Document:

<PAGE>   1

                                                                 EXHIBIT (4) (d)

                                 AMENDMENT NO. 3
                                       TO
                           LOAN AND SECURITY AGREEMENT

     THIS AMENDMENT NO. 3 dated as of December 17, 1999 (this "Amendment") is
entered into among BANK OF AMERICA, NATIONAL ASSOCIATION ("B of A"), as
successor to BankAmerica Business Credit, Inc., Bank of America, National Trust
and Savings Association and NationsBank, N.A., and GMAC COMMERCIAL CREDIT LLC, a
New York limited liability company ("GMAC"), as successor to BNY Financial
Corporation, formerly known as Bank of New York Commercial Corporation, (B of A
and GMAC and their respective successors and assigns being sometimes hereinafter
referred to collectively as the "Lenders" and each of B of A and GMAC and its
successors and assigns being sometimes hereinafter referred to individually as a
"Lender"), B of A (as successor to BankAmerica Business Credit, Inc. and Bank of
America, National Trust and Savings Association), as agent for the Lenders (in
such capacity as agent, the "Agent"), LACLEDE STEEL COMPANY, a Delaware
corporation, as debtor and debtor-in-possession (the "Parent"), LACLEDE CHAIN
MANUFACTURING COMPANY, a Delaware corporation, as debtor and
debtor-in-possession ("Laclede Chain"), and LACLEDE MID AMERICA INC., an Indiana
corporation, as debtor and debtor-in-possession ("Laclede Mid America") (the
Parent, Laclede Chain and Laclede Mid America being sometimes hereinafter
referred to collectively as the "Borrowers" and each of the Parent, Laclede
Chain and Laclede Mid America being sometimes hereinafter referred to
individually as a "Borrower").

                              W I T N E S S E T H:

     WHEREAS, the Borrowers, the Lenders and the Agent are parties to a certain
Loan and Security Agreement dated as of December 1, 1998, as amended by
Amendment No. 1 dated as of December 23, 1998 and Amendment No. 2 dated as of
July 1, 1999 (such Loan and Security Agreement, as so amended, the "Loan
Agreement," capitalized terms used herein without definition having the meanings
given such terms in the Loan Agreement, as amended by this Amendment); and

     WHEREAS, the Borrowers, the Lenders and the Agent have agreed to amend the
Loan Agreement on the terms and conditions hereinafter set forth;

     NOW, THEREFORE, in consideration of the premises set forth above, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Borrowers, the Lenders and the Agent hereby agree as
follows:

     Section 1. Amendment of the Loan Agreement. Subject to the fulfillment of
the conditions precedent set forth in Section 4 below, the Loan Agreement is
amended as follows:

     (a) Section 1.1 is amended by deleting the definitions of "Agreed
Pre-Petition Outstanding Balance" and "Inventory Sublimit Amount."

     (b) Section 1.1 is further amended by amending and restating the definition
of "Bank of America" as follows:

     "Bank of America" means Bank of America, National Association, a national
banking association, or any successor entity thereto.

     (c) Section 1.1 is further amended by amending and restating the definition
of "Base Rate Loan" as follows:

<PAGE>   2

          "Base Rate Loan" means a Post-Petition Revolving Loan or Post-Petition
     Term Loan during any period in which it bears interest at the rate provided
     in Section 3.1(i).

     (d) Section 1.1 is further amended by amending and restating the definition
of "LIBOR Loan" as follows:

          "LIBOR Loan" means a Post-Petition Revolving Loan or Post-Petition
     Term Loan during any period in which it bears interest at the rate provided
     in Section 3.1(ii).

     (e) Section 1.1 is further amended by amending and restating clause (a) of
the definition of "Maximum Revolver Amount" as follows:

     (a) the lesser of

          (i) the Revolver Facility minus the amount of Term Loans outstanding
          at such time and the amount of any Pre-Petition Obligations
          outstanding at such time; or

          (ii) (A) eighty-five percent (85.0%) of the Net Amount of the Eligible
          Accounts; plus (B) the lesser of (1) sixty-five percent (65.0%) of the
          value of Net Eligible Inventory; and (2) $38,500,000; provided, that
          the amount of Revolving Loans based upon Eligible Inventory consisting
          of supplies shall be limited to the Supplies Inventory Sublimit
          Amount; plus (C) the amount of the Additional Facility at such time
          minus (D) the amount of Pre-Petition Revolving Loans outstanding at
          such time;

     (f) Section 1.1 is further amended by adding the following definitions in
alphabetical order:

          "Post-Petition Term Loans" means Term Loans made pursuant to this
          Agreement.

          "Pre-Petition Term Loans" means Term Loans made pursuant to the
          Original Agreement.

          "Supplies Inventory Sublimit Amount" means the amount set forth below
     for the period indicated:

<TABLE>
<CAPTION>
          Period                                                 Amount
          ------                                                 ------
<S>                                                             <C>
          Effective date of Amendment
          No. 3 hereto through
          December 31, 1999                                      $ 6,000,000
          January 2000                                             6,000,000
          February 2000                                            5,750,000
          March 2000                                               5,500,000
          April 2000                                               5,250,000
          May 2000                                                 5,000,000
          June 2000                                                4,750,000
</TABLE>

In determining the Eligibility Inventory that is subject to the Supplies
Inventory Sublimit Amount, zinc and pipe couplings will be treated as raw
materials rather than supplies.

     (g) Section 1.1 is further amended by amending and restating the definition
of "Stated Termination Date" as follows:

<PAGE>   3

          "Stated Termination Date" means June 30, 2000.

          (h) Section 1.1 is further amended by amending and restating the
     definition of "Term Loans" as follows:

          "Term Loans" means, collectively, Pre-Petition Term Loans and
     Post-Petition Term Loans.

          (i) Section 3.1 is amended and restated as follows:

          3.1 Interest Rates. All outstanding Post-Petition Obligations shall
     bear interest on the unpaid principal amount thereof (including, to the
     extent permitted by law, on interest thereon not paid when due) from the
     date made until paid in full in cash at a rate determined by reference to
     the Base Rate or the LIBO Rate and Sections 3.1(i) or (ii), as applicable,
     but not to exceed the Maximum Rate described in Section 3.4. Subject to the
     provisions of Section 3.2, any of the Post-Petition Revolving Loans or
     Post-Petition Term Loans may be converted into, or continued as, Base Rate
     Loans or LIBOR Loans in the manner provided in Section 3.2. If at any time
     Post-Petition Revolving Loans or Post-Petition Term Loans are outstanding
     with respect to which notice has not been delivered to the Agent in
     accordance with the terms of this Agreement specifying the basis for
     determining the interest rate applicable thereto, then those Post-Petition
     Revolving Loans or Post-Petition Term Loans shall be Base Rate Loans and
     shall bear interest at a rate determined by reference to the Base Rate
     until notice to the contrary has been given to the Agent and such notice
     has become effective. Except as otherwise provided herein, the outstanding
     Post-Petition Obligations shall bear interest as follows:

          (i) For all Post-Petition Revolving Loans, Post-Petition Term Loans
     and other Post-Petition Obligations which are not LIBOR Loans, then at a
     fluctuating per annum rate to two percent (2.00%) plus the Base Rate;

          (ii) For all Post-Petition Revolving Loans and Post-Petition Term
     Loans which are LIBOR Loans, then at a per annum rate equal to four percent
     (4.00%) plus the LIBO Rate determined for the applicable Interest Period.

     Each change in the Base Rate shall be reflected in the interest rate
     described in (i) above as of the effective date of such change. All
     interest charges shall be computed on the basis of a year of 360 days and
     actual days elapsed. Except as otherwise provided herein, (a) interest
     accrued on each LIBOR Loan shall be payable in arrears on the first day of
     each month hereafter, and (b) interest accrued on the Base Rate Loans will
     be payable in arrears on the first day of each month hereafter.

          (j) Subsection (a) of Section 3.2 is amended and restated as follows:

          (a) Subject to the provisions of Section 3.3, (i) the Borrowers shall
     have the option to convert all or any part of the outstanding Post-Petition
     Revolving Loans or Post-Petition Term Loans, in a minimum amount of
     $5,000,000 and integral multiples of $5,000,000 in excess of that amount,
     from Base Rate Loans to LIBOR Loans at any time; (ii) the Borrowers shall
     have the option to convert all or any part of the outstanding Post-Petition
     Revolving Loans or Post-Petition Term Loans from LIBOR Loans to Base Rate
     Loans on the expiration of the Interest Period applicable thereto; and
     (iii) the Borrowers shall have the option, on the expiration of the
     Interest Period applicable to any outstanding LIBOR Loan, to continue all
     or any portion of such LIBOR Loan equal to $5,000,000 and integral
     multiples of $5,000,000 in excess of that amount, as a LIBOR Loan;
     provided, however, that no outstanding Loans may be converted into or
     continued as LIBOR Loans when any Default or Event of Default has occurred
     and is continuing. Any

<PAGE>   4

         conversion or continuation made with respect to less than the entire
         outstanding balance of the Post-Petition Revolving Loans or
         Post-Petition Term Loans must be applied pro rata to the Revolving
         Loans or Term Loans, as applicable, according to the outstanding
         principal balance of each Revolving Loan or each Term Loan.

               (k)  Section 4.2 is amended and restated as follows:

               4.2 Scheduled Payments and Mandatory Prepayments of the Term
         Loans. The Borrowers shall make monthly principal payments on the
         Post-Petition Term Loans in the aggregate amount of $70,000, due and
         payable on the first day of each calendar month, commencing on January
         1, 2000, until the earlier of (a) the Stated Termination Date, or (b)
         the payment in full of the Post-Petition Term Loans. In addition,
         prepayments on the Term Loans shall be required to be made as provided
         in Sections 5.11(c), 8.5(c), 8.6(b) and 8.9(b). In addition, after the
         Additional Facility has been reduced to zero, (1) if any amounts are
         received with respect to items (a), (b), or (f) on Exhibit D, then 50%
         of such amounts shall be applied to the prepayment of the Term Loans,
         applying such amounts ratably to the installments of the Term Loans in
         the inverse order of maturity, and (2) if any Net Proceeds of the
         Electrode Settlement are received such that the amount of all Net
         Proceeds of the Electrode Settlement at such time is in excess of
         $2,500,000, then 100% of such excess Net Proceeds shall be applied to
         the prepayment of the Term Loans, applying such amounts ratably to the
         installments of the Term Loans in the inverse order of maturity.

               (l) Section 4.5 is amended by amending and restating clause
          "second" as follows:

          second, from and after the entry of the Final Order, through and
          including December 31, 1999, to make Adequate Protection Payments;

               (m) Section 4.5 is further amended by amending and restating
          clause "fourth" as follows:

          fourth, until the outstanding Pre-Petition Obligations have been paid
          in full, to pay the principal of the Pre-Petition Revolving Loans;

               (n) The last sentence of Section 8.9(b) is amended and restated
          as follows:

          Upon any such sale or other disposition, the entire amount of Net
          Proceeds shall be applied on the date of such sale or disposition to
          the repayment of the Term Loans, and if the Term Loans have been
          repaid in full, to any other Post-Petition Obligations then
          outstanding.

               (o) Section 8.24 is amended and restated as follows:

               8.24 Cash Available for Fixed Charges. The Borrowers will
          maintain Cash Available for Fixed Charges, determined as of the end of
          each period listed below for the period indicated, of not less than
          the following:

<TABLE>
<CAPTION>
                                                           Cash Available for
                  Period                                     Fixed Charges
                  ------                                     -------------
<S>                                                           <C>
          Ten month period ending 9/30/99                     $  (100,000)
          Thirteen month period ending 12/31/99               $ 1,400,000
</TABLE>

<PAGE>   5

<TABLE>
<CAPTION>
                                                           Cash Available for
                   Period                                    Fixed Charges
                   ------                                    -------------
<S>                                                           <C>
          Sixteen month period ending 3/31/00                 $ 2,100,000
          Nineteen month period ending 6/30/00                $ 2,900,000
</TABLE>

          In determining Cash Available for Fixed Charges, non-cash pension
          expense other than service costs will not be deducted from net
          earnings.

               (p) Section 8.25 is amended and restated as follows:

               8.25 Direct Contribution. The Direct Contribution of the Alton
          Steel Operations will not be less than the following amounts for the
           following periods:

<TABLE>
<CAPTION>
                   Period                                        Amount
                   ------                                        ------
<S>                                                           <C>
          Nine months ending 9/30/99                          $ (1,500,000)
          Twelve months ending 12/31/99                       $ (1,700,000)
          Fifteen months ending 3/31/00                       $  1,000,000
          Eighteen months ending 6/30/00                      $  1,500,000
</TABLE>

          In determining Direct Contribution, non-cash pension expense other
          than service costs will not be deducted from net income.

               (q) Section 13.11 is amended to delete the wire transfer
          instructions for NB, and Section 14.7 is amended to delete the address
          provision for NB.

               Section 2. Bank of America Reorganization. As a result of the
          distribution of the assets of BankAmerica Business Credit, Inc. to
          Bank of America National Trust and Savings Association (the name of
          which was subsequently changed to Bank of America, National
          Association), and the merger of NationsBank, N.A. with and into Bank
          of America, National Association with the surviving entity in such
          merger being Bank of America, National Association, all references to
          BankAmerica Business Credit, Inc., BABC, Bank of America National
          Trust and Savings Association, Bank of America, NationsBank, N.A. and
          NB contained in the Loan Agreement shall hereafter be deemed to be
          references to Bank of America, National Association.

               Section 3. Pre-Petition Revolving Loans, Pre-Petition Term Loans
          and Adequate Protection Payments. The Agent, the Lenders and the
          Borrowers hereby agree that on the date upon which this Amendment
          shall become effective, the Borrowers shall borrow (a) Post-Petition
          Revolving Loans to repay in full the Pre-Petition Revolving Loans, and
          (b) Post-Petition Term Loans to repay in full the Pre-Petition Term
          Loans, so that as of such date, the balance of the Pre-Petition
          Obligations shall be zero, and the Borrowers hereby direct the Lenders
          to advance such Post-Petition Revolving Loans and Post-Petition Term
          Loans on such effective date. In addition, the Agent, the Lenders and
          the Borrowers agree that any Adequate Protection Payments received by
          the Agent or the Lenders pursuant to the Loan Agreement shall be
          applied first, to pay any interest due on the Pre-Petition
          Obligations, including interest accrued after the Petition Date at the
          rates set forth under the Loan Agreement and second, to reduce the
          principal amount due on the Term Loans. The Borrowers shall make the
          final Adequate Protection Payment on December 31, 1999, after which
          date the Borrowers shall not be required to make any further Adequate
          Protection Payments; provided, that the right of the Borrowers to
          cease making Adequate Protection Payments is without prejudice to, and
          does not constitute a waiver of, expressly or implicitly,

<PAGE>   6

the right of the Lenders hereafter to request additional adequate protection of
their interests in the Collateral or relief from or modification of the
automatic stay under Section 362 of the Bankruptcy Code. The Borrowers shall
make monthly principal payments on the Post-Petition Term Loans in the aggregate
amount of $70,000, due and payable on the first day of each calendar month,
commencing on January 1, 2000, until the earlier of (a) the Stated Termination
Date, or (b) the payment in full of the Post-Petition Term Loans.

     Section 4. Conditions to Amendment. This Amendment shall become effective
upon (a) the receipt by the Agent by facsimile transmission of a counterpart of
this Amendment executed by each Borrower and each Lender, and execution of this
Amendment by the Agent (provided, that each Borrower and each Lender shall
promptly execute six applicable signature pages hereof and deliver such pages to
the Agent), and (b) entry by the Bankruptcy Court of a final order acceptable to
the Agent approving the terms hereof, and such order being in full force and
effect and (unless waived by the Agent) not subject to reversal, stay,
modification, amendment or appeal.

     Section 5. Representations and Warranties. Each Borrower hereby represents
and warrants that (i) this Amendment constitutes a legal, valid and binding
obligation of such Borrower, enforceable against such Borrower in accordance
with its terms, (ii) the representations and warranties contained in the Loan
Agreement are correct in all material respects as though made on and as of the
date of this Amendment, and (iii) no Event of Default has occurred and is
continuing.

     Section 6. Reference to and Effect on the Loan Agreement.

     (a) Upon the effectiveness of this Amendment, each reference in the Loan
Agreement to "this Agreement", "hereunder", "hereof", "herein", or words of like
import shall mean and be a reference to the Loan Agreement, as amended hereby,
and each reference to the Loan Agreement in any other document, instrument or
agreement executed and/or delivered in connection with the Loan Agreement shall
mean and be a reference to the Loan Agreement, as amended hereby.

     (b) Except as specifically amended above, the Loan Agreement and all other
documents, instruments and agreements executed and/or delivered in connection
therewith shall remain in full force and effect and are hereby ratified and
confirmed.

     (c) The execution, delivery and effectiveness of this Amendment shall not
operate as a waiver of any right, power or remedy of the Agent or the Lenders
under the Loan Agreement, nor constitute a waiver of any provision of the Loan
Agreement, except as specifically set forth herein.

     Section 7. Execution in Counterparts. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which taken together shall constitute but one and the same
instrument.

     Section 8. Governing Law. This Amendment shall be governed by and construed
in accordance with the internal laws (as opposed to the conflicts of laws
provisions) of the State of Illinois.

     Section 9. Section Titles. The section titles contained in this Amendment
are and shall be without substance, meaning or content of any kind whatsoever
and are not a part of the agreement between the parties hereto.

<PAGE>   7

     Section 10. Parties, Successors and Assigns. This Amendment shall be
binding upon and shall inure to the benefit of the Borrowers, the Agent, each
Lender, and their respective successors and assigns.

     Section 11. Severability. To the extent any provision of this Amendment is
not enforceable under applicable law, such provision shall be deemed null and
void and shall have no effect on the remaining portions of the Amendment.

     Section 12. Construction of Amendment. Each party hereto has cooperated in
the drafting and preparation of this Amendment and, as a result, this Amendment
shall not be construed against any party. This Amendment may be amended or
modified only by a written agreement signed by the parties hereto. This
Amendment may be executed in counterparts, each of which when so executed and
delivered shall be deemed an original but all such counterparts together shall
constitute one and the same instrument.

<PAGE>   8

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered as of December 17, 1999.

                                    LACLEDE STEEL COMPANY, as
                                    Debtor and Debtor-in-Possession

                                    By:_______________________________
                                       Vice President

                                    LACLEDE CHAIN MANUFACTURING COMPANY, as
                                    Debtor and Debtor-in-Possession

                                    By:________________________________
                                       Vice President

                                    LACLEDE MID AMERICA INC., as
                                    Debtor and Debtor-in-Possession

<PAGE>   9

                                    By:________________________________
                                       Vice President

                                    BANK OF AMERICA, NATIONAL ASSOCIATION,
                                    (as successor to BankAmerica Business
                                    Credit, Inc. and Bank of America National
                                    Trust and Savings Association), as the
                                    Agent

                                    By:________________________________
                                       Vice President

                                    BANK OF AMERICA, NATIONAL ASSOCIATION,
                                    (as successor to BankAmerica Business
                                    Credit, Inc., Bank of America National
                                    Trust and Savings Association and
                                    NationsBank, N.A.), as a Lender

                                    By:________________________________
                                       Vice President

                                    GMAC COMMERCIAL CREDIT LLC, (as successor
                                    to BNY Financial Corporation, formerly
                                    known as The Bank of New York Commercial
                                    Corporation), as a Lender

                                    By:________________________________
                                       Vice President<PAGE>   1

                                                                 EXHIBIT (10)(c)

AMENDED AND RESTATED
                              EMPLOYMENT AGREEMENT

                    THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT is made and
entered into as of the 13th day of January, 1999, by and between LACLEDE STEEL
COMPANY, debtor in possession, a Delaware corporation ("Employer"), and MICHAEL
H. LANE ("Employee").

          WHEREAS, Employee and Employer previously entered into an employment
agreement as of the 30th day of July, 1996 which was further amended on March
24, 1998 and July 29, 1998 (the "Original Employment Agreement"); and

          WHEREAS, Employee and Employer desire to amend and restate the
Original Employment Agreement in its entirety, pursuant to this Amended and
Restated Employment Agreement; and

                    WHEREAS, Employee desires to be employed by Employer and
Employer desires to employ Employee under the terms and conditions set forth in
this Amended and Restated Employment Agreement; and

                    WHEREAS, it is Employer's intention to employ Employee upon
the terms and conditions herein, which recognize and compensate Employee for the
obligations of Employee undertaken hereunder, including specifically, but not by
way of limitation, the agreement of Employee not to compete with the business of
Employer, as provided in paragraph 9(b) (see page 8), for the period provided in
paragraph 9(a) upon the termination of Employee's employment by Employer for any
reason; it being understood and agreed that Employee is employed by Employer to
protect and expand the business of Employer;

                    NOW, THEREFORE, in consideration of the foregoing and the
promises and agreements herein contained, the parties agree as follows:

                    1. Employment. Employer hereby employs Employee, and
Employee hereby accepts such employment from Employer upon the terms and
conditions hereinafter set forth. This Amended and Restated Employment Agreement
supersedes the Original Employment Agreement.

<PAGE>   2

                    2. Term of Employment. The term of Employee's employment
under this Agreement shall be for the period commencing January 13, 1999, and
continuing through December 31, 2000. Subsequent to such term this Agreement
shall continue in full force and effect until either party shall give ninety
(90) days written notice of termination, in which case this Agreement shall
terminate on the ninetieth (90th) day following the giving of such notice to the
other party. In addition, this Agreement shall terminate on the occurrence of
any of the following events:

                         (a)  Whenever Employer and Employee shall mutually
agree in writing to terminate Employee's employment by Employer;

                         (b)  Upon the death of Employee;

                         (c)  For "cause," which shall mean Employee's
dishonesty or unlawful acts committed in connection with the business of
Employer, and which results in substantial gain or profit to Employee.

                         (d)  At Employer's option and by action of Employer's
Board of Directors on thirty (30) days' written notice in the event of
Employee's Disability (defined as the failure substantially to discharge
Employee's duties as defined under this Agreement for ninety (90) consecutive
days or one hundred twenty (120) days (whether or not consecutive) in any twelve
(12) month period, as a result of an injury, disease, sickness or other physical
or mental incapacity). A determination of Employee's Disability shall be made by
a qualified medical doctor licensed to practice in the State of Missouri chosen
by Employer subject to Employee's approval, which approval shall not be
unreasonably withheld. Employee shall consent to be examined by Employer's
medical doctor and shall consent to allow Employee's medical doctor to discuss
Employee's medical condition with Employer. Notwithstanding anything to the
contrary contained herein, Employee's Disability shall not be deemed to have
commenced until full coverage with respect to such Disability shall have been
approved by Employer's disability insurance carrier and payment under Employer's
group disability policy for such Disability shall have commenced.

                    3. Title and Duties of Employee. Employee's title shall be
Executive Vice President and Chief Financial Officer. During Employee's
employment by Employer, Employee shall serve Employer to the best of Employee's
ability and shall perform such duties as are typically performed by the Chief

<PAGE>   3

Financial Officer of Employer. Employee agrees to devote Employee's time and
efforts to the business of Employer (except for usual vacations and reasonable
time for attention to personal affairs so long as Employee's performance
hereunder is not adversely affected thereby), and to be loyal and faithful at
all times, constantly endeavoring to improve Employee's ability and knowledge of
the business of Employer in an effort to increase the value of Employee's
services for the mutual benefit of Employee and Employer.

                    4.   Compensation and Benefits Other than Life Insurance.

                         (a)  Employer agrees to pay Employee for Employee's
services during the term of Employee's employment hereunder. Employee's base
salary shall be the greater of (i) an annual rate of Two Hundred Forty-Three
Thousand Five Hundred Dollars ($243,500.00) or (ii) the highest annual base
salary authorized by the Board of Directors after the date hereof. Employee's
base salary shall be due and payable in twelve (12) equal monthly installments.
Additionally, during the term of Employee's employment by Employer hereunder,
Employee's compensation shall be reviewed and may be increased and/or Employee
may be paid additional or special compensation including without limitation
stock options, stock appreciation rights and other incentive compensation, or
bonuses (based on the earnings of Employer, the performance of Employee or
otherwise) from time to time by the mutual agreement of Employee and Employer,
as determined by the Board of Directors of Employer. In addition, during the
term of this Agreement, Employee shall receive such fringe benefits as are made
available by Employer from time to time to other employees of Employer at
Employee's level of employment; provided however, that benefits paid to Employee
in all events shall include Employee's leased automobile, Employee's tax
assistance program and Employee's health and disability insurance benefits.

                         (b)  In the event of the termination of Employee's
employment either (i) by Employee for any reason including death or Disability,
or (ii) by Employer without "cause" (as defined in paragraph 2 herein), Employee
shall be paid incentive compensation for the fiscal year in which such
termination occurred in an amount equal to the product of (a) the amount of
incentive compensation to which he would have been entitled for such fiscal year
had there been no termination of employment and

<PAGE>   4

(b) a fraction, the numerator of which is the number of days of such fiscal year
in which Employee remained in the employment of Employer and the denominator of
which is 365.

                         (c)  After Employee's termination of employment
Employee shall participate in the Laclede Retired Salaried Employee Medical
Plan, as such plan may be amended by Employer or any replacement plan as may
exist from time to time.

                         (d)  After Employee's termination of  employment
medical benefits now payable for the benefit of Employee's dependent daughter,
Kelly Lane, under the Laclede Salaried Employee Medical Plan, as referenced in
the attached letter from General American Life Insurance Company, shall be
provided under the Laclede Retired Salaried Employee Medical Plan, as such plan
may be amended by Employer or any replacement plan as may exist from time to
time.

                         (e)  Notwithstanding anything contained in Employee's
Key Employee Retirement Agreement with Employer (Employee's "KERP") or this
Agreement, Employer and Employee agree that on the first business day after
Employee ceases for any reason to be a full time employee of Employer
(Employee's "KERP Payment Date") Employer shall authorize in writing the Trustee
of Employee's KERP to pay to Employee in a lump sum in kind all amounts owed to
Employee pursuant to Employee's KERP. Until Employee's KERP Payment Date,
Employee shall be considered an active employee of Employer.

                    5.   Severance Payment.

                         If (i) Employee remains in the employ of Employer
through December 31, 2000, (ii) Employer terminates Employee's employment
without cause (as defined in paragraph 2(c) herein), or (iii) Employer, without
Employee's written consent, reduces Employee's responsibility or changes
Employee's title, then in addition to all other amounts due Employee, whether
under this Agreement or otherwise, Employer shall pay to Employee as severance
in a lump sum an amount equal to Employee's annual base salary as defined in
paragraph 4(a) herein. Such amount shall be paid on Employee's last day of
employment with Employer.

                    6.   Life Insurance Benefits.

                         (a)  During the term of this Agreement, Employer shall
be obligated to keep in force life insurance on the life of Employee in the
amount of Six Hundred Thousand Dollars

<PAGE>   5

($600,000.00) which will consist of permanent insurance on the life of Employee
owned by Employee or his designee.

                         (b)  In the event of the termination of Employee's
employment either (i) by Employee for any reason, or (ii) by Employer without
"cause" (as defined in paragraph 2(c) herein), Employer agrees to keep in force
such permanent life insurance set forth in subparagraph (a) of this paragraph 6
for the duration of Employee's life. Employer may fulfill this obligation by
satisfying the premium requirement so that such permanent insurance is fully
paid under the terms of such permanent insurance policy. Employer's obligation
to pay permanent life insurance premiums under this subparagraph (b) will
survive the term of this Agreement.

                         (c)  In the event of the termination of Employee's
employment by Employer for "cause" (as defined in paragraph 2(c) herein), then
Employer's obligation to pay premiums under this paragraph 6 will cease.

                         (d)  Employer agrees to reimburse Employee for any tax
due on the annual permanent insurance premium paid by Employer.

                         (e)  The amount of insurance described in subparagraph
(a) may be increased by the Board of Directors.

                    7.   Termination. In the event of the termination of
Employee's employment by Employer, without "cause" (as defined in paragraph 2(c)
herein), then, in lieu of any further salary payment pursuant to paragraph 4(a)
herein, Employer agrees to pay Employee for the remaining term of this Agreement
at an annual rate equal to the average of Employee's "compensation" for the
three fiscal years preceding the year of such termination. For this purpose the
term "compensation" means Employee's base salary in effect for a particular year
plus the incentive compensation received by Employee with respect to services
rendered in such year whether or not such incentive compensation is actually
paid in such year. Amounts described above due Employee under this paragraph 7
shall be due and payable for the duration of the remaining term in equal monthly
installments. In addition to the foregoing, Employer shall continue, for the
duration of the remaining term, to provide Employee with such additional fringe
benefits to which Employee was entitled as of the day immediately prior to the
date of such termination. Nothing in this

<PAGE>   6

paragraph 7 shall reduce or otherwise effect Employee's right to the benefits
set forth in paragraph 4(c), (d) and (e) herein and Employee's severance payment
set forth in paragraph 5 herein.

                    8.   Extent of Services. Employee shall devote Employee's
time, attention and energy to the business of Employer, and shall not during the
term of this Agreement, or any extension hereof, without Employer's consent, be
engaged in any other business activity whether or not such business activity is
pursued for gain, profit or other pecuniary advantage; but nothing contained
herein shall be construed as preventing Employee from investing his assets in
such form or manner as will not require any service on the part of Employee in
the operation of the affairs of the corporations or other entities in which
Employee may invest his assets.

                    9.   Covenants of Employee.

                         (a)  During the term of Employee's employment with
Employer, and for a period of one (1) year after the termination of such
employment, for whatever reason, except for the termination of Employee's
employment under circumstances which constitute a violation by Employer of the
provisions of this Agreement, Employee covenants and agrees that Employee will
not (except as required in Employee's duties to Employer), in any manner
directly or indirectly:

                         (i)  Disclose or divulge to any person, entity, firm or
company whatsoever, or use for Employee's own benefit or the benefit of any
other person, entity, firm or company directly or indirectly, in competition
with the business of Employer, as the same may exist at the date of such
cessation, any proprietary business methods, customer lists, supplier lists,
business plans or other information or data of Employer, without regard to
whether all of the foregoing matters will otherwise be deemed confidential,
material or important, the parties hereto stipulating that as between them, the
same are important, material and confidential and greatly affect the effective
and successful conduct of the business and the goodwill of Employer, and that
any breach of the terms of this subparagraph (i) shall be a material breach of
this Agreement;

                         (ii) Solicit, divert, take away or interfere with any
of the customers, trade, business, patronage, employees or agents of Employer;

<PAGE>   7

                        (iii) Engage, directly or indirectly, either personally
or as an employee, partner, associate, officer, manager, agent, advisor,
consultant or otherwise, or by means of any corporate or other entity or device,
in any business competitive with the business of Employer.

                         (b)  For purposes hereof, a business will be deemed
competitive if (i) such business involves the manufacture and sale of steel, or
any other business which is competitive, during or as of the date of cessation
of Employee's employment, with any business then being conducted by Employer or
as to which Employer has at such time formulated definitive plans to enter; and
(ii) such business makes substantial sales of products competitive with those of
Employer in any of the States of Missouri, Illinois, Indiana, Iowa, Michigan and
Ohio.

                         (c)  All of the covenants on behalf of Employee
contained in this paragraph 0 shall be construed as agreements independent of
any other provision of this Agreement, and the existence of any claim or cause
of action against Employer, whether predicated on this Agreement or otherwise,
shall not constitute a defense to the enforcement by Employer of these
covenants.

                         (d)  It is the intention of the parties to restrict the
activities of Employee under this paragraph 9 only to the extent necessary for
the protection of legitimate business interests of Employer, and the parties
specifically covenant and agree that should any of the clauses or provisions set
forth herein, under any set of circumstances not now foreseen by the parties, be
held by a court of competent jurisdiction to be illegal, invalid or
unenforceable under present or future laws effective during the term of this
Agreement, then and in that event, it is the intention of the parties hereto
that, in lieu of each such clause or provision of this paragraph 9, there shall
be substituted or added, and there is hereby substituted or added, terms to such
illegal, invalid or unenforceable clause or provision as may be legal, valid and
enforceable.

                    10.  Expenses. In addition to compensation paid to Employee
under paragraph 4 hereof, during the period of Employee's employment, Employer
will pay directly or reimburse Employee for reasonable and necessary expenses
incurred by Employee in the interest of the business of Employer. All such
expenses paid by Employee will be reimbursed by Employer upon presentation by
Employee, from time to time, of an itemized account of such expenditures,
accompanied by appropriate receipts or other

<PAGE>   8

evidence of payment to the extent necessary to permit the deductibility thereof
for Federal income tax purposes.

                    11.  Documents.  Employee agrees that all documents,
instruments, drawings, plans, contracts, proposals, records, notebooks,
invoices, statements and correspondence, including all copies thereof, relating
to the business of Employer, other than purely personal documents, shall be the
property of Employer; and upon the cessation of Employee's employment with
Employer, for whatever reason, all of the same then in Employee's possession,
whether prepared by Employee or others, will be left with or immediately
delivered to Employer.

                    12. Remedies. It is agreed that any material breach or
evasion of any of the terms of this Agreement by Employee will result in
immediate and irreparable injury to Employer and will authorize recourse to
injunction and/or specific performance as well as to all other legal or
equitable remedies to which Employer may be entitled. No remedy conferred by any
of the specific provisions of this Agreement is intended to be exclusive of any
other remedy, and each and every remedy shall be cumulative and shall be in
addition to every other remedy whether given hereunder or not or whether
hereafter existing at law or in equity, by statute or otherwise. The election of
any one or more remedies by Employer or Employee shall not constitute a waiver
of the right to pursue other available remedies at any time or cumulatively from
time-to-time.

                    13.  Severability. All agreements and covenants herein
contained are severable, and in the event any of them shall be held to be
invalid or unenforceable by any court of competent jurisdiction, this Agreement
shall continue in full force and effect and, subject to paragraph 9(d) hereof,
shall be interpreted as if such invalid agreement or covenant were not contained
herein.

                    14.  Waiver or Modification. No amendment, waiver or
modification of this Agreement or of any covenant, condition or limitation
herein contained shall be valid unless in writing and duly executed by the party
to be charged therewith, and no evidence of any amendment, waiver or
modification shall be offered or received in evidence in any proceeding,
arbitration or litigation between the parties hereto arising out of or affecting
this Agreement, or the rights or obligations of the parties hereunder, unless
such amendment, waiver or modification is in writing, duly executed as
aforesaid, and the parties further agree that the provisions of this paragraph
may not be waived or modified except as

<PAGE>   9

herein set forth. Failure of Employee or Employer to exercise or otherwise act
with respect to any rights granted hereunder in the event of a breach of any of
the terms or conditions hereof by the other party, shall not be construed as a
waiver of such breach, nor prevent Employee or Employer from thereafter
enforcing strict compliance with any and all of the terms and conditions hereof.

                    15.  Fees and Expenses. If Employee is the prevailing party,
Employer shall pay all of Employee's reasonable legal fees and related expenses
(including the costs of experts, evidence and counsel) incurred by Employee as a
result of (i) Employee's termination of employment (including all such fees and
expenses, if any, incurred in contesting or disputing any such termination of
employment) or (ii) Employee's seeking to obtain or enforce any right or benefit
provided by this Agreement or by any other plan or arrangement maintained by
Employer under which Employee is or may be entitled to receive benefits.

                    16.  Notices. All notices, requests, demands or other
communications hereunder ("Notice") shall be in writing and shall be given by
registered or certified mail, return receipt requested:
if to Employer to:

                                   Laclede Steel Company
                                   Attn:  Thomas E. Brew, Jr.
                                   President
                                   15th Floor
                                   One Metropolitan Square
                                   St. Louis, Missouri 63102

and, if to Employee, to:

                                   Michael H. Lane
                                   3708 Sunset Chase
                                   St. Louis, Missouri 63127

or to such other addresses as to which the parties hereto give Notice in
accordance with this paragraph 16.

                    16.  Construction.  This Agreement shall be governed by and
construed and interpreted according to the laws of the State of Missouri,
notwithstanding the place of execution hereof, nor the performance of any acts
in connection herewith or hereunder in any other jurisdiction. For all purposes
hereof, reference to Employer shall include each and every subsidiary and
affiliated company of Employer.

<PAGE>   10

                    17.  Assignability. The services to be performed by Employee
hereunder are personal in nature and therefore Employee shall not assign his
rights or delegate his obligations under this Agreement, and any attempted or
purported assignment or delegation not herein permitted shall be null and void.

                    18.  Successors. Subject to the provisions of paragraph 9,
this Agreement shall be binding upon and shall inure to the benefit of
Employer and Employee and their respective heirs, executors, administrators,
legal representatives, successors and assigns.

                    19.  Prior Employment Agreements. Any prior Employment
Agreement between Employer and Employee is hereby terminated by mutual
agreement.

                    IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.

                                        ------------------------------
                                                 MICHAEL H. LANE

                                                  "Employee"

                                        LACLEDE STEEL COMPANY

                                        By____________________________
                                        Thomas E. Brew, Jr, President

                                                  "Employer"

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