increase the number of Shares issuable under Options
granted pursuant to the Plan or to any individual during any calendar year or
change the class of persons to whom Options may be granted shall be subject to
the approval of the shareholders of the Corporation within one year of such
amendment.

         Determinations of the Committee as to any question which may arise with
respect to the interpretation of the provisions of the Plan and Options shall be
final. The Committee may authorize and establish such rules, regulations and
revisions thereof not inconsistent with the provisions of the Plan, as it may
deem advisable to make the Plan and Options effective or provide for their
administration, and may take such other action with regard to the Plan and
Options as it shall deem desirable to effectuate their purpose.

         18.      Effective Date. This Plan is effective June 28, 2002.

         19.      Final Grant Date. No Option shall be granted under the Plan
after June 28, 2012.

                            [SIGNATURE PAGE FOLLOWS]

                                       9

<PAGE>

         IN WITNESS WHEREOF, the Corporation has caused these presents to be
executed by its duly authorized officer as of June 28, 2002.

                          INTERNATIONAL STEEL GROUP INC.

                          By: /s/ Rodney Mott
                              -----------------------------------

                                       10

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