Document:

Exhibit 10.1

                            OREGON STEEL MILLS, INC.
                          2005 LONG-TERM INCENTIVE PLAN

APPROVED BY STOCKHOLDERS APRIL 28, 2005
EFFECTIVE JANUARY 1, 2005

SECTION 1.   PURPOSE

The purposes of the Oregon Steel Mills, Inc. 2005 Long-Term Incentive
Program (the "Plan") are to ensure that selected employees and Non-Employee
Directors of Oregon Steel Mills Inc. ("OSM" or the "Company") and its Affiliates
maintain a vested interest in the long-term growth and performance of the
Company, to align employees and Non-Employee Directors with stockholders, and to
enhance the ability of the Company and its Affiliates to attract, retain, and
motivate individuals of exceptional managerial talent upon whom, in large
measure, the sustained progress, growth, and profitability of the Company
depends.

SECTION 2.   DEFINITIONS

As used in the Plan, the following terms have the meanings set forth below:

a)   "Affiliate" is (i) any Person that directly, or through one or more
     intermediaries, controls, or is controlled by, or is under common control
     with, the Company or (ii) any entity in which the Company has a significant
     equity interest, as determined by the Committee.

b)   "Award" is any Option, Stock Appreciation Right, Restricted Stock Award,
     Performance Share, or Other Stock Unit Award.

c)   "Award Agreement" is any written or electronic agreement, contract, or
     other instrument or document evidencing any Award granted by the Committee
     under the Plan, which may, but need not, be executed or acknowledged by
     both the Company and the Participant.

d)   "Board" is the Board of Directors of the Company.

e)   "Change in Control" is the happening of any of the following events:

     i)   Any time less than a majority of the directors of the Company are
          individuals who were either elected by the Board or nominated by the
          Board of (or a committee of the Board) for election by the
          stockholders of the Company.

     ii)  At any time a majority of the Board are individuals who, in connection
          with a single transaction or a series of related transactions that
          effects a change in the ownership of the Company, were either not
          elected by the Board or not nominated by the Board (or a committee of
          the Board) for election by the stockholders of the Company;

     iii) Any person (other than (a) an employee benefit plan of the Company, or
          (b) a corporation owned directly or indirectly, by the stockholders of
          the Company in substantially the same proportions as their ownership
          of stock of the Company) is or becomes the beneficial owner (as
          defined in Rule 13d of the Securities Exchange Act of 1934, as
          amended), directly or indirectly, of securities of the Company
          representing twenty-five percent (25%) or more of the combined voting
          power of the Company's then outstanding securities; or

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     iv)  The stockholders of the Company approve (a) a plan of complete
          liquidation of the Company, other than in connection with the complete
          cessation of the business activities conducted with the Company's
          operating assets, or (b) an agreement is entered for the sale or
          disposition by the Company of all or substantially all of the
          Company's assets except pursuant to an order of a bankruptcy court
          having jurisdiction of the Company. For purposes of clause (b), the
          term "the sale or disposition by the Company of all or substantially
          all of the Company's assets" is a sale or other disposition
          transaction or series of related transactions involving assets of the
          Company or of any direct or indirect subsidiary of the Company
          (including the stock of any direct or indirect subsidiary of the
          Company) in which the value of the assets or stock being sold or
          otherwise disposed of (as measured by the purchase price being paid
          therefore or by such other method as the Board determines is
          appropriate in a case where there is no readily ascertainable purchase
          price) constitutes more than two-thirds (2/3) of the fair market value
          of the Company (as hereinafter defined). For purposes of the preceding
          sentence, the "fair market value of the Company" is the aggregate
          market value of the Company's outstanding common stock (on a fully
          diluted basis) plus the aggregate market value of the Company's other
          outstanding equity securities, if any. The aggregate market value of
          the Company's common stock is determined by multiplying the number of
          shares of the Company's common stock (on a fully diluted basis)
          outstanding on the date of the execution and delivery of a definitive
          agreement with respect to the transaction or series of related
          transactions (the "Transaction Date") by the average closing price of
          the Company's common stock for the ten (10) trading days immediately
          preceding the Transaction Date. The aggregate market value of any
          other equity securities of the Company is determined in a manner
          similar to that prescribed in the immediately preceding sentence for
          determining the aggregate market value of the Company's common stock
          or by such other method as the Board determines is appropriate;
          provided that, in the event that on the Transaction Date there is no
          public market for such common stock or other equity security, the fair
          market value of the equity securities or common stock is as reasonably
          determined by the Board.

f)   "Code" is the Internal Revenue Code of 1986, as amended from time to time,
     any successor provision, and any applicable regulations promulgated
     thereunder.

g)   "Committee" is the Compensation Committee of the Board, or any successor to
     such committee, composed of no fewer than two directors each of whom is a
     Non-Employee Director and an "outside director" within the meaning of
     Section 162(m) of the Code, and each of whom is "independent" as set forth
     in the applicable rules and regulations of the SEC and the NYSE.

h)   "Company" is Oregon Steel Mills, Inc. ("OSM"), a Delaware corporation.

i)   "Covered Employee" is a "covered employee" within the meaning of Section
     162(m)(3) of the Code.

j)   "Employee" is any employee of the Company or of any Affiliate. Unless
     otherwise determined by the Committee in its sole discretion, for purposes
     of the Plan, an employee is considered to have terminated employment and to
     have ceased to be an Employee if his or her employer ceases to be an
     Affiliate, even if he or she continues to be employed by such employer.

k)   "Exchange Act" is the Securities Exchange Act of 1934, as amended.

l)   "Fair Market Value" is, unless the Committee determines otherwise, as at
     any date the average of the highest and lowest sale prices on the NYSE for
     the Shares on such date.

m)   "Incentive Stock Option" is an Option granted under Section 6 of the Plan
     that is intended to meet the requirements of Section 422 of the Code.

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n)   "Non-Employee Director" has the meaning set forth in Rule 16b-3(b)(3)
     promulgated by the SEC under the Exchange Act, or any successor definition
     adopted by the SEC.

o)   "Nonstatutory Stock Option" or "NSO" is an Option granted under Section 6
     of the Plan that is not intended to be an Incentive Stock Option.

p)   "NYSE" is the New York Stock Exchange.

q)   "Officer" is any Employee of the Company or any Affiliate holding a
     position classified as executive officer as defined by SEC and NYSE
     guidelines.

r)   "Option" is any right granted to a Participant under Section 6 of the Plan
     allowing such Participant to purchase Shares at such price or prices and
     during such period or periods, as the Committee determines.

s)   "Other Stock Unit Award" is any right granted to a Participant by the
     Committee under Section 10 of the Plan.

t)   "Participant" is an Employee or Non-Employee Director who is selected by
     the Committee to receive an Award under the Plan.

u)   "Performance Award" is any Award of Performance Shares or Performance Units
     under Section 9 of the Plan.

v)   "Performance Period" is that period established by the Committee at the
     time any Award is granted or at any time thereafter during which any
     performance goals specified by the Committee with respect to such Award are
     to be measured.

w)   "Performance Share" is any grant under Section 9 of the Plan of a unit
     valued by reference to a designated number of Shares, which value may be
     paid to the Participant by delivery of such property as the Committee
     determines, including, without limitation, cash, Shares, or any combination
     thereof, upon achievement of such performance goals during the Performance
     Period as the Committee establishes at the time of such grant or
     thereafter.

x)   "Performance Unit" is any grant under Section 9 of the Plan of a unit
     valued by reference to a designated amount of property other than Shares,
     which value may be paid to the Participant by delivery of such property as
     the Committee determines, including, without limitation, cash, Shares, or
     any combination thereof, upon achievement of such performance goals during
     the Performance Period as the Committee establishes at the time of such
     grant or thereafter.

y)   "Person" is any individual, corporation, partnership, association,
     joint-stock company, trust, unincorporated organization, or government or
     political subdivision thereof.

z)   "Restricted Stock" is any Share issued with the restriction that the holder
     may not sell, transfer, pledge, or assign such Share and with such other
     restrictions as the Committee, in its sole discretion, may impose
     (including, without limitation, any forfeiture condition or any restriction
     on the right to vote such Share, and the right to receive any cash
     dividends), which restrictions may lapse separately or in combination at
     such time or times, in installments or otherwise, as the Committee may deem
     appropriate.

aa)  "Restricted Stock Award" is an award of Restricted Stock under Section 8 of
     the Plan.

bb)  "SEC" is the Securities and Exchange Commission.

cc)  "Shares" are, the shares of Common Stock of the Company ("OSM Shares").

dd)  "Stock Appreciation Right" or "SAR" is any right granted to a Participant
     under Section 7 of the Plan to receive, upon exercise by the Participant,
     the excess of:

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     i)   the Fair Market Value of one Share on the date of exercise or, if the
          Committee so determines in the case of any such right other than one
          related to any Incentive Stock Option, at any time during a specified
          period before the date of exercise over

     ii)  the grant price of the right on the date of grant, or if granted in
          connection with an outstanding Option on the date of grant of the
          related Option, as specified by the Committee in its sole discretion,
          which, except in the case of Substitute Awards or in connection with
          an adjustment provided in Section 4(c), may not be less than the Fair
          Market Value of one Share on such date of grant of the right or the
          related Option, as the case may be. Any payment by the Company in
          respect of such right may be made in cash, Shares, other property, or
          any combination thereof, as the Committee, in its sole discretion,
          determines.

ee)  "Subsidiary" is any corporation (other than the Company) in an unbroken
     chain of corporations beginning with the Company if, at the time of the
     granting of the Award, each of the corporations other than the last
     corporation in the unbroken chain owns stock possessing fifty percent (50%)
     or more of the total combined voting power of all classes of stock in one
     of the other corporations in the chain.

ff)  "Substitute Awards" are Awards granted or Shares issued by the Company in
     assumption of, or in substitution or exchange for, awards previously
     granted, or the right or obligation to make future awards, by a company
     acquired by the Company or with which the Company combines.

SECTION 3.   ADMINISTRATION

The Plan is administered by the Committee. The Committee has full power and
authority, subject to such orders or resolutions not inconsistent with the
provisions of the Plan as may from time to time be adopted by the Board, to:

a)   select the Employees of the Company and its Affiliates and Non-Employee
     Directors of the Company to whom Awards may from time to time be granted
     under the Plan;

b)   determine the type or types of Award to be granted to each Participant;

c)   determine the number of Shares to be covered by each Award granted;

d)   determine the terms and conditions, not inconsistent with the provisions of
     the Plan, of any Award granted;

e)   determine whether, to what extent and under what circumstances Awards may
     be settled in cash, Shares or other property or canceled or suspended;

f)   determine whether, to what extent and under what circumstances cash, Shares
     and other property and other amounts payable with respect to an Award under
     this Plan are deferred either automatically or at the election of the
     Participant;

g)   interpret and administer the Plan and any instrument or agreement entered
     into under the Plan;

h)   establish such rules and regulations and appoint such agents as it deems
     appropriate for the proper administration of the Plan; and

i)   make any other determination and take any other action that the Committee
     deems necessary or desirable for administration of the Plan.

Decisions of the Committee are final, conclusive and binding upon all persons,
including the Company, any Participant, any stockholder, and any employee of the
Company or of any Affiliate. A majority of the members of the Committee may
determine its actions and fix the time and place of its meetings.
Notwithstanding the foregoing or anything else to the contrary in the Plan, any
action or determination by the Committee specifically affecting or relating to
an Award to a Non-employee Director must be approved and ratified by the Board.

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SECTION 4.   SHARES SUBJECT TO THE PLAN

a)   Subject to adjustment as provided in Section 4(c), a total of 500,000
     Shares are available for Awards granted under the Plan; provided, that if
     any Shares subject to an Award under the Plan are forfeited or if any Award
     under the Plan based on Shares is settled for cash, or expires or otherwise
     is terminated without issuance of such Shares, the Shares subject to such
     Award are, to the extent of such cash settlement, forfeiture or
     termination, available for Awards under the Plan. In the event that any
     Option or other Award granted under the Plan is exercised through the
     delivery of Shares or in the event that withholding tax liabilities arising
     from such Option or other Award are satisfied by the withholding of Shares
     by the Company, the number of Shares available for Awards under the Plan is
     increased by the number of Shares so surrendered or withheld. In addition,
     Substitute Awards do not reduce the Shares available for grants under the
     Plan or to a Participant in any calendar year.

b)   Any Shares issued under the Plan may consist, in whole or in part, of
     authorized and unissued shares, treasury shares, or shares purchased in the
     open market or otherwise.

c)   In the event of any merger, reorganization, consolidation,
     recapitalization, stock dividend, stock split, reverse stock split,
     spin-off or similar transaction or other change in corporate structure
     affecting the Shares, such adjustments and other substitutions are made to
     the Plan and to Awards as the Committee in its sole discretion deems
     equitable or appropriate, including without limitation such adjustments

     i)   in the aggregate number, class and kind of securities which may be
          delivered under the Plan, in the aggregate or to any one Participant,

     ii)  in the number, class, kind and exercise price of securities or other
          property subject to outstanding Options, Stock Appreciation Rights or
          other Awards granted under the Plan, and

     iii) in the number, class and kind of securities or other property subject
          to Awards granted under the Plan (including, if the Committee deems
          appropriate, the substitution of similar options to purchase the
          shares of, or other awards denominated in the shares of, another
          company, or the cancellation of outstanding Awards in exchange for
          payments of cash, property or a combination thereof, or, in connection
          with the disaffiliation with the Company of a Subsidiary, arranging
          for the assumption or replacement with new Awards (by such Subsidiary
          or by an entity controlling such Subsidiary following such
          disaffiliation) of Awards held by Participants employed by the
          affected Subsidiary), as the Committee may determine to be appropriate
          in its sole discretion provided that the number of Shares subject to
          any Award is always a whole number. Shares delivered under the Plan as
          an Award or in settlement of an Award issued or made (i) upon the
          assumption, substitution, conversion or replacement of outstanding
          awards under a plan or arrangement of an entity acquired in a merger
          or other acquisition, or (ii) as a post-transaction grant under such a
          plan or arrangement of an acquired entity, will not reduce or be
          counted against the maximum number of Shares available for delivery
          under the Plan, to the extent that the exemption for transactions in
          connection with mergers and acquisitions from the stockholder approval
          requirements of the New York Stock Exchange for equity compensation
          plans applies.

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SECTION 5.   ELIGIBILITY

Any Employee or Non-Employee Director is eligible to be selected as a
Participant, provided, however, that Incentive Stock Options are granted only to
participants who are employees of the Company or a Subsidiary of the Company,
and provided that no Non-Employee Director receives Awards with an aggregate
Fair Market Value in excess of $150,000 in any calendar year.

SECTION 6.   STOCK OPTIONS

Options may be granted under the Plan to Participants either alone or in
addition to other Awards granted under the Plan. Any Option granted under the
Plan is evidenced by an Award Agreement in such form as the Committee may from
time to time approve. Any such Option is subject to the following terms and
conditions and to such additional terms and conditions, not inconsistent with
the provisions of the Plan, as the Committee deems desirable:

a)   OPTION PRICE. The purchase price per Share purchasable under an Option is
     determined by the Committee in its sole discretion; provided that, such
     purchase price is not less than the Fair Market Value of the Share on the
     date of the grant of the Option. Substitute Awards or Awards granted in
     connection with an adjustment provided for in Section 4(c) have a purchase
     price per Share that is intended to preserve the economic value of the
     Award which was replaced or adjusted.

b)   OPTION PERIOD. The term of each Option is fixed by the Committee in its
     sole discretion; provided that no Option is exercisable after the
     expiration of ten (10) years from the date the Option is granted.

c)   EXERCISABILITY. Options are exercisable at such time or times as determined
     by the Committee at or subsequent to grant; provided that, no Option will
     vest in full prior to three (3) years from the grant date.

d)   METHOD OF EXERCISE. Subject to the other provisions of the Plan, any Option
     may be exercised by the Participant in whole or in part at such time or
     times, and the Participant may make payment of the option price in such
     form or forms, including, without limitation, payment by delivery of cash,
     Shares or other consideration (including, where permitted by law and the
     Committee, Awards) having a Fair Market Value on the exercise date equal to
     the total option price, or by any combination of cash, Shares and other
     consideration, as the Committee may specify in the applicable Award
     Agreement.

e)   INCENTIVE STOCK OPTIONS or "ISOs." In accordance with rules and procedures
     established by the Committee, and except as otherwise provided in Section
     11, the aggregate Fair Market Value (determined as of the time of grant) of
     the Shares with respect to which ISOs held by any Participant which are
     exercisable for the first time by such Participant during any calendar year
     under the Plan (and under any other benefit plans of the Company or any
     Subsidiary) may not exceed $100,000 or, if different, the maximum
     limitation in effect at the time of grant under Section 422 of the Code.
     ISOs may be granted only to participants who are employees of the Company
     or a Subsidiary of the Company. The terms of any ISO granted under the Plan
     will comply in all respects with the provisions of Section 422 of the Code.
     The expiration date of any ISO granted will not exceed the period of nine
     (9) years and 364 days from the grant date. No more than 100,000 shares can
     be issued as Incentive Stock Options.

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f)   FORM OF SETTLEMENT. In its sole discretion, the Committee may provide, at
     the time of grant, that the Shares to be issued upon an Option's exercise
     are in the form of Restricted Stock or other similar securities, or may
     reserve the right so to provide after the time of grant.

SECTION 7.   STOCK APPRECIATION RIGHTS OR "SARS"

Stock Appreciation Rights may be granted under the Plan to Participants either
alone or in addition to other Awards granted under the Plan and may, but need
not, relate to a specific Option granted under Section 6. The provisions of SARs
need not be the same with respect to each recipient. Any SAR related to a
Nonstatutory Stock Option may be granted at the same time such Option is granted
or at any time thereafter before exercise or expiration of such Option. Any SAR
related to an ISO must be granted at the same time such Option is granted. In
the case of any SAR related to any Option, the SAR or its applicable portion
terminates and is no longer exercisable upon the termination or exercise of the
related Option, except that a SAR granted with respect to less than the full
number of Shares covered by a related Option is not reduced until the exercise
or termination of the related Option exceeds the number of Shares not covered by
the SAR. Any Option related to any SAR is no longer exercisable to the extent
the related SAR has been exercised. The Committee may impose such conditions or
restrictions on the exercise of any SAR as it deems appropriate, provided that
no SAR may have a term that is longer than ten (10) years.

SECTION 8.   RESTRICTED STOCK

a)   ISSUANCE. A Restricted Stock Award is subject to restrictions imposed by
     the Committee during a period of time specified by the Committee (the
     "Restriction Period"). Restricted Stock Awards may be issued under the Plan
     to Participants either alone or in addition to other Awards granted under
     the Plan. The provisions of Restricted Stock Awards need not be the same
     with respect to each recipient.

b)   REGISTRATION. Any Restricted Stock issued under the Plan may be evidenced
     in such manner as the Committee in its sole discretion deems appropriate,
     including, without limitation, book-entry registration or issuance of a
     stock certificate or certificates, unless otherwise specified by the
     Committee. In the event any stock certificate is issued in respect of
     shares of Restricted Stock awarded under the Plan, such certificate is
     registered in the name of the Participant, and bears an appropriate legend
     referring to the terms, conditions, and restrictions applicable to such
     Award.

c)   FORFEITURE. Except as otherwise determined by the Committee at the time of
     grant or thereafter, upon termination of employment for any reason during
     the Restriction Period, all Shares of Restricted Stock still subject to
     forfeiture are forfeited by the Participant and reacquired by the Company.
     Unrestricted Shares, evidenced in such manner as the Committee deems
     appropriate, are issued to the grantee promptly after the period of
     forfeiture, as determined or modified by the Committee, expires.

d)   MINIMUM VESTING CONDITION. The minimum Restriction Period applicable to any
     Restricted Stock Award that is not subject to performance conditions
     restricting the grant size, the transfer of the shares, or the vesting of
     the award is two (2) years from the date of grant; provided, however, that
     a Restriction Period of less than two (2) years may be approved under the
     Plan for such Awards with respect to up to 50,000 Shares.

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SECTION 9.   PERFORMANCE AWARDS

Performance Awards may be issued under the Plan to Participants either alone or
in addition to other Awards granted under the Plan. The performance criteria to
be achieved during any Performance Period and the length of the Performance
Period are determined by the Committee upon the grant of each Performance Award.
Except as provided in Section 11, Performance Awards are distributed only after
the end of the relevant Performance Period. Performance Awards may be paid in
cash, Shares, other property, or any combination thereof, in the sole discretion
of the Committee at the time of payment. The performance levels to be achieved
for each Performance Period and the amount of the Award to be distributed are
conclusively determined by the Committee. Performance Awards may be paid in a
lump sum or in installments following the close of the Performance Period.

SECTION 10.  OTHER STOCK UNIT AWARDS

a)   STOCK AND ADMINISTRATION. Other Awards of Shares and other Awards that are
     valued in whole or in part by reference to, or are otherwise based on,
     Shares or other property ("Other Stock Unit Awards") may be granted under
     the Plan to Participants, either alone or in addition to other Awards
     granted under the Plan. Other Stock Unit Awards may be paid in Shares, cash
     or any other form of property as the Committee determines. Subject to the
     provisions of the Plan, the Committee has sole and complete authority to
     determine the Employees of the Company and its Affiliates and Non-Employee
     Directors to whom and the time or times at which such Awards are made, the
     number of Shares to be granted pursuant to such Awards, and all other
     conditions of the Awards. The provisions of Other Stock Unit Awards need
     not be the same with respect to each recipient.

b)   TERMS AND CONDITIONS. Subject to the provisions of this Plan and any
     applicable Award Agreement, Awards and Shares subject to Awards made under
     this Section 10, may not be sold, assigned, transferred, pledged or
     otherwise encumbered prior to the date on which the Shares are issued, or,
     if later, the date on which any applicable restriction, performance or
     deferral period lapses. For any Award or Shares subject to any Award made
     under this Section 10 the transferability and vesting of which are
     conditioned only on the passage of time, such restriction period is a
     minimum of three (3) years for full vesting.

SECTION 11.  CHANGE IN CONTROL PROVISIONS

Notwithstanding any other provision of the Plan to the contrary, unless the
Committee determines otherwise at the time of grant with respect to a particular
Award, in the event of a Change in Control, as of the date such Change in
Control is determined to have occurred;

a)   any Options and SARs outstanding which are not then exercisable and vested
     become fully exercisable and vested;

b)   any Options and SARs outstanding which are then vested and exercisable,
     including newly vested Options and SARs as a result of (a) above, remain
     exercisable as provided in the Award Agreement;

c)   the restrictions and deferral limitations applicable to any Restricted
     Stock lapse, and such Restricted Stock becomes free of all restrictions and
     limitations and become fully vested and transferable;

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d)   all Performance Awards are considered to be prorated, and any deferral or
     other restriction lapses and such Performance Awards are immediately
     settled or distributed in accordance with policies established by the
     Committee; and

e)   the restrictions and deferral limitations and other conditions applicable
     to any Other Stock Unit Awards or any other Awards lapses, and such Other
     Stock Unit Awards or such other Awards become free of all restrictions,
     limitations or conditions and become fully vested and transferable to the
     full extent of the Award not previously forfeited or vested.

SECTION 12.  CODE SECTION 162(m) PROVISIONS

a)   Notwithstanding any other provision of this Plan, if the Committee
     determines at the time Restricted Stock, a Performance Award or an Other
     Stock Unit Award is granted to a Participant who is then an Officer that
     such Participant is, or may be as of the end of the tax year in which the
     Company would claim a tax deduction in connection with such Award, a
     Covered Employee, then the Committee may provide that this Section 12 is
     applicable to such Award.

b)   If an Award is subject to this Section 12, then the lapsing of any
     restrictions and the related distribution of cash, Shares or other
     property, as applicable, are subject to the achievement of one or more
     objective performance goals established by the Committee, which are based
     on the attainment of specified levels of one or any combination of the
     following: net cash provided by operating activities, earnings per share
     from continuing operations, operating income, revenues, gross margin,
     EBITDA, EBITDA per ton of steel shipped, return on operating assets, return
     on equity, economic value added, stock price appreciation, total
     stockholder return, or cost control, of the Company or the Affiliate or
     division of the Company for or within which the Participant is primarily
     employed. Such performance goals also may be based upon the achievement of
     specified levels of Company performance (or performance of applicable
     Affiliate or division of the Company) under one or more of the measures
     described above relative to the performance of other corporations. Such
     performance goals are set by the Committee within the time period
     prescribed by, and otherwise comply with the requirements of, Section
     162(m) of the Code.

c)   Notwithstanding any provision of this Plan other than Section 11, with
     respect to any Award that is subject to this Section 12, the Committee may
     adjust downwards, but not upwards, the amount payable pursuant to such
     Award, and the Committee may not waive the achievement of the applicable
     performance goals except in the case of the death or disability of the
     Participant.

d)   The Committee has the power to impose such other restrictions on Awards
     subject to this Section 12 as it may deem necessary or appropriate to
     ensure that such Awards satisfy all requirements for "performance-based
     compensation" within the meaning of Section 162(m) (4) (C) of the Code.

e)   Notwithstanding any provision of this Plan other than Section 4(c),
     commencing with calendar year 2005,

     i)   no Participant may be granted in any twelve (12) month period an
          aggregate amount of Options and/or SARs with respect to more than
          150,000 Shares, and

     ii)  no Participant may be granted in any twelve (12) month period an
          aggregate amount of Restricted Stock, Performance Awards or Other
          Stock Unit Awards, with respect to more than 75,000 Shares (or cash
          amounts based on the value of more than 75,000 Shares); except that an
          external hire may be granted up to an aggregate amount of Performance
          Awards or Other Stock Unit Awards with respect to no more than 150,000
          Shares (or cash amounts based on the value of no more than 150,000
          Shares).

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SECTION 13.  AMENDMENTS AND TERMINATION

The Board may amend, alter, suspend, discontinue or terminate the Plan or any
portion of the Plan at any time; provided that no such amendment, alteration,
suspension, discontinuation or termination is made without

     i)   stockholder approval if such approval is necessary to qualify for or
          comply with any tax or regulatory requirement for which or with which
          the Board deems it necessary or desirable to qualify or comply or

     ii)  the consent of the affected Participant, if such action would impair
          the rights of such Participant under any outstanding Award.
          Notwithstanding anything to the contrary herein, the Committee may
          amend the Plan in such manner as may be necessary so as to have the
          Plan conform to local rules and regulations in any jurisdiction
          outside the United States.

The Committee may amend the terms of any Award granted, prospectively or
retroactively, but no such amendment may impair the rights of any Participant
without his or her consent. Notwithstanding any provision of this plan, the
Committee does not have the authority to take any action that would require
stockholder approval under applicable SEC or NYSE rules including amending the
terms of any Option to reduce the option price; nor may the Committee, without
prior stockholder approval, cancel any outstanding Option and replace it with a
new Option with a lower option price, or where the economic effect would be the
same as reducing the option price of the canceled Option; nor may the Committee,
without prior stockholder approval, provide for any Option to be exchanged for
any other Award under this Plan.

SECTION 14.  GENERAL PROVISIONS

a)   Unless the Committee determines otherwise at the time the Award is granted
     or thereafter:

     i)   no Award, and no Shares subject to Awards described in Section 10
          which have not been issued or as to which any applicable restriction,
          performance or deferral period has not lapsed, may be sold, assigned,
          transferred, pledged or otherwise encumbered, except by will or by the
          laws of descent and distribution; provided that, if so determined by
          the Committee, a Participant may, in the manner established by the
          Committee, designate a beneficiary to exercise the rights of the
          Participant with respect to any Award upon the death of the
          Participant; and

     ii)  each Award is exercisable, during the Participant's lifetime, only by
          the Participant or, if permissible under applicable law, by the
          Participant's guardian or legal representative.

b)   The term of each Award is for such period of months or years from the date
     of its grant as may be determined by the Committee; except as provided in
     Section 6.

c)   No Employee or Participant has any claim to be granted any Award under the
     Plan and there is no obligation for uniformity of treatment of Employees or
     Participants under the Plan.

d)   The prospective recipient of any Award under the Plan will not, with
     respect to such Award, be deemed to have become a Participant, or to have
     any rights with respect to such Award, until and unless such recipient, to
     the extent required by the Committee, has either executed an agreement or
     other instrument evidencing the Award and delivered a copy to the Company,
     or otherwise evidenced acceptance of the then applicable terms and
     conditions.

                                                                   page 10 of 12
<PAGE>

e)   Except to the extent that such action would cause an Award subject to
     Section 12 not to qualify for the exemption from the limitation on
     deductibility imposed by Section 162(m) of the Code that is set forth in
     Section 162(m)(4)(C) of the Code, the Committee is authorized to make
     adjustments in performance award criteria or in the terms and conditions of
     other Awards in recognition of unusual or nonrecurring events affecting the
     Company or its financial statements or changes in applicable laws,
     regulations or accounting principles. The Committee may correct any defect,
     supply any omission or reconcile any inconsistency in the Plan or any Award
     in the manner and to the extent it deems desirable to carry it into effect.
     In the event the Company assumes outstanding employee benefit awards or the
     right or obligation to make future such awards in connection with the
     acquisition of or combination with another corporation or business entity,
     the Committee may, in its discretion, make such adjustments in the terms of
     Awards under the Plan as it deems appropriate.

f)   Notwithstanding anything in the Plan to the contrary, the Committee has the
     authority under the Plan to determine (and may so provide in any Award
     Agreement) that in the event of serious misconduct by the Participant or
     any activity of a Participant in competition with the business of the
     Company or any Subsidiary or Affiliate, any outstanding Award granted to
     such Participant may be cancelled, in whole or in part, whether or not
     vested or deferred. The determination of whether a Participant has engaged
     in a serious breach of conduct or any activity in competition with the
     business of the Company or any Subsidiary or Affiliate is determined by the
     Committee in good faith and in its sole discretion. This Section 14(f) has
     no application following a Change in Control.

g)   All certificates for Shares delivered under the Plan pursuant to any Award
     are subject to such stock-transfer orders and other restrictions as the
     Committee may deem advisable under the rules, regulations, and other
     requirements of the SEC, any stock exchange upon which the Shares are then
     listed, and any applicable Federal or state securities law, and the
     Committee may cause a legend or legends to be put on any such certificates
     to make appropriate reference to such restrictions.

h)   No Award granted under the Plan may be construed as an offer to sell
     securities of the Company, and no such offer may be outstanding, unless and
     until the Committee in its sole discretion has determined that any such
     offer, if made, would be in compliance with all applicable requirements of
     the U.S. federal securities laws and any other laws to which such offer, if
     made, would be subject.

i)   The Committee is authorized to establish procedures for the deferral of the
     payment of any Award. Subject to the provisions of the Plan and any Award
     Agreement, the recipient of an Award (including, without limitation, any
     deferred Award) may, if so determined by the Committee, be entitled to
     receive, currently or on a deferred basis, cash dividends, or cash payments
     in amounts equivalent to cash dividends on Shares ("dividend equivalents"),
     with respect to the number of Shares covered by the Award, as determined by
     the Committee, in its sole discretion, and the Committee may provide that
     such amounts (if any) are deemed to have been reinvested in additional
     Shares or otherwise reinvested.

j)   Except as otherwise required in any applicable Award Agreement or by the
     terms of the Plan, recipients of Awards under the Plan are not required to
     make any payment or provide consideration other than the rendering of
     services.

k)   The Committee may delegate to one or more Directors, Officers, or a
     committee of Officers the right to grant Awards to Employees who are not
     officers or directors of the Company and to cancel or suspend Awards to
     Employees who are not officers or directors of the Company.

                                                                   page 11 of 12
<PAGE>

l)   The Company is authorized to withhold from any Award granted or payment due
     under the Plan the amount of withholding taxes due in respect of an Award
     or payment under the Plan and to take such other action as may be necessary
     in the opinion of the Company to satisfy all obligations for the payment of
     such taxes not to exceed the statutory minimum withholding obligation. The
     Committee is authorized to establish procedures for election by
     Participants to satisfy such obligations for the payment of such taxes by
     delivery of or transfer of Shares to the Company, or by directing the
     Company to retain Shares otherwise deliverable in connection with the
     Award.

m)   Nothing contained in this Plan prevents the Board from adopting other or
     additional compensation arrangements, subject to stockholder approval if
     such approval is required; and such arrangements may be either generally
     applicable or applicable only in specific cases.

n)   The validity, construction, and effect of the Plan and any rules and
     regulations relating to the Plan are determined in accordance with the laws
     of the State of Oregon and applicable Federal law.

o)   If any provision of this Plan is or becomes or is deemed invalid, illegal
     or unenforceable in any jurisdiction, or would disqualify the Plan or any
     Award under any law deemed applicable by the Committee, such provision is
     construed or deemed amended to conform to applicable laws or if it cannot
     be construed or deemed amended without, in the determination of the
     Committee, materially altering the intent of the Plan, it is stricken and
     the remainder of the Plan remains in full force and effect.

p)   Awards may be granted to Participants who are foreign nationals or employed
     outside the United States, or both, on such terms and conditions different
     from those applicable to Awards to Employees employed in the United States
     as may, in the judgment of the Committee, be necessary or desirable in
     order to recognize differences in local law or tax policy. The Committee
     also may impose conditions on the exercise or vesting of Awards in order to
     minimize the Company's obligation with respect to tax equalization for
     Employees on assignments outside their home country.

SECTION 15.  EFFECTIVE DATE OF PLAN

The Plan is effective as of the date the stockholders approve the Plan in 2005.

SECTION 16.  TERM OF PLAN

No Award may be granted under the Plan after May 31, 2010, but any Award granted
may extend beyond that date.

                                                                   page 12 of 12Exhibit 10.2

                               OREGON STEEL MILLS
              2005 PROGRAM FOR EXECUTIVE OFFICERS AND KEY EMPLOYEES
                     UNDER THE 2005 LONG-TERM INCENTIVE PLAN
1.  PURPOSE

The purpose of the 2005 Long-Term Incentive Plan ("LTIP", or "the Plan") is to
increase senior management's focus on the Company's long-term performance, to
encourage retention of executives and key employees, and to provide executives
and key employees with a motivating incentive opportunity. This 2005 Program for
Executive Officers and Key Employees ("2005 Program") was approved by the Board
on April 28, 2005 to grant Performance Awards under the Plan. Capitalized terms
not defined in this document will have the meanings given in the Plan.

2.  PROGRAM ADMINISTRATION

The Board of Directors ("Board") has primary responsibility for interpretation
and administration of the terms and provisions of the Plan and the 2005 Program.
The Board may act through its Compensation Committee ("Committee"). Such
responsibility includes, but is not limited to, selecting plan participants,
setting performance targets, conducting consultations with officers and other
executives of the Company as needed to perform the Board's duties, promulgating
necessary rules, guidelines, and procedures for Plan and 2005 Program
administration, and engaging or employing counsel, advisors, or consultants, and
any other persons as it may deem necessary or expedient for the performance of
its responsibilities under the Plan and the 2005 Program.

The Vice President Administration will serve the Committee as the chief
personnel resource for matters relating to the Plan and 2005 Program. While the
Committee is free to delegate any duties and responsibilities it deems
appropriate, all decisions regarding selection for participation, performance
and payments under the Plan and 2005 Program will be made solely by the
Committee and to the extent required, by the Board. All decisions,
determinations and interpretations of the Committee with respect to the Plan and
2005 Program will be binding upon all persons.

3.  PROGRAM PARTICIPATION

        3.1. ELIGIBILITY

Participation in the 2005 Program is limited to executive officers, senior
management and certain key employees who can have a major impact on the
long-term success of the Company. The CEO will recommend Participants subject to
Committee approval.

                                                                     page 1 of 8
<PAGE>

4.  PERFORMANCE AWARDS

        4.1. PERFORMANCE PERIODS

Each Performance Period shall consist of a period of three consecutive Company
fiscal years, with the Performance Period for the 2005 Program commencing on
January 1, 2005 and ending on December 31, 2007.

Performance Periods of future Performance Awards will overlap and provide a
payout opportunity annually beginning in Q1 2008.

[CHART APPEARS HERE]

        4.2. TARGET PERFORMANCE AWARD

The Target Performance Award Value ("Target Value") is set by the Committee for
each Participant at the beginning of each Performance Period. The Target Value
is expressed in US dollars and is based on an assessment of external market data
as well as the Participant's level of responsibility within the Company.

The Target Performance Share Grant ("Target Grant") is determined by dividing
the Target Value by the "Share Price" (defined as the prior twenty-trading-day
average closing price) as of the first day of the Performance Period. The Target
Grant will be rounded to the nearest whole number of Performance Shares.

        Example Calculation of Target Grant at Target Value:

        Target Value: $100,000
        Average OSM Share Price: $20.00
        Target Grant:  $100,000 / $20.00 = 5,000 Performance Shares

                                                                     page 2 of 8
<PAGE>

Once the Target Grant is set for a three-year Performance Period it will not be
changed unless otherwise provided in the 2005 Program or the Plan.

        4.3. PERFORMANCE AWARD DETERMINATION

Performance Shares are earned at the end of the three-year Performance Period
subject to the following performance measures as approved by the Committee.

        4.3.1. TOTAL SHAREHOLDER RETURN RELATIVE TO INDUSTRY PEER GROUP.

Fifty percent (50%) of the Target Grant for a Performance Period is earned based
on Total Shareholder Return ("TSR") relative to a select steel industry peer
group ("Peer Group" defined in Section 4.3.2) TSR is defined as the stock price
appreciation including reinvestment of dividends during the Performance Period.

        The Relative Total Shareholder Return ("rTSR") performance will be
        calibrated as follows:

            Superior       >=  75th Percentile Performance
            Target          =  50th Percentile Performance
            Threshold       =  25th Percentile Performance

The percentile rank of the Company will be determined through a rank ordering of
the Peer Group and the Company. The top ranked company will be the 100th
percentile and the bottom ranked company will be the 0th percentile. The
"PERCENTRANK" function of Microsoft Excel will indicate the Company's relative
rank. The Performance Award determination for this measure will be calculated as
outlined in Sections 5.1 and 5.2.

        4.3.2. PEER GROUP

For the rTSR award determination, a performance peer group ("Peer Group") is
required. The Peer Group for a Performance Period will be defined at the
beginning of the Performance Period, approved by the Committee and documented in
an Addendum to this 2005 Program. The Peer Group may be modified for future
Performance Periods. The Peer Group may be adjusted at the discretion of the
Committee; however, to the extent any modification of the Peer Group impacts the
Performance Award to be received by a Participant, such modification will be
made within the time period prescribed by Section 162(m) of the Code and related
regulations.

In general, if a Peer Group company is acquired or otherwise ceases to have a
publicly traded common stock during the Performance Period, it will be dropped
from the Peer Group. If, however, the company ceases to have a tradable common
stock for reasons of bankruptcy, liquidation or other indication of financial
distress, the company will remain in the Peer Group as the lowest performing
company. All decisions regarding the above will be made by the Committee and are
final.

                                                                     page 3 of 8
<PAGE>

        4.3.3. COMPANY FINANCIAL MEASURE.

Fifty percent (50%) of the Target Grant for a Performance Period is earned based
on the three-year average EBITDA per ton of steel shipped. Target- and
range-setting for the Company's EBITDA measure is based on OSM's internal
financial plan and forecasts, as well as any other information that the
Committee may choose to use. The EBITDA measure will be expressed in terms of a
minimum "Threshold Performance", "Target Performance" and "Superior Performance"
for the three-year Performance Period. The CEO will recommend, and the Committee
will approve, the Threshold, Target and Superior levels of performance for a
Performance Period and document the approved levels in an Addendum to this 2005
Program.

The Performance Award determination for this measure will be calculated as
outlined in 5.1 and 5.2.

Once targets and ranges are set for a three-year Performance Period, they may
not be changed. New performance assumptions may be incorporated in targets and
ranges set for future Performance Periods.

5.  PAYMENT OF PERFORMANCE AWARD

        5.1. CALCULATION OF ACTUAL PERFORMANCE AWARD

The actual Performance Award is expressed as a number of Performance Shares and
is determined by the Participant's Target Grant (see Section 4.2) and the actual
performance level that the Company achieves over the three-year Performance
Period. See Exhibits for example award calculations under different scenarios.

        The actual Performance Award will be calibrated as follows:

                            Multiple Applied to # of
            Performance     Performance Shares of
            Level           Target Grant
            -----------     ------------------------
            Superior        2.00 X
            Target          1.00 X
            Threshold       0.25 X

        5.2. INTERPOLATION OF PERFORMANCE AWARDS BETWEEN PERFORMANCE LEVELS

Linear interpolation will be used to determine actual awards when Company
performance is between performance levels. No awards will be earned if Company
performance is not at or above threshold level for either the rTSR or Company
financial measures.

                                                                     page 4 of 8
<PAGE>

If at least the threshold is achieved in a category, then Performance Shares
will be earned in an amount equal to the number of the award's target shares
tied to that category, multiplied by a percentage determined by a straight-line
interpolation between the level of the Company's performance in that category
and the above-stated payout percentages.

        5.3. FORM AND MANNER OF PAYOUT

As indicated above and subject to Section 6 below, the actual Performance Award
will be paid out as follows: Forty percent (40%) of the Performance Award will
be paid out in OSM Shares. The remaining sixty percent (60%) will be payable in
cash in an amount determined by multiplying the number of remaining Performance
Shares by the prior twenty-trading-day average closing price as of the last day
of the Performance Period.

The delivery of OSM Shares and payment of cash will be made as soon as
reasonably practicable following the Committee's certification of performance
results. In general, payments will be made before the close of the first quarter
of the fiscal year following the end of the Performance Period ("Payment Date").

        5.4. TAXATION

All Performance Awards are subject to any applicable taxes immediately upon
payout. The Company will withhold any sums that federal, state, local, or
foreign tax law requires to be withheld with respect to award payments. All
applicable taxes will be subtracted from the cash amount payable to the
Participant.

6.  2005 PROGRAM GUIDELINES

        6.1. RETIREMENT

Upon retirement on or after age 55 with 15 years of pension eligible Company
service under the Company's pension plan applicable to the Participant, or on or
after age 65 ("Retirement"), for all Performance Periods commenced at the time
of Retirement, a pro-rata Performance Award will be calculated based on actual
performance at the end of the Performance Period and paid contingent upon
receipt of any separation agreement requested by the Company. Unless otherwise
specified in the separation agreement, such payments will be made on the
applicable Payment Date for the Performance Award as prorated for service during
the period.

                                                                     page 5 of 8
<PAGE>

        6.2. VOLUNTARY TERMINATION AND INVOLUNTARY TERMINATION FOR CAUSE

Upon voluntary termination other than Retirement or involuntary termination for
Cause, any Performance Awards not paid by the date of termination are completely
forfeited, including Performance Awards earned but unpaid from completed
Performance Periods and Performance Awards not yet earned. Involuntary
termination of your employment for "Cause" means any act or omission that is: a
breach of your obligations to the Company, including but not limited to
substantial absence without cause, serious breach of confidence, criminal
offenses committed at the place of work or outside of it, personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful violation of any
law, rule, or regulation (other than traffic violations or similar offenses).

        6.3. INVOLUNTARY TERMINATION WITHOUT CAUSE

Upon involuntary termination without Cause (as defined in 6.2), (i) if the date
of termination is at least 24 months into the Performance Period, a pro-rata
Performance Award will be calculated based on actual performance at the end of
the Performance Period and paid contingent upon any separation agreement
requested by the Company; and (ii) all other Performance Awards for all other
Performance Periods will be completely forfeited at the date of termination. Any
payments will be made on the applicable Payment Date for the Performance Award
as prorated for service during the period.

        6.4. DEATH AND LONG-TERM DISABILITY

If termination of a Participant's employment occurs during the Performance
Period for reason of death or Long-Term Disability as defined in the Company's
Long-Term Disability Policy then in effect, a pro-rata Performance Award will be
calculated based on actual performance at the end of the Performance Period.
Unless otherwise specified in the separation agreement, such payments will be
made on the applicable Payment Date for the Performance Award as prorated for
service during the period. In the event of death, the payment will be made to
the Employee's estate.

        6.5. CHANGE OF CONTROL

In the event that a Change in Control (as defined in the Plan) is deemed to have
occurred at any time within a Performance Period, a pro-rata Performance Award
will be calculated based on actual performance as of the date of the Change in
Control and paid as soon as reasonably practical following the Change in
Control.

        6.6. NEW HIRES AND PROMOTIONS INTO ELIGIBILITY

Subject to approval by the Committee, any individual who is hired or promoted
into a position that is selected for participation in the 2005 Program during
the first twelve months of a Performance Period will be eligible to participate
in such Performance Period. The Target Value and Target Grant granted will be
prorated for the portion of the Performance Period in which he or she is a
Participant.

                                                                     page 6 of 8
<PAGE>

Individuals who are hired or promoted into a position that is selected for
participation in the 2005 Program after the first twelve months of a Performance
Period will not be eligible for that Performance Period but will be eligible for
subsequent Performance Periods to the extent approved by the Committee.

        6.7. PROMOTIONS WITHIN 2005 PROGRAM ELIGIBLE POSITIONS

For any current Participant who is promoted to another 2005 Program-eligible
position, no changes will be made to grant levels for all Performance Periods
commenced by the date of promotion. Grant levels for such Participants may be
reviewed by the Committee for subsequent Performance Periods.

        6.8. REMOVAL FROM 2005 PROGRAM

A Participant may be removed from further participation in the 2005 Program by
the Committee and such removal shall be effective as of the date determined by
the Committee. In such a case, the Participant shall be eligible to receive a
pro-rated Performance Award, if any, based on his or her period of participation
during the Performance Period ending in the year in which the Participant's
removal occurred.

7.  MISCELLANEOUS PROVISIONS

        7.1. ASSIGNMENT OR TRANSFER

No Performance Awards or other interest or rights under the 2005 Program or the
Plan may be sold, assigned, transferred, pledged or otherwise encumbered, except
by will or by the laws of descent and distribution; provided that, if so
determined by the Committee, a Participant may, in the mender established by the
Committee, designate a beneficiary to exercise the rights of the Participant
with respect to any Performance Award upon the death of the Participant.

        7.2. COSTS AND EXPENSES

The costs and expenses of administering the 2005 Program and Plan shall be borne
by the Company and shall not be directly charged against any Participant.

        7.3. EFFECT ON EMPLOYMENT

Nothing contained in the Plan, 2005 Program or any related agreement shall
affect, or be construed as affecting, the terms of employment of any Participant
except to the extent specifically provided. Nothing contained in this Plan, the
2005 Program or any related agreement shall impose, or be construed as imposing,
any obligation on (i) the Company to continue the employment of any Participant;
or (ii) any Participant to remain in the employ of the Company.

                                                                     page 7 of 8
<PAGE>

        7.4. NOT PART OF OTHER BENEFITS

The benefits provided in 2005 Program and the Plan shall not be deemed a part of
any other benefit provided by the Company to its employees. The Company assumes
and shall have no obligation to Participants except as expressly provided in the
Plan or the 2005 Program.

        7.5. AMENDMENT OR TERMINATION OF THE 2005 PROGRAM

The Committee shall have the right to amend or terminate the 2005 Program at any
time in any way provided, that no such amendment or termination is made without
the consent of the affected Participant, if such action would impair the right
of such Participant under any outstanding Performance Award.

        7.6. PLAN TERMS

The terms of the Plan are incorporated by reference into the 2005 Program. The
Company and the Committee retain all rights and authority under the Plan and
2005 Program with respect to a Performance Award. Any conflict between the Plan
and the 2005 Program will be resolved in favor of the Plan.

        7.7. NO RIGHTS OF STOCK OWNERSHIP

Any Performance Award will not entitle a Participant to any interest in or to
any dividend, voting, or other rights normally attributable to common stock
ownership.

        7.8. DISPUTE RESOLUTION

Any dispute or disagreement with arises under, or as a result of, or pursuant
to, this 2005 Program will be determined by the Company's Board or Committee in
its absolute and uncontrolled discretion, and any such determination or any
other determination by the Board or Committee under or pursuant to this 2005
Program and any interpretation by the Board or Committee of the terms of the
2005 Program will be final, binding and conclusive on all persons affected.

                                                                     page 8 of 8

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