As filed with the Securities and Exchange Commission on February 24, 1998.
                                               Registration No. 333-____________


                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM S-8
             Registration Statement Under The Securities Act of 1933


                          BIRMINGHAM STEEL CORPORATION
               (Exact Name of Issuer as Specified in Its Charter)
              DELAWARE                                  13-3213634 
     (State of Incorporation)               (IRS Employer Identification No.)
                                   
                        1000 Urban Center Drive, Suite 300
                         Birmingham, Alabama 35242-2516
                    (Address of Principal Executive Offices)


                          BIRMINGHAM STEEL CORPORATION
                         1997 MANAGEMENT INCENTIVE PLAN
                            (Full Title of the Plan)

                               Catherine W. Pecher
                          Vice President and Secretary
                          Birmingham Steel Corporation
       1000 Urban Center Drive, Suite 300, Birmingham, Alabama 35242-2516
                     (Name and Address of Agent for Service)

                                 (205) 970-1200
          (Telephone Number, including area code, of Agent for Service)


                                    Copy to:
                                  Suzanne Ashe
                               Balch & Bingham LLP
                             1901 Sixth Avenue North
                            Birmingham, Alabama 35203
                                 (205) 251-8100

                         CALCULATION OF REGISTRATION FEE

================================================================================
  Title of                      Proposed           Proposed           Amount
 Securities       Amount         Maximum            Maximum              of
   Being          Being       Offering Price       Aggregate        Registration
 Registered     Registered     Per Share (1)    Offering Price (1)      Fee
--------------------------------------------------------------------------------
Common Stock     900,000(2)       $17.25          $15,525,000         $4,579.88
$.01 par value
--------------------------------------------------------------------------------

(1)      Pursuant to Rule 457 under the Securities Act of 1933, as amended,  the
         offering price is estimated  solely for the purpose of determining  the
         registration fee and is based on the average of the high and low prices
         of the common stock of  Birmingham  Steel  Corporation  on February 23,
         1998.

2)       Pursuant to Rule 416 of the  Securities  Act of 1933,  as amended,  the
         number  of  shares  of  securities   registered  on  this  Registration
         Statement  will be increased as a result of future stock splits,  stock
         dividends or similar transactions.
================================================================================


<PAGE>



                                     PART I

                                EXPLANATORY NOTE

         Birmingham  Steel   Corporation  (the   "Registrant")  is  filing  this
Registration Statement on Form S-8 in order to register 900,000 shares of common
stock,  $.01 par value per share  (the  "Common  Stock"),  to be offered or sold
pursuant to the terms and conditions of the Birmingham  Steel  Corporation  1997
Management Incentive Plan (the "Plan").

         A  prospectus  meeting  the  requirements  of  Part I of  Form  S-8 and
containing the statement required by Item 2 of Form S-8 has been prepared.  Such
prospectus is not included in this Registration  Statement but will be delivered
to all  participants in the Plan pursuant to Rule 428(b)(1) under the Securities
Act of 1933, as amended (the "Securities Act").


                                     PART II

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3.  Incorporation of Documents by Reference.

         The following documents filed by the Registrant with the Commission are
incorporated  herein by reference:  (i) the  Registrant's  Annual Report on Form
10-K for the fiscal year ended June 30, 1997,  (ii) the  Registrant's  Quarterly
Report on Form 10-Q and Form 10-Q/A for the quarter  ended  September  30, 1997,
(iii) the  Registrant's  Quarterly  Report on Form  10-Q for the  quarter  ended
December 31, 1997,  and (iv) the  description of the  Registrant's  Common Stock
contained in the Registrant's  Registration  Statement on Form 8-A as filed with
the Commission on January 22, 1988.

         All documents  filed pursuant to Section 13(a),  13(c),  14 or 15(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), subsequent
to the date of this  Registration  Statement and prior to the termination of the
offering of the securities  offered hereby shall be deemed to be incorporated by
reference in this Registration  Statement and to be a part hereof. Any statement
contained in a document  incorporated  or deemed to be incorporated by reference
hereto  shall be  deemed to be  modified  or  superseded  for  purposes  of this
Registration Statement to the extent that a statement contained herein or in any
other  subsequently  filed document which also is deemed to be  incorporated  by
reference  herein modifies or supersedes  such statement.  Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Registration Statement.

Item 4.  Description of Securities.

         Not applicable.

Item 5.  Interest of Named Experts and Counsel.

         Not applicable.

Item 6.  Indemnification of Directors and Officers.

         The Registrant is a Delaware  corporation.  Section 145 of the Delaware
General Corporation Law empowers a Delaware  corporation to indemnify any person
who was or is a party or is  threatened  to be made a party  to any  threatened,
pending or  completed  action,  suit or  proceeding,  whether  civil,  criminal,
administrative

                                        1

<PAGE>



or investigative  (other than an action by or in the right of such  corporation)
by reason of the fact that such person is or was a director,  officer,  employee
or  agent of such  corporation,  or is or was  serving  at the  request  of such
corporation as a director,  officer, employee or agent of another corporation or
enterprise.  A corporation may indemnify such person against expenses (including
attorneys' fees),  judgments,  fines and amounts paid in settlement actually and
reasonably  incurred  by such person in  connection  with such  action,  suit or
proceeding if he acted in good faith and in a manner he  reasonably  believed to
be in or not opposed to the best interests of the corporation, and, with respect
to any criminal  action or  proceeding,  had no reasonable  cause to believe his
conduct was unlawful.  A corporation may, in advance of the final disposition of
any civil, criminal, administrative or investigative action, suit or proceeding,
pay the expenses (including attorneys' fees) incurred by any officer or director
in defending  such action,  provided that the director or officer  undertakes to
repay such amount if it shall  ultimately be determined  that he is not entitled
to be indemnified by the corporation.

         A Delaware  corporation  may  indemnify  officers  and  directors in an
action by or in the right of the  corporation to procure a judgment in its favor
under the same conditions,  except that no  indemnification is permitted without
judicial  approval  if the  officer or  director is adjudged to be liable to the
corporation.  Where an  officer  or  director  is  successful  on the  merits or
otherwise in the defense of any action referred to above,  the corporation  must
indemnify him against the expenses (including attorneys' fees) which he actually
and reasonably incurred in connection therewith. The indemnification provided is
not deemed to be  exclusive  of any other rights to which an officer or director
may be entitled under any corporation's bylaws, agreement, vote or otherwise.

         The Registrant's  By-Laws provide for  indemnification of directors and
officers of the Registrant to the fullest extent permitted by Delaware law.

         The  Registrant  has  purchased   directors'  and  officers'  liability
insurance covering certain liabilities incurred by its officers and directors in
connection with the performance of their duties.

         While the  Registrant's  By-Laws  provide  officers and directors  with
protection  from awards for monetary  damage for breaches of their duty of care,
they do not eliminate such duty. Accordingly, the By-Laws will have no effect on
the availability of equitable remedies such as an injunction or rescission based
on an officer's or a director's breach of his or her duty of care.

Item 7.  Exemption from Registration Claimed.

         Not applicable.

Item 8.  Exhibits.

         The following  exhibits are filed herewith or incorporated by reference
herein as part of this Registration Statement:

Sequential
Exhibit                         Description

                                                  

                                                       
4.1  Restated  Certificate of  Incorporation  of the Registrant (incorporated by
     reference  from  Registrant's  Registration  Statement  on Form 8-A,  filed
     November 16, 1986, Exhibit 2.2)
                                                       
4.2  By-Laws of the  Registrant  (incorporated  by reference  from  Registrant's
     Annual Report on Form 10-K for the fiscal year ended June 30, 1986, Exhibit
     3.2)
                                                       
4.3  Secretary's  certification  and  Amendment to By-Laws of  Registrant  dated
     August 17, 1990 (incorporated by reference from Registrant's  Annual Report
     on Form 10-K for the fiscal year ended June 30, 1990, Exhibit 3.2.1)
                                                        
4.4  Amendment to By-Laws of the Registrant dated June 27, 1991 (incorporated by
     reference from Registrant's  Annual Report on Form 10-K for the fiscal year
     ended June 30, 1991, Exhibit 3.2.3)
                                                        
4.5  Rights Agreement,  dated as of January 16, 1996, between the Registrant and
     First Union National Bank of North Carolina,  as Rights Agent (incorporated
     by reference from Registrant's Registration Statement on Form 8-A, as filed
     on January 23, 1996, Exhibit 4)
                                                       
4.6  Birmingham Steel Corporation 1997 Management Incentive Plan

                                                        
5.1  Opinion of Balch & Bingham LLP regarding legality of Shares

                                                       
23.1 Consent of Ernst & Young LLP

                                                       
23.2 Consent of Balch & Bingham LLP (included in Exhibit 5.1)

                                                        
24   Power of Attorney of the Officers and Directors of the Registrant

Item 9.  Undertakings.

         a.       The undersigned Registrant hereby undertakes:

                  (1) To file,  during any  period in which  offers or sales are
being made, a post-effective amendment to this Registration Statement to include
any material information with respect to the plan of distribution not previously
disclosed  in  the  Registration  Statement  or  any  material  change  to  such
information in the Registration Statement.

                  (2) That, for the purpose of determining  any liability  under
the Securities Act, each such  post-effective  amendment shall be deemed to be a
new registration  statement relating to the securities offered therein,  and the
offering of such  securities at that time shall be deemed to be the initial bona
fide offering thereof.

                  (3) To remove from  registration by means of a  post-effective
amendment  any of the  securities  being  registered  which remain unsold at the
termination of the offering.

                  (4) That, for purposes of determining  any liability under the
Securities  Act,  each  filing of the  Registrant's  annual  report  pursuant to
Section 13(a) or 15(d) of the Exchange Act (and, where  applicable,  each filing
of an employee  benefit  plan's annual  report  pursuant to Section 15(d) of the
Exchange Act) that is  incorporated by reference in the  Registration  Statement
shall be deemed to be a new  registration  statement  relating to the securities
offered  therein,  and the  offering  of such  securities  at that time shall be
deemed to be the initial bona fide offering thereof.

                  (5) To deliver or cause to be delivered  with the  prospectus,
to each person to whom the prospectus is sent or given, the latest annual report
to security  holders that is  incorporated  by reference in the  prospectus  and
furnished  pursuant to and meeting the  requirements of Rule 14a-3 or Rule 14c-3
under the Exchange Act; and, where interim financial  information required to be
presented by Article 3 of Regulation S-X is not set forth in the prospectus,  to
deliver,  or cause to be delivered to each person to whom the prospectus is sent
or given,

                                        2

<PAGE>



the latest  quarterly  report that is specifically  incorporated by reference in
the prospectus to provide such interim financial information.

                  (6) Insofar as indemnification  for liabilities  arising under
the  Securities  Act may be permitted  to  directors,  officers and  controlling
persons of the Registrant  pursuant to the foregoing  provisions,  or otherwise,
the  Registrant  has been  advised  that in the  opinion of the  Securities  and
Exchange  Commission such  indemnification is against public policy as expressed
in the  Securities  Act and is,  therefore,  unenforceable.  In the event that a
claim for  indemnification  against such liabilities  (other than the payment by
the  Registrant  of  expenses  incurred  or  paid  by  a  director,  officer  or
controlling  person of the Registrant in the  successful  defense of any action,
suit or proceeding) is asserted by such director,  officer or controlling person
in connection with the securities being registered,  the Registrant will, unless
in the  opinion  of its  counsel  the matter  has been  settled  by  controlling
precedent,  submit to a court of appropriate  jurisdiction  the question whether
such  indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.


                                        3

<PAGE>



                                   SIGNATURES

         The Registrant.  Pursuant to the  requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to believe that it
meets all of the  requirements  for filing on Form S-8 and has duly  caused this
Registration Statement to be signed on its behalf by the undersigned,  thereunto
duly  authorized,  in the City of Birmingham,  State of Alabama,  on January 13,
1998.


                          BIRMINGHAM STEEL CORPORATION



                                              By: /s/ J. Daniel Garrett
                                              ------------------------------   
                                              J. Daniel Garrett
                                              Its: Vice President and Controller





         Pursuant  to the  requirements  of the  Securities  Act of  1933,  this
Registration  Statement  has  been  signed  by  the  following  persons  in  the
capacities and on the date indicated.


         Signature                     Title                          Date

           *
----------------------      Chairman-Executive Committee,       January 13, 1998
E. Mandell de Windt         Director


           *
----------------------      Chairman of the Board, Chief        January 13, 1998
Robert A. Garvey            Executive Officer, Director
                            (Principal Executive Officer)

           *
----------------------      Director                            January 13, 1998
Harry Holiday, Jr.

           *
----------------------      Director                            January 13, 1998
C. Stephen Clegg

           *
----------------------      Director                            January 13, 1998
George A. Stinson
     

                                      5

           *
----------------------      Director                            January 13, 1998
E. Bradley Jones

           *
----------------------      Director                            January 13, 1998
Reginald H. Jones

           *
----------------------      Director                            January 13, 1998
T. Evans Wycoff

           *
----------------------      Director                            January 13, 1998
William J. Cabaniss, Jr.

           *
----------------------      Director                            January 13, 1998
Robert D. Kennedy

/s/ J. Daniel Garrett
----------------------      Vice President and Controller       January 13, 1998
J. Daniel Garrett           (Principal Financial and 
                             Accounting Officer)

*By /s/ Catherine W. Pecher
   ------------------------
    Catherine W. Pecher
    Attorney-in-Fact







                                        6

<PAGE>



                                INDEX TO EXHIBITS



Exhibit              Description

                                                   

                                                        
4.1  Restated  Certificate of Incorporation  of the Registrant  (incorporated by
     reference  from  Registrant's  Registration  Statement  on Form 8-A,  filed
     November 16, 1986, Exhibit 2.2)
                                                        
4.2  By-Laws of the  Registrant  (incorporated  by reference  from  Registrant's
     Annual Report on Form 10-K for the fiscal year ended June 30, 1986, Exhibit
     3.2)
                                                        
4.3  Secretary's  certification  and  Amendment to By-Laws of  Registrant  dated
     August 17, 1990 (incorporated by reference from Registrant's  Annual Report
     on Form 10-K for the fiscal year ended June 30, 1990, Exhibit 3.2.1)
                                                        
4.4  Amendment to By-Laws of the Registrant dated June 27, 1991 (incorporated by
     reference from Registrant's  Annual Report on Form 10-K for the fiscal year
     ended June 30, 1991, Exhibit 3.2.3)
                                                        
4.5  Rights Agreement,  dated as of January 16, 1996, between the Registrant and
     First Union National Bank of North Carolina,  as Rights Agent (incorporated
     by reference from Registrant's Registration Statement on Form 8-A, as filed
     on January 23, 1996, Exhibit 4)
                                                        
4.6  Birmingham Steel Corporation 1997 Management Incentive Plan

                                                        
5.1  Opinion of Balch & Bingham LLP regarding legality of Shares

                                                       
23.1 Consent of Ernst & Young LLP

                                                       
23.2 Consent of Balch & Bingham LLP (included in Exhibit 5.1)

                                                        
24   Power of Attorney of the Officers and Directors of the Registrant


                                        7

<PAGE>

Exhibit 4.6

                          BIRMINGHAM STEEL CORPORATION
                         1997 MANAGEMENT INCENTIVE PLAN

SECTION 1. General Purpose of Plan: Definitions.

         The  name  of  this  plan  is the  Birmingham  Steel  Corporation  1997
Management  Incentive  Plan (the  "Plan").  The purpose of the Plan is to enable
Birmingham Steel Corporation (the "Company") and its Subsidiaries and Affiliates
to attract and retain employees who contribute to the Company's success by their
ability,  ingenuity and industry, and to enable such employees to participate in
the long-term  success and growth of the Company  through an equity  interest in
the Company.

         For purposes of the Plan,  the following  terms shall be defined as set
forth below:

                  a.   "Affiliate"   means  any   corporation   (other   than  a
         Subsidiary),  partnership,  joint  venture or any other entity in which
         the  Company  owns,  directly  or  indirectly,  at  least a 10  percent
         beneficial ownership interest.

                  b.       "Board" means the Board of Directors of the Company.

                  c. "Cause" means a felony  conviction of a participant  or the
         failure of a  participant  to contest  prosecution  for a felony,  or a
         participant's  willful misconduct or dishonesty which is harmful to the
         business or reputation of the Company or any Subsidiary or Affiliate.

                  d. "Code" means the Internal Revenue Code of 1986, as amended,
         or any successor thereto.

                  e.  "Committee"  means a committee of the Board  appointed for
         the purpose of  administering  the Plan,  which committee shall consist
         exclusively of Disinterested Persons.

                  f.  "Commission" means the Securities and Exchange Commission.

                  g. "Company" means Birmingham Steel Corporation, a corporation
         organized  under the laws of the State of  Delaware  (or any  successor
         corporation).

                  h.  "Disability"  means  total  and  permanent  disability  as
         determined under the Company's long term disability program.

                  i. "Disinterested Person" shall mean a member of the Company's
         Board who satisfies  the  requirements  for being (i) a  "disinterested
         person" within the meaning set forth in Rule 16b-3(b)(3) as promulgated
         by the Commission  under the Exchange Act, or any successor  definition
         adopted by the Commission, and (ii) an "outside director"


<PAGE>



         within  the  meaning  set forth in  Section  162(m) of the Code and the
         treasury regulations  promulgated  thereunder,  as amended from time to
         time.

                  j. "Early  Retirement" means retirement from active employment
         with the Company, any Subsidiary and any Affiliate on or after the date
         on which a participant  reaches the age of  fifty-five  (55) but before
         the date on which the participant reaches the age of sixty-five (65).

                  k. "Exchange  Act" means the Securities  Exchange Act of 1934,
         as amended, and any successor thereto.

                  l.  "Fair  Market  Value"  means,  as of any given  date,  the
         closing  price of the  Stock on such date (or if no  transactions  were
         reported on such date on the next preceding date on which  transactions
         were so reported) on the New York Stock  Exchange  Composite Tape or if
         the Stock is not on such date listed on the New York Stock Exchange, in
         the principal market in which such Stock is traded on such date.

                  m. "Incentive Stock Option" means any Stock Option intended to
         be and designated as an "incentive  stock option" within the meaning of
         Section 422 of the Code.

                  n. "Non-Qualified Stock Option" means any Stock Option that is
         not an Incentive Stock Option.

                  o. "Normal Retirement" means retirement from active employment
         with the Company,  any  Subsidiary,  and any  Affiliate on or after the
         date on which a participant reaches the age of sixty-five (65).

                  p.  "Performance  Award"  means an award of shares of Stock or
         cash to the executives  pursuant to Section 8 contingent upon achieving
         certain performance goals.

                  q.       "Plan" means this 1997 Management Incentive Plan.

                  r.  "Restricted  Stock" means an award of shares of Stock that
         are subject to restrictions under Section 7 hereof.

                  s.       "Retirement" means Normal or Early Retirement.

                  t.       "Stock" means the Common Stock of the Company.

                  u. "Stock  Appreciation  Right"  means a right  granted  under
         Section 6 hereof,  which  entitles the holder to receive a cash payment
         or an award of Stock in an amount equal to the  difference  between (i)
         the Fair  Market  Value of the Stock  covered by such right at the date
         the right is granted, unless otherwise determined by the Committee

                                      - 2 -

<PAGE>



         pursuant  to  Section  6 and (ii) the Fair  Market  Value of the  Stock
         covered by such right at the date the right is exercised  multiplied by
         the number of shares covered by the right.

                  v. "Stock Option" means any option to purchase shares of Stock
         granted to employees pursuant to Section 5.

                  w. "Subsidiary" means any corporation (other than the Company)
         in an unbroken chain of corporations beginning with the Company if each
         of the  corporations  (other than the last  corporation in the unbroken
         chain) owns stock  possessing 50% or more of the total combined  voting
         power of all classes of stock in one of the other  corporations  in the
         chain.

                  x. "Ten  Percent  Shareholder"  means a person who owns (after
         taking into account the attribution  rules of Code Section 424(b)) more
         than  ten  percent  (10%) of the  total  combined  voting  power of all
         classes of stock of the Company.

SECTION 2. Administration.

         The Plan shall be  administered  by the  Committee  which  shall at all
times consist of not less than three Disinterested Persons.

         The  Committee  shall have the power and authority to grant to eligible
employees,  pursuant  to the terms of the Plan:  (i) Stock  Options;  (ii) Stock
Appreciation Rights; (iii) Restricted Stock; or (iv) Performance Awards.

         In particular, the Committee shall have the authority:

                  (i) to select  the  officers  and other key  employees  of the
         Company,  its  Subsidiaries,  and its Affiliates to whom Stock Options,
         Stock Appreciation Rights, Restricted Stock, or Performance Awards or a
         combination  of the  foregoing  from  time  to  time  will  be  granted
         hereunder;

                  (ii) to determine  whether and to what extent  Incentive Stock
         Options,   NonQualified  Stock  Options,   Stock  Appreciation  Rights,
         Restricted  Stock,  or  Performance  Awards  or a  combination  of  the
         foregoing, are to be granted hereunder;

                  (iii) to determine the number of shares of Stock to be covered
         by each such award granted hereunder;

                  (iv) to determine the terms and conditions,  not  inconsistent
         with the terms of the Plan, of any award granted  hereunder  including,
         but not limited to, any  restriction on any Stock Option or other award
         and/or the shares of Stock relating thereto based on performance and/or
         such other factors as the Committee may determine, in its sole

                                      - 3 -

<PAGE>



         discretion, and any vesting features based on performance and/or such 
         other factors as the Committee may determine, in its sole discretion;

                  (v) to  determine  whether,  to what  extent  and  under  what
         circumstances  Stock and other amounts payable with respect to an award
         under  this  Plan  shall be  deferred  either  automatically  or at the
         election of a participant,  including providing for and determining the
         amount (if any) of deemed  earnings on any deferred  amount  during any
         deferral period.

         Subject to Section 10, the Committee shall have the authority to adopt,
alter and repeal such administrative  rules,  guidelines and practices governing
the Plan as it shall, from time to time, deem advisable;  to interpret the terms
and  provisions  of the Plan  and any  award  issued  under  the  Plan  (and any
agreements  relating thereto);  and to otherwise supervise the administration of
the Plan.

         Unless  otherwise  expressly  provided in the Plan,  all  designations,
determinations,  interpretations,  and other  decisions under or with respect to
the Plan or any award  hereunder  shall be  within  the sole  discretion  of the
Committee, may be made at any time, and shall be final, conclusive,  and binding
upon all persons, including the Company, any employee, any holder or beneficiary
of any award granted hereunder and any shareholder.

SECTION 3.  Stock Subject to Plan.

         The  total  number  of  shares  of Stock  reserved  and  available  for
distribution under the Plan shall be 900,000 (subject to appropriate adjustments
to reflect  changes  in the  capitalization  of the  Company).  Such  shares may
consist,  in whole or in part,  of  authorized  and unissued  shares or treasury
shares.

         The  maximum  number of shares  subject to awards  which may be granted
under  the  Plan to any  individual  in any  one  year is  100,000  (subject  to
appropriate  adjustments  to  reflect  changes  in  the  capitalization  of  the
Company).

         If any shares of Stock that have been subject to Stock Options cease to
be subject to Stock Options,  or if any shares  subject to any Restricted  Stock
award granted  hereunder  are  forfeited or such award is otherwise  terminated,
such shares shall again be available for  distribution in connection with future
awards under the Plan.

         In  the   event   of   any   merger,   reorganization,   consolidation,
recapitalization,  stock  dividend,  or  other  change  in  corporate  structure
affecting the Stock, a substitution or adjustment shall be made in the aggregate
number of shares  reserved for issuance under the Plan, in the number and option
price of shares subject to outstanding  Stock Options granted under the Plan and
in the number of shares  subject to  Restricted  Stock awards  granted under the
Plan as may be  determined  to be  appropriate  by the  Committee,  in its  sole
discretion, provided that the number of shares subject to any award shall always
be a whole number. Such adjusted option

                                      - 4 -

<PAGE>



price shall also be used to determine the amount payable by the Company upon the
exercise of any Stock Appreciation Right associated with any Stock Option.

SECTION 4.  Eligibility.

         Officers and other key employees of the Company,  its  Subsidiaries  or
its Affiliates (but excluding members of the Committee and any person who serves
only as a director) who are  responsible  for or  contribute to the  management,
growth and/or profitability of the business of the Company, its Subsidiaries, or
its  Affiliates,  are eligible to be granted Stock Options,  Stock  Appreciation
Rights,  Restricted Stock or Performance  Awards. The optionees and participants
under the Plan shall be selected from time to time by the Committee, in its sole
discretion, from among those eligible, and the Committee shall determine, in its
sole discretion, the number of shares covered by each award or grant.

SECTION 5.  Stock Options.

         Stock  Options  may be granted  either  alone or in  addition  to other
awards  granted under the Plan. Any Stock Option granted under the Plan shall be
in such form as the Committee may from time to time approve,  and the provisions
of Stock Option awards need not be the same with respect to each optionee.

         The Stock Options granted under the Plan may be of two types: (i)
Incentive Stock Options and (ii) Non-Qualified Stock Options.

         The Committee shall have the authority to grant any optionee  Incentive
Stock Options,  Non-Qualified  Stock Options, or both types of Stock Options (in
each case with or without Stock Appreciation Rights) except that Incentive Stock
Options  shall not be granted to employees of an  Affiliate.  To the extent that
any Stock  Option  does not  qualify  as an  Incentive  Stock  Option,  it shall
constitute a separate Non-Qualified Stock Option.

         Except  as  provided  in  Section  5(j)  hereof,  no term of this  Plan
relating to Incentive  Stock Options shall be  interpreted,  amended or altered,
nor shall any discretion or authority granted under the Plan be so exercised, so
as to disqualify either the Plan or any Incentive Stock Option under Section 422
of the Code. Notwithstanding the foregoing, in the event an optionee voluntarily
disqualifies  an option as an  Incentive  Stock  Option  within  the  meaning of
Section 422 of the Code,  the Committee may, but shall not be obligated to, make
such  additional  grants,   awards  or  bonuses  as  the  Committee  shall  deem
appropriate,  to reflect the tax savings to the Company  which results from such
disqualification.

         Stock Options  granted under the Plan shall be subject to the following
terms and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable:


                                      - 5 -

<PAGE>



                  (a)  Option  Price.  The  option  price  per  share  of  Stock
         purchasable  under a Stock Option shall be  determined by the Committee
         at the time of grant but shall not be less than 100% of the Fair Market
         Value  of the  Stock  on the date of the  grant  of the  Stock  Option;
         provided,  however,  if the Option is an Incentive Stock Option granted
         to a Ten Percent Shareholder,  the option price for each share of Stock
         subject  to such  Incentive  Stock  Option  shall  be no less  than one
         hundred ten percent (110%) of the Fair Market Value of a share of Stock
         on the date such Incentive Stock Option is granted.

                  (b) Option Term.  The term of each Stock Option shall be fixed
         by the  Committee,  provided that no Stock Option which is granted to a
         Ten Percent  Shareholder  shall be exercisable more than five (5) years
         after the date such Stock  Option is granted  and that no Stock  Option
         which is granted to an optionee  that is not a Ten Percent  Shareholder
         shall be exercisable more than ten (10) years after the date such Stock
         Option is granted.

                  (c) Exercisability. Subject to paragraph (j) of this Section 5
         with  respect  to  Incentive  Stock  Options,  Stock  Options  shall be
         exercisable  at such  time or  times  and  subject  to such  terms  and
         conditions,  including, without limitation,  vesting conditions tied to
         Stock price or other criteria,  as shall be determined by the Committee
         at grant. If the Committee provides, in its discretion,  that any Stock
         Option is  exercisable  only in  installments,  the Committee may waive
         such  installment  exercise  provision  at any time in whole or in part
         based on  performance  and/or such other  factors as the  Committee may
         determine in its sole discretion.

                  (d) Method of  Exercise.  Stock  Options may be  exercised  in
         whole  or in part at any time  during  the  option  period,  by  giving
         written  notice of  exercise to the  Company  specifying  the number of
         shares to be purchased,  accompanied by payment in full of the purchase
         price, in cash, by check or such other  instrument as may be acceptable
         to  the  Committee.  As  determined  by  the  Committee,  in  its  sole
         discretion,  at or after grant,  payment in full or in part may also be
         made in the form of unrestricted Stock owned by the optionee or, in the
         case of the exercise of a Non-Qualified Stock Option,  Restricted Stock
         subject to an award hereunder may be used for payment  (based,  in each
         case,  on the Fair Market  Value of the Stock on the date the option is
         exercised,  as determined by the  Committee).  If payment of the option
         exercise price of a  Non-Qualified  Stock Option is made in whole or in
         part with  shares of  Restricted  Stock the  shares  received  upon the
         exercise of such Stock Option shall be restricted  or deferred,  as the
         case may be, in  accordance  with the original  term of the  Restricted
         Stock award in question, except that the Committee may direct that such
         restrictions or deferral  provisions  shall apply only to the number of
         such  shares  equal  to  the  number  of  shares  of  Restricted  Stock
         surrendered upon the exercise of such option. No shares of unrestricted
         Stock shall be issued  until full payment  therefor  has been made.  An
         optionee  shall  have the  rights  to  dividends  or other  rights of a
         stockholder  with  respect to shares  subject  to the  option  when the
         optionee has given written  notice of exercise and has paid in full for
         such shares.

                                      - 6 -

<PAGE>




                  (e)  Non-transferability  of Options.  Except as otherwise set
         forth in this Section  5(e), no Stock Option shall be  transferable  by
         the  Optionee  otherwise  than by will or by the  laws of  descent  and
         distribution.  All  Stock  Options  shall be  exercisable,  during  the
         optionee's lifetime, only by the optionee. The Committee shall have the
         discretionary authority,  however, to grant Non-Qualified Stock Options
         which  would be  transferable  to  members of an  optionee's  immediate
         family (which shall include, for purposes of this section,  spouses and
         children and grandchildren,  whether natural or adopted), and to trusts
         for the benefit of such family members and  partnerships  in which such
         family members are the only partners.  For purposes of paragraphs  (f),
         (g),  (h)  and (i) of  this  Section  5, a  transferred  option  may be
         exercised by the transferee  only to the extent that the optionee would
         have been entitled had the option not been transferred.

                  (f)  Termination  of  Employment  by Reason  of Death.  Unless
         otherwise  determined by the Committee,  if any  optionee's  employment
         with the Company,  any  Subsidiary,  and any  Affiliate  terminates  by
         reason of  death,  the  Stock  Option  may  thereafter  be  immediately
         exercised, to the extent then exercisable (or on such accelerated basis
         as the  Committee  shall  determine  at or after  grant),  by the legal
         representative  of the estate or by the legatee of the  optionee  under
         the will of the optionee, for a period of one (1) year from the date of
         such death or until the  expiration  of the  stated  term of such Stock
         Option, whichever period is the shorter.

                  (g) Termination of Employment by Reason of Disability.  Unless
         otherwise  determined by the Committee,  if any  optionee's  employment
         with the Company, and Subsidiary and any Affiliate terminates by reason
         of Disability, any Stock Option held by such optionee may thereafter be
         exercised,  to the extent it was exercisable at the time of termination
         due to Disability (or on such accelerated  basis as the Committee shall
         determine at or after  grant),  but may not be exercised  after one (1)
         year from the date of such  termination of employment or the expiration
         of the  stated  term of such  Stock  Option,  whichever  period  is the
         shorter;  provided,  however,  that,  if the optionee  dies within such
         one-year  period,  any  unexercised  Stock Option held by such optionee
         shall  thereafter  be  exercisable  to  the  extent  to  which  it  was
         exercisable at the time of death for a period of twelve months from the
         date of  such  death  or for the  stated  term  of such  Stock  Option,
         whichever  period  is the  shorter.  In the  event  of  termination  of
         employment  by reason of  Disability,  if an Incentive  Stock Option is
         exercised  after the expiration of the exercise  periods that apply for
         purposes of Section 422 of the Code,  such Stock Option will thereafter
         be treated as a Non-Qualified Stock Option.

                  (h) Termination of Employment by Reason of Retirement.  Unless
         otherwise  determined by the Committee,  if any  optionee's  employment
         with the Company, any Subsidiary and any Affiliate terminates by reason
         of Normal or Early  Retirement,  any Stock Option held by such optionee
         may  thereafter  be exercised to the extent it was  exercisable  at the
         time of such Retirement (or on such accelerated  basis as the Committee
         shall determine at or after grant),  but may not be exercised after one
         (1)  year  from  the  date of such  termination  of  employment  or the
         expiration of the stated term of such Stock

                                      - 7 -

<PAGE>



         Option, whichever period is the shorter; provided, however, that if the
         optionee dies within such one-year period any unexercised  Stock Option
         held by such optionee shall thereafter be exercisable, to the extent to
         which it was  exercisable at the time of death,  for a period of twelve
         months  from the date of such death or for the stated term of the Stock
         Option, whichever period is the shorter. In the event of termination of
         employment  by reason of  Retirement,  if an Incentive  Stock Option is
         exercised after the exercise periods that apply for purposes of Section
         422 of the Code,  such Stock  Option  will  thereafter  be treated as a
         Non-Qualified Stock Option.

                  (i)  Other   Termination  of  Employment.   Unless   otherwise
         determined  by the  Committee,  if an  optionee's  employment  with the
         Company,  any  Subsidiary  and any Affiliate  terminates for any reason
         other than death,  Disability  or  Retirement,  the Stock  Option shall
         thereupon terminate, except that such Stock Option may be exercised for
         the lesser of three months from the date of  termination or the balance
         of such  Stock  Option's  term if the  optionee's  employment  with the
         Company,  and Subsidiary and any Affiliate is involuntarily  terminated
         by the optionee's employer without Cause.

                  (j) Limit on Value of Incentive Stock Option First Exercisable
         Annually.  The aggregate  Fair Market Value  (determined at the time of
         grant) of the Stock for which  Incentive  Stock Options are exercisable
         for the first time by an optionee  during any  calendar  year under the
         Plan  (and/or  any  other  stock  option  plans  of  the  Company,  any
         Subsidiary and any Affiliate) shall not exceed $100,000.

SECTION 6.  Stock Appreciation Rights.

         (a) Grant and Exercise When Granted in Conjunction  With Stock Options.
Stock Appreciation  Rights may be granted in conjunction with all or part of any
Stock  Option  granted  under  the Plan and may  contain  terms  and  conditions
different from those of the related Stock Option,  except as otherwise  provided
below. In the case of a Non-Qualified  Stock Option,  such rights may be granted
either at or after the time of the grant of such Non-Qualified  Stock Option. In
the case of an Incentive  Stock  Option,  such rights may be granted only at the
time of the grant of such Incentive Stock Option.

         A Stock  Appreciation  Right or applicable  portion hereof granted with
respect to a given Stock Option  shall  terminate  and no longer be  exercisable
upon the  termination  or exercise of the related  Stock  Option,  except  that,
unless  otherwise  provided  by the  Committee  at the  time of  grant,  a Stock
Appreciation  Right  granted with respect to less than the full number of shares
covered  by a related  Stock  Option  shall only be reduced if and to the extent
that the number of shares  covered by the exercise or termination of the related
Stock Option exceeds the number of shares not covered by the Stock  Appreciation
Right.

         A  Stock  Appreciation  Right  may  be  exercised  by an  optionee,  in
accordance with paragraph (c) of this Section 6, by surrendering  the applicable
portion of the related  Stock  Option.  Upon such  exercise and  surrender,  the
optionee shall be entitled to receive an amount

                                      - 8 -

<PAGE>



determined  in the manner  prescribed  in paragraph (c) of this Section 6. Stock
Options which have been so surrendered,  in whole or in part, shall no longer be
exercisable  to the extent  the  related  Stock  Appreciation  Rights  have been
exercised.

         (b) Grant and Exercise When Granted Alone.  Stock  Appreciation  Rights
may be granted at the  discretion of the Committee in a manner not related to an
award of a Stock Option.  The Stock  Appreciation  Right,  granted under Section
6(b),  shall be exercisable in accordance with Section 6(c) over a period not to
exceed ten years. Any Stock  Appreciation Right which is outstanding on the last
day of the exercisable period shall be automatically  exercised on such date for
cash or Common Stock, as determined by the Committee,  without any action by the
holder.

         (c) Terms and Conditions. Stock Appreciation Rights shall be subject to
such terms and conditions,  not inconsistent with the provisions of the Plan, as
shall be determined from time to time by the Committee, including the following:

                  (i) Stock Appreciation Rights granted pursuant to Section 6(a)
         shall be exercisable  only at such time or times and to the extent that
         the Stock Options to which the Stock  Appreciation  Rights relate shall
         be exercisable in accordance  with the provisions of Section 5 and this
         Section 6 of the Plan.

                  (ii) Upon the exercise of a Stock  Appreciation  Right granted
         pursuant to Section 6(a),  an optionee  shall be entitled to receive an
         amount in cash or shares of Stock  equal in value to the  excess of the
         Fair Market Value of one share of Stock over the option price per share
         specified  in the  related  Stock  Option  multiplied  by the number of
         shares in respect of which the Stock Appreciation Right shall have been
         exercised, with the Committee having the right to determine the form of
         payment.  Upon  the  exercise  of a Stock  Appreciation  Right  granted
         pursuant to Section  6(b),  the holder  shall be entitled to receive an
         amount in cash or shares of Stock  equal in value to the  excess of the
         Fair Market  Value of one share of Stock over the Fair Market  Value of
         one share of Stock at the date the Stock Appreciation Right was granted
         multiplied  by the  number  of  shares  in  respect  of which the Stock
         Appreciation Right shall have been exercised, with the Committee having
         the right to determine the form of payment.

                  (iii) Stock  Appreciation  Rights shall be  transferable  only
         when  and to the  extent  that any  underlying  Stock  Option  would be
         transferable  under paragraph (e) of Section 5 of the Plan.  Otherwise,
         Stock Appreciation Rights shall not be transferable by the holder other
         than by will or the laws of  descent  and  distribution.  Except as set
         forth above, all Stock Appreciation Rights shall be exercisable, during
         the holder's lifetime, only by the holder.

                  (iv) Upon the exercise of a Stock  Appreciation  Right granted
         pursuant to Section 6(a),  the Stock  Option,  or part thereof to which
         such Stock Appreciation Right is related,  shall be deemed to have been
         exercised for the purpose of the limitation set

                                      - 9 -

<PAGE>



         forth in Section 3 of the Plan on the number of shares of Stock to be 
         issued under the Plan.

                  (v) A Stock  Appreciation  Right granted in connection with an
         Incentive  Stock Option  pursuant to Section 6(a) may be exercised only
         if and when the  market  price of the Stock  subject  to the  Incentive
         Stock Option exceeds the exercise price of such Stock Option.

                  (vi) In its sole discretion, the Committee may provide, at the
         time of grant of a Stock  Appreciation Right under this Section 6, that
         such Stock  Appreciation  Right can be exercised only in the event of a
         "Change of Control" and/or a "Potential  Change of Control" (as defined
         in Section 12 below).

                  (vii) The Committee, in its sole discretion,  may also provide
         that in the event of a "Change of Control"  and/or a "Potential  Change
         of Control" (as defined in Section 12 below) the amount to be paid upon
         the  exercise  of a Stock  Appreciation  Right  shall  be  based on the
         "Change of Control Price" (as defined in Section 12 below).

                  (viii) Any exercise by a participant  of all or a portion of a
         Stock  Appreciation  Right for cash, may only be made during the period
         beginning on the third business day following the date of the Company's
         release of its  quarterly  or annual  summary  statements  of sales and
         earnings to the public and ending on the twelfth business day following
         such date; provided, however, that the foregoing shall not apply to any
         exercise by a participant of a Stock  Appreciation Right for cash where
         the date of exercise is  automatic  or fixed in advance  under the Plan
         and is outside the control of the participant.

SECTION 7.  Restricted Stock.

         (a)  Administration.  Shares of  Restricted  Stock may be issued either
alone or in addition to other awards granted under the Plan. The Committee shall
determine the officers and key employees of the Company and its Subsidiaries and
Affiliates to whom, and the time or times at which,  grants of Restricted  Stock
will be made, the number of shares to be awarded,  the price, if any, to be paid
by the recipient of Restricted Stock (subject to Section 7(b) hereof),  the time
or times  within which such awards may be subject to  forfeiture,  and all other
conditions of the awards. However, in no event shall any restriction,  including
risk of  forfeiture,  attach to the  Restricted  Stock for a term to exceed  ten
years from the date such Stock was granted. The Committee may also condition the
grant of Restricted Stock upon the attainment of specified performance goals, or
such other criteria as the Committee may determine, in its sole discretion.  The
provisions of Restricted  Stock awards need not be the same with respect to each
recipient.

         (b) Awards and Certificates.  The prospective  recipient of an award of
shares of Restricted Stock shall not have any rights with respect to such award,
unless and until such  recipient has executed an agreement  evidencing the award
(a "Restricted Stock Award

                                     - 10 -

<PAGE>



Agreement") and has delivered a fully executed copy thereof to the Company,  and
has otherwise complied with the then applicable terms and conditions.

                  (i)  Awards of  Restricted  Stock  must be  accepted  within a
         period of 60 days (or such shorter period as the Committee may specify)
         after the award date by  executing a Restricted  Stock Award  Agreement
         and paying whatever price, if any, is required.

                  (ii) Each participant who is awarded Restricted Stock shall be
         issued a stock  certificate  in  respect of such  shares of  Restricted
         Stock.

         Such  certificate  shall be registered in the name of the  participant,
         and  shall  bear  an  appropriate   legend   referring  to  the  terms,
         conditions, and restrictions applicable to such award, substantially in
         the following form:

                           "The  transferability  of  this  certificate  and the
                  shares of stock  represented  hereby are  subject to the terms
                  and conditions (including  forfeiture) of the Birmingham Steel
                  Corporation  1997  Management  Incentive Plan and a Restricted
                  Stock Agreement  entered into between the registered owner and
                  Birmingham  Steel   Corporation.   Copies  of  such  Plan  and
                  Agreement  are on  file in the  offices  of  Birmingham  Steel
                  Corporation,  1000 Urban Center Drive, Suite 300,  Birmingham,
                  Alabama 35242-2516."

                  (iii) The Committee shall require that the stock  certificates
         evidencing  such  shares be held in  custody by the  Company  until the
         restrictions thereon shall have lapsed, and that, as a condition of any
         Restricted  Stock award,  the participant  shall have delivered a stock
         power, endorsed in blank, relating to the Stock covered by such award.

         (c) Restrictions and Conditions. The shares of Restricted Stock awarded
pursuant to this Section 7 shall be subject to the  following  restrictions  and
conditions:

                  (i)  Subject  to the  provisions  of this Plan and  Restricted
         Stock Award Agreements,  during the period established by the Committee
         in  which  the   Restricted   Stock  is  subject  to  forfeiture   (the
         "Restriction  Period"), the participant shall not be permitted to sell,
         transfer, pledge or assign shares of Restricted Stock awarded under the
         Plan.  Within these limits,  the Committee may, in its sole discretion,
         provide  for the lapse of such  restrictions  in  installments  and may
         accelerate  or waive  such  restrictions  in whole or in part  based on
         performance  and/or such other factors as the Committee may  determine,
         in its sole discretion.

                  (ii) Except as provided in paragraph (c)(i) of this Section 7,
         the  participant  shall have,  with respect to the shares of Restricted
         Stock, all of the rights of a stockholder of the Company, including the
         right to receive any dividends.


                                     - 11 -

<PAGE>



                  Dividends  paid in cash with  respect to shares of  Restricted
         Stock  shall  not  be  subject  to  any   restrictions  or  subject  to
         forfeiture. Dividends paid in stock of the Company or stock received in
         connection with a stock split with respect to Restricted Stock shall be
         subject  to  the  same   restrictions  as  on  such  Restricted  Stock.
         Certificates for shares of unrestricted Stock shall be delivered to the
         participant  promptly after,  and only after,  the period of forfeiture
         shall expire without forfeiture in respect of such shares of Restricted
         Stock.

                  (iii) Subject to the provisions of the Restricted  Stock Award
         Agreement and this Section 7, upon  termination  of employment  for any
         reason  during the  Restriction  Period,  all shares  still  subject to
         restriction shall be forfeited by the participant,  and the participant
         shall only receive the amount, if any, paid by the participant for such
         forfeited Restricted Stock.

                  (iv) In the  event  of  special  hardship  circumstances  of a
         participant  whose employment is involuntarily  terminated  (other than
         for Cause),  the Committee may, in its sole discretion,  waive in whole
         or in part  any or all  remaining  restrictions  with  respect  to such
         participant's shares of Restricted Stock.

SECTION 8.  Performance Awards.

         (a) Administration.  Shares of Common Stock or a payment in cash may be
distributed  under the Plan upon the attainment of achievement  objectives to an
employee as a Performance  Award. The Committee shall determine the officers and
key  employees of the Company and its  Subsidiaries  and  Affiliates to whom the
Performance  Award is  granted,  the terms  and  conditions  of the  achievement
objectives,  the term of the  performance  period  and the level and form of the
payment of the Performance Award.

         (b) Achievement  Objectives.  The Committee, at its sole discretion may
establish,  under this  Section  8,  achievement  objectives  either in terms of
Company-wide  objectives  or in terms of  objectives  that  are  related  to the
specific performance of the employee or the division, subsidiary,  department or
function  within the Company in which the employee is employed.  A minimum level
of acceptance, at the discretion of the Committee, may be established.

         If at the end of the performance  period the specified  objectives have
been  attained,  the  employee  is deemed to have fully  earned the  Performance
Award. If such  achievement  objectives have not been attained,  the employee is
deemed to have  partly  earned the  Performance  Award and  becomes  eligible to
receive a portion of the total  award,  as  determined  by the  Committee.  If a
required minimum level of achievement has not been met, the employee is entitled
to no portion of the  Performance  Award.  Subject to Section  8(d)  below,  the
Company may adjust the payment of awards or the achievement objectives if events
occur or  circumstances  arise which would cause a particular  payment or set of
achievement objectives to be inappropriate as a measure of performance.


                                     - 12 -

<PAGE>



         (c) Terms and Conditions.  An employee to whom a Performance  Award has
been  granted is given  achievement  objectives  to be reached  over a specified
period,  referred to herein as the "performance  period".  Generally this period
shall be not less than 1 year but in no case shall the period exceed 5 years.

         An employee granted a Performance  Award pursuant to this Section 8 who
by reason of death,  disability or retirement  terminates  employment before the
end of the  performance  period is  entitled  to receive a portion of any earned
Performance Award.

         An employee who terminates employment for any other reason forfeits all
rights under the Performance Award.

         (d) Section  162(m)  Provisions.  Unless  otherwise  determined  by the
Committee,  achievement  objectives  established  for the top five  most  highly
compensated   officers  of  the  Company  shall  be  pre-established   objective
performance  goals within the meaning of Section 162(m) of the Code and treasury
regulations promulgated thereunder.  Furthermore, unless otherwise determined by
the  Committee,  once the  Committee  has  established  one or more  achievement
objectives  with respect to a  Performance  Award granted to one of the top five
most  highly  compensated  officers of the Company  which  were,  when  granted,
intended to be pre-established objective performance goals within the meaning of
Section  162(m)  of the  Code  and  the  treasury  regulations  thereunder,  the
Committee  shall not waive or alter the  targets  after the  earlier  of (i) the
expiration of twenty-five  percent (25%) of the  performance  period or (ii) the
date on which the outcome under the objectives is substantially certain.  Unless
otherwise  determined  by the  Committee,  if any  provision  of the Plan or any
Performance  Award  granted  to an  individual  who is one of the top five  most
highly  compensated  officers  of the Company  hereunder  would  disqualify  the
Performance Award with respect to such individual, or would otherwise not comply
with Section 162(m) of the Code,  such  provision or Performance  Award shall be
construed or deemed amended to conform to Section 162(m) of the Code.

SECTION 9.  Loan Provisions.

         With the consent of the  Committee,  the  Company may make,  or arrange
for, a loan or loans to an employee  with  respect to the  exercise of any Stock
Option granted under the Plan and/or with respect to the payment of the purchase
price, if any, of any Restricted  Stock awarded  hereunder.  The Committee shall
have full authority to decide  whether to make a loan or loans  hereunder and to
determine the amount,  term and provisions of any such loan or loans,  including
the  interest  rate to be charged in respect of any such loan or loans,  whether
the loan or loans are to be with or without recourse  against the borrower,  the
terms on which the loan is to be repaid and the conditions,  if any, under which
the loan or loans may be forgiven.

SECTION 10. Amendments and Termination.

         The Board may amend,  alter,  or discontinue  the Plan as it shall deem
advisable  or to  conform  to any  change in any  applicable  law or  regulation
applicable thereto (including, without

                                     - 13 -

<PAGE>



limitation,  applicable  federal  securities laws and regulations and applicable
federal income tax laws and regulations);  provided, however, that no amendment,
alteration,  or discontinuation shall be made which would impair the right of an
optionee  or  participant  under  a  Stock  Option,  Stock  Appreciation  Right,
Restricted  Stock,  or  Performance  Award  theretofore  granted,   without  the
optionee's  or  participant's  consent,  or which  without  the  approval of the
stockholders would:

                  (a) except as expressly provided in this Plan, increase the
         total number of shares reserved for the purpose of the Plan;

                  (b) decrease the option price of any Stock Option to less than
         100% of the  Fair  Market  Value  on the  date of the  granting  of the
         option;

                  (c) change the participants or class of participants eligible
         to participate in the Plan; or

                  (d) extend the maximum option period under paragraph (b) of 
         Section 5 of the Plan.

         The  Committee  may amend the terms of any award or option  theretofore
granted, prospectively or retroactively,  but no such amendment shall impair the
rights  of any  holder  without  his or her  consent.  The  Committee  may  also
substitute  new Stock Options for  previously  granted  Stock Options  including
options  granted under other plans  applicable to the participant and previously
granted Stock Options having higher option prices. Notwithstanding any provision
of this Plan or this Section 10,  neither the Board nor the  Committee may amend
the Plan or the  terms of any  Stock  Option,  award  or grant to  decrease  the
exercise price of any Stock Option to less than 100% of the Fair Market Value of
the underlying shares on the date of the granting of the option.

SECTION 11.  Unfunded Status of Plan.

         The Plan is intended to constitute an "unfunded" plan for incentive and
deferred  compensation.  With  respect  to  any  payments  not  yet  made  to  a
participant or optionee by the Company,  nothing set forth herein shall give any
such participant or optionee any rights that are greater than those of a general
creditor of the Company. In its sole discretion, the Committee may authorize the
creation of trusts or other  arrangements to meet the obligations  created under
the Plan to  deliver  Stock or  payment  in lieu of or with  respect  to  awards
hereunder;  provided,  however,  that  the  existence  of such  trusts  or other
arrangements shall be consistent with the unfunded status of the Plan.

SECTION 12.  Change of Control.

         The following  acceleration and valuation provisions shall apply in the
event of a "Change of Control" or  "Potential  Change of Control," as defined in
this Section 12:


                                     - 14 -

<PAGE>



         (a) In the event of a "Change of Control" as defined in  paragraph  (b)
of this Section 12, unless otherwise determined by the Committee or the Board in
writing  at or after  grant,  but  prior to the  occurrence  of such  Change  of
Control, or, if and to the extent so determined by the Committee or the Board in
writing at or after grant (subject to any right of approval  expressly  reserved
by the Committee or the Board at the time of such determination) in the event of
a "Potential Change of Control," as defined in paragraph (c) of this Section 12:

                           (i) any  Stock  Appreciation  Rights  and  any  Stock
                  Options awarded under the Plan, if not previously  exercisable
                  and vested shall become fully exercisable and vested;

                           (ii)  the  restrictions   and  deferral   limitations
                  applicable to any Restricted  Stock award under the Plan shall
                  lapse and such shares and awards shall be deemed fully vested;
                  and

                           (iii) the  value of all  outstanding  Stock  Options,
                  Stock  Appreciation  Rights,  Restricted  Stock or Performance
                  Awards shall, to the extent  determined by the Committee at or
                  after  grant,  be cashed  out on the basis of the  "Change  of
                  Control  Price" (as defined in  paragraph  (d) of this Section
                  12) as of the date the Change of Control  occurs or  Potential
                  Change of  Control is  determined  to have  occurred,  or such
                  other date as the Committee may determine  prior to the Change
                  of  Control  or  Potential  Change  of  Control.  In the  sole
                  discretion of the Committee,  such settlements may be in cash,
                  in stock,  or other  consideration  as shall be  necessary  to
                  effect the desired  accounting  treatment for the  transaction
                  resulting from the "Change of Control."

         (b) For  purpose  of  paragraph  (a) of this  Section  12, a "Change of
Control" means the happening of any of the following:

                           (i)  when  any  "person",  as  such  term  is used in
                  Section  13(d) and 14(d) of the  Exchange  Act (other than the
                  Company or a Subsidiary or any Company  employee  benefit plan
                  (including its trustee)), is or becomes the "beneficial owner"
                  (as defined in Rule 13d-3 under the Exchange Act), directly or
                  indirectly  of  securities  of  the  Company  representing  20
                  percent or more of the combined  voting power of the Company's
                  then outstanding securities;

                           (ii) when, during any period of two consecutive years
                  during the existence of the Plan, the individuals  who, at the
                  beginning of such period,  constitute the Board cease, for any
                  reason  other than death,  to  constitute  at least a majority
                  thereof,  unless each  director  who was not a director at the
                  beginning   of  such   period  was   elected  by,  or  on  the
                  recommendation of, at least two-thirds of the directors at the
                  beginning of such period; or


                                     - 15 -

<PAGE>



                           (iii)  the  occurrence  of  a  transaction  requiring
                  stockholder  approval for the acquisition of the Company by an
                  entity other than the Company or a Subsidiary through purchase
                  of assets, or by merger, or otherwise.

         (c) For  purposes of  paragraph  (a) of this  Section 12, a  "Potential
Change of Control" means the happening of any of the following:

                           (i) the  entering  into an  agreement by the Company,
                  the  consummation of which would result in a Change of Control
                  of the Company as defined in paragraph (b) of this Section 12;
                  or

                           (ii)  the   acquisition   of  beneficial   ownership,
                  directly or indirectly,  by any entity, person or group (other
                  than the  Company  or a  Subsidiary  or any  Company  employee
                  benefit plan  (including  its  trustee)) of  securities of the
                  Company  representing 5 percent or more of the combined voting
                  power of the Company's outstanding securities and the adoption
                  by the Board of Directors of a resolution to the effect that a
                  Potential  Change of Control of the Company has  occurred  for
                  purposes of this Plan.

         (d) For  purposes of this Section 12,  "Change of Control  Price" means
the  highest  price per share paid in any  transaction  reported on the New York
Stock Exchange Composite Tape, or paid or offered in any transaction  related to
a  potential  or actual  Change of Control of the Company at any time during the
preceding  sixty (60) day period as determined by the Committee,  except that in
the case of Incentive  Stock Options and Stock  Appreciation  Rights relating to
Incentive Stock Options, such price shall be based only on transactions reported
for the date on which the Committee decides to cash out such options.

SECTION 13.  General Provisions.

         (a) All certificates for shares of Stock delivered under the Plan shall
be subject to such stock transfer orders and other restrictions as the Committee
may deem advisable under the rules,  regulations  and other  requirements of the
Commission,  any stock  exchange  upon which the Stock is 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.

         (b)  Nothing  set  forth in this Plan  shall  prevent  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.  The adoption of the
Plan shall not confer upon any employee of the Company,  any  Subsidiary  or any
Affiliate,  any right to continued  employment with the Company, a Subsidiary or
an  Affiliate,  as the case may be, nor shall it  interfere  in any way with the
right of the Company,  a Subsidiary or an Affiliate to terminate the  employment
of any of its employees at any time.

                                     - 16 -

<PAGE>




         (c) No employee  shall have any rights as a shareholder  of the Company
as a result of the grant of a Stock  Option to him or to her under  this Plan or
his or her  exercise of such Stock Option  pending the actual  issuance of Stock
subject to such Stock Option to such employee.

         (d) Each  participant  shall,  no later  than the date as of which  the
value  of an  award  first  becomes  includable  in  the  gross  income  of  the
participant  for  Federal  income  tax  purposes,  pay to the  Company,  or make
arrangements  satisfactory to the Committee  regarding  payment of, any Federal,
state, or local taxes of any kind required by law to be withheld with respect to
the award. The obligations of the Company under the Plan shall be conditional on
such  payment or  arrangements  and the  Company  (and,  where  applicable,  its
Subsidiaries  and  Affiliates),  shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to the
participant.  Subject to applicable laws and regulations regarding  transactions
in Company Stock by persons who are deemed insiders,  a participant may elect to
have the withholding  tax  obligations  or, in the case of all awards  hereunder
except  Stock  Options  which have related  Stock  Appreciation  Rights,  if the
Committee so  determines,  any  additional  tax  obligation  with respect to any
awards  hereunder  satisfied by (a) having the Company  withhold shares of Stock
otherwise  deliverable  to the  participant  with  respect  to the  award or (b)
delivering to the Company shares of unrestricted Stock.

         (e) At the time of grant or  purchase,  the  Committee  may  provide in
connection  with any grant or  purchase  made under this Plan that the shares of
Stock received as a result of such grant or purchase shall be subject to a right
of first refusal,  pursuant to which the participant  shall be required to offer
the Company any shares that the participant wishes to sell, with the price being
the then Fair Market  Value of the Stock,  subject to  provisions  of Section 13
hereof and to such other terms and  conditions  as the  Committee may specify at
the time of grant.

         (f) No  member  of the  Board  or the  Committee,  nor any  officer  or
employee of the Company acting on behalf of the Board or the Committee, shall be
personally liable for any action, determination, or interpretation taken or made
in good faith  with  respect  to the Plan,  and all  members of the Board or the
Committee  and each and any officer or  employee of the Company  acting on their
behalf shall, to the extent permitted by law, be fully indemnified and protected
by the Company in respect of any such action, determination or interpretation.

         (g) If any provision of the Plan or any agreement representing an award
granted  hereunder  is or  becomes  or is  deemed  to be  invalid,  illegal,  or
unenforceable  in any  jurisdiction  or as to any  person  or  award,  or  would
disqualify  the  Plan or any  award  granted  hereunder  under  any  law  deemed
applicable by the Committee, such provision shall be construed or deemed amended
to  conform  to the  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 or the award,  such  provision  shall be  stricken as to such
jurisdiction,  person or award and the  remainder of the Plan and any such award
shall remain in full force and effect.


                                     - 17 -

<PAGE>


         (h) Each award under the Plan shall be subject to the requirement that,
if at any time the Committee shall determine that (a) the listing,  registration
or  qualification  of the shares of Stock  subject or related  thereto  upon any
securities  exchange  or under any state or federal  law,  or (b) the consent or
approval of any  government  regulatory  authority,  or (c) an  agreement by the
recipient of an award with  respect to the  disposition  of shares of Stock,  is
necessary or desirable as a condition of, or in connection with, the granting of
such award or the issue or  purchase of shares of Stock  thereunder,  such award
may not be  consummated  in whole or in part unless such listing,  registration,
qualification,  consent,  approval  or  agreement  shall have been  effected  or
obtained free of any conditions  not acceptable to the Committee.  A participant
shall agree,  as a condition of receiving  any award under the Plan,  to execute
any  documents,  make  any  representations,  agree  to  restrictions  on  stock
transferability  and take any actions  which in the opinion of legal  counsel to
the Company is required by any applicable law, ruling or regulation.

         (i) Nothing in the Plan shall  affect the right or power of the Company
or  its   stockholders   to  make   or   authorize   any  or  all   adjustments,
recapitalizations,  reorganizations  or other changes in the  Company's  capital
structure or its business, or any merger or consolidation of the Company, or any
issue of stock or of options,  warrants or rights to purchase stock or of bonds,
debentures, preferred or prior preference stocks whose rights are superior to or
affect  the  Stock or the  rights  thereof  or  which  are  convertible  into or
exchangeable for Stock, or the dissolution or liquidation of the Company, or any
sale or  transfer  of all or any part of its  assets or  business,  or any other
corporate act or proceeding, whether of a similar character or otherwise.

         (j)  Headings are given to the  sections  and  subsections  of the Plan
solely as a convenience  to  facilitate  reference.  Such headings  shall not be
deemed in any way material or relevant to the construction or  interpretation of
the Plan or any provision thereof.

SECTION 14.  Effective Date of Plan.

         The effective  date of this Plan shall be the date it is adopted by the
Board;  provided  that the  shareholders  of the Company  shall approve the Plan
within  twelve (12) months after the date of adoption;  and,  provided  further,
that any  awards  granted  under this Plan  before the date of such  shareholder
approval shall be granted subject to such approval.

SECTION  15.  Term of Plan.

         No  Stock  Option,  Stock  Appreciation  Right,   Restricted  Stock  or
Performance  Award  shall be granted  pursuant to the Plan on or after the tenth
anniversary of the date of stockholder approval,  but awards theretofore granted
may extend beyond that date.

                                     - 18 -

                                     <PAGE>


                        [BALCH & BINGHAM LLP LETTERHEAD]

Exhibit 5.1




                                                 February 23, 1998




Birmingham Steel Corporation
1000 Urban Center Drive
Suite 300
Birmingham, Alabama  35242-2516

         Re:   Birmingham Steel Corporation - Registration Statement on Form S-8

Ladies and Gentlemen:

         In connection with the  registration  under the Securities Act of 1933,
as amended, of 900,000 shares of the common stock, $.01 par value per share (the
"Common Stock"),  of Birmingham Steel Corporation,  a Delaware  corporation (the
"Corporation"),   for  issuance  and  sale  in  the  manner   described  in  the
Corporation's  Registration  Statement on Form S-8 filed with the Securities and
Exchange  Commission,  to which this  opinion is an exhibit  (the  "Registration
Statement"),  we, as counsel to the  Corporation,  have examined such  corporate
records,  certificates,  and  other  documents  as we  considered  necessary  or
appropriate for the purposes of delivering this opinion.

         On the basis of the  foregoing,  we are of the opinion  that the Common
Stock offered pursuant to the  Registration  Statement has been duly and validly
authorized and is, or when issued in accordance  with the  respective  governing
documents will be, duly and validly issued, fully paid, and nonassessable.

         We hereby  consent to the  filing of this  opinion as an exhibit to the
Registration Statement.

                                Yours very truly,


                                /s/ Balch & Bingham LLP




<PAGE>






Exhibit 23.1

                          Consent of Ernst & Young LLP

We consent to the incorporation by reference in the Registration Statement (Form
S-8  No.  333-00000)   pertaining  to  the  Birmingham  Steel  Corporation  1997
Management  Incentive  Plan of our report dated August 6, 1997,  with respect to
the  consolidated   financial   statements  and  schedule  of  Birmingham  Steel
Corporation  included in its Annual  Report  (Form 10-K) for the year ended June
30, 1997, filed with the Securities and Exchange Commission.


                                                   /s/ Ernst & Young LLP

February 18, 1998



<PAGE>



Exhibit 24

                                POWER OF ATTORNEY


                  WHEREAS,   the  Board  of   Directors  of   Birmingham   Steel
Corporation  (the  "Company") has determined  that it is in the best interest of
the  Company  to  register  900,000  shares of the  Company's  common  stock for
issuance under the Company's 1997 Management Incentive Plan; and

                  WHEREAS, the Company proposes to file a registration statement
on Form S-8 and amendments thereto under the Securities Act of 1933 with respect
to the above-referenced plan.

                  NOW,  THEREFORE,  KNOW  ALL MEN BY  THESE  PRESENTS,  that the
undersigned  directors and officers of the Company,  individually  as a director
and/or as an  officer  of the  Company,  hereby  make,  constitute  and  appoint
Catherine W. Pecher their true and lawful  attorney-in-fact for each of them and
in each of their names, places and steads to sign and cause to be filed with the
Securities  and  Exchange   Commission  said  registration   statement  and  any
appropriate amendments thereto, to be accompanied by any necessary exhibits.

                  The Company hereby  authorizes said persons or any one of them
to execute said registration  statement and amendments  thereto on its behalf as
attorney-in-fact  for it and its  authorized  officers,  and to file the same as
aforesaid.

                  The  undersigned  directors and officers of the Company hereby
authorize said persons or any one of them to sign said registration statement on
their behalf as  attorney-in-fact  and to amend, or remedy any deficiencies with
respect to, said registration  statement by appropriate  amendment or amendments
and to file the same as aforesaid,  hereby giving and granting to said attorneys
full  power  and  authority  to do so and  perform  all and  every act and thing
whatsoever  requisite and necessary to complete the foregoing,  hereby ratifying
and  confirming all that said attorneys may or shall do, or cause to be done, by
virtue hereof.

                  DONE this the 13th day of January, 1998.



                                                    /s/ E. Mandell de Windt
                                                    ----------------------------
                                                    E. Mandell de Windt


                                                    /s/ Robert A. Garvey
                                                    ----------------------------
                                                    Robert A. Garvey


                                                    /s/ Harry Holiday, Jr.
                                                    ----------------------------
                                                    Harry Holiday, Jr.


                                                    /s/ C. Stephen Clegg
                                                    ----------------------------
                                                    C. Stephen Clegg


                                                    /s/ George A. Stinson
                                                    ----------------------------
                                                    George A. Stinson


                                                    /s/ E. Bradley Jones
                                                    ----------------------------
                                                    E. Bradley Jones


                                                    /s/ Reginald H. Jones
                                                    ----------------------------
                                                    Reginald H. Jones


                                                    /s/ T. Evans Wyckoff
                                                    ----------------------------
                                                    T. Evans Wyckoff


                                                    /s/ William J. Cabaniss, Jr.
                                                    ----------------------------
                                                    William J. Cabaniss, Jr.


                                                    /s/ Robert D. Kennedy
                                                    ----------------------------
                                                    Robert D. Kennedy


                                                    /s/ J. Daniel Garrett
                                                    ----------------------------
                                                    J. Daniel Garrett
[{"type": "S-8", "sequence": "1", "description": "REGISTRATION STATEMENT", "secsgml_size_bytes": 85990}]
{"company-data": {"conformed-name": "BIRMINGHAM STEEL CORP", "cik": "0000779334", "assigned-sic": "3312", "irs-number": "133213634", "state-of-incorporation": "DE", "fiscal-year-end": "0630"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-46771", "film-number": "98547889"}, "business-address": {"street1": "1000 URBAN CENTER PARKWAY", "street2": "SUITE 300", "city": "BIRMINGHAM", "state": "AL", "zip": "35242", "phone": "2059701255"}, "mail-address": {"street1": "P.O. BOX 1208", "city": "BIRMINGHAM", "state": "AL", "zip": "35201-1208"}}
As filed with the Securities and Exchange Commission on February 24, 1998.
                                               Registration No. 333-____________

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM S-8
             Registration Statement Under The Securities Act of 1933

                          BIRMINGHAM STEEL CORPORATION
               (Exact Name of Issuer as Specified in Its Charter)
              DELAWARE                                  13-3213634 
     (State of Incorporation)               (IRS Employer Identification No.)
                                   
                        1000 Urban Center Drive, Suite 300
                         Birmingham, Alabama 35242-2516
                    (Address of Principal Executive Offices)

                          BIRMINGHAM STEEL CORPORATION
                         1997 MANAGEMENT INCENTIVE PLAN
                            (Full Title of the Plan)

                               Catherine W. Pecher
                          Vice President and Secretary
                          Birmingham Steel Corporation
       1000 Urban Center Drive, Suite 300, Birmingham, Alabama 35242-2516
                     (Name and Address of Agent for Service)

                                 (205) 970-1200
          (Telephone Number, including area code, of Agent for Service)

                                    Copy to:
                                  Suzanne Ashe
                               Balch & Bingham LLP
                             1901 Sixth Avenue North
                            Birmingham, Alabama 35203
                                 (205) 251-8100

                         CALCULATION OF REGISTRATION FEE

================================================================================
  Title of                      Proposed           Proposed           Amount
 Securities       Amount         Maximum            Maximum              of
   Being          Being       Offering Price       Aggregate        Registration
 Registered     Registered     Per Share (1)    Offering Price (1)      Fee
--------------------------------------------------------------------------------
Common Stock     900,000(2)       $17.25          $15,525,000         $4,579.88
$.01 par value
--------------------------------------------------------------------------------

(1)      Pursuant to Rule 457 under the Securities Act of 1933, as amended,  the
         offering price is estimated  solely for the purpose of determining  the
         registration fee and is based on the average of the high and low prices
         of the common stock of  Birmingham  Steel  Corporation  on February 23,
         1998.

2)       Pursuant to Rule 416 of the  Securities  Act of 1933,  as amended,  the
         number  of  shares  of  securities   registered  on  this  Registration
         Statement  will be increased as a result of future stock splits,  stock
         dividends or similar transactions.
================================================================================
PART I

                                EXPLANATORY NOTE

         Birmingham  Steel   Corporation  (the   "Registrant")  is  filing  this
Registration Statement on Form S-8 in order to register 900,000 shares of common
stock,  $.01 par value per share  (the  "Common  Stock"),  to be offered or sold
pursuant to the terms and conditions of the Birmingham  Steel  Corporation  1997
Management Incentive Plan (the "Plan").

         A  prospectus  meeting  the  requirements  of  Part I of  Form  S-8 and
containing the statement required by Item 2 of Form S-8 has been prepared.  Such
prospectus is not included in this Registration  Statement but will be delivered
to all  participants in the Plan pursuant to Rule 428(b)(1) under the Securities
Act of 1933, as amended (the "Securities Act").

                                     PART II

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3.  Incorporation of Documents by Reference.

         The following documents filed by the Registrant with the Commission are
incorporated  herein by reference:  (i) the  Registrant's  Annual Report on Form
10-K for the fiscal year ended June 30, 1997,  (ii) the  Registrant's  Quarterly
Report on Form 10-Q and Form 10-Q/A for the quarter  ended  September  30, 1997,
(iii) the  Registrant's  Quarterly  Report on Form  10-Q for the  quarter  ended
December 31, 1997,  and (iv) the  description of the  Registrant's  Common Stock
contained in the Registrant's  Registration  Statement on Form 8-A as filed with
the Commission on January 22, 1988.

         All documents  filed pursuant to Section 13(a),  13(c),  14 or 15(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), subsequent
to the date of this  Registration  Statement and prior to the termination of the
offering of the securities  offered hereby shall be deemed to be incorporated by
reference in this Registration  Statement and to be a part hereof. Any statement
contained in a document  incorporated  or deemed to be incorporated by reference
hereto  shall be  deemed to be  modified  or  superseded  for  purposes  of this
Registration Statement to the extent that a statement contained herein or in any
other  subsequently  filed document which also is deemed to be  incorporated  by
reference  herein modifies or supersedes  such statement.  Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Registration Statement.

Item 4.  Description of Securities.

         Not applicable.

Item 5.  Interest of Named Experts and Counsel.

         Not applicable.

Item 6.  Indemnification of Directors and Officers.

         The Registrant is a Delaware  corporation.  Section 145 of the Delaware
General Corporation Law empowers a Delaware  corporation to indemnify any person
who was or is a party or is  threatened  to be made a party  to any  threatened,
pending or  completed  action,  suit or  proceeding,  whether  civil,  criminal,
administrative

                                        1
or investigative  (other than an action by or in the right of such  corporation)
by reason of the fact that such person is or was a director,  officer,  employee
or  agent of such  corporation,  or is or was  serving  at the  request  of such
corporation as a director,  officer, employee or agent of another corporation or
enterprise.  A corporation may indemnify such person against expenses (including
attorneys' fees),  judgments,  fines and amounts paid in settlement actually and
reasonably  incurred  by such person in  connection  with such  action,  suit or
proceeding if he acted in good faith and in a manner he  reasonably  believed to
be in or not opposed to the best interests of the corporation, and, with respect
to any criminal  action or  proceeding,  had no reasonable  cause to believe his
conduct was unlawful.  A corporation may, in advance of the final disposition of
any civil, criminal, administrative or investigative action, suit or proceeding,
pay the expenses (including attorneys' fees) incurred by any officer or director
in defending  such action,  provided that the director or officer  undertakes to
repay such amount if it shall  ultimately be determined  that he is not entitled
to be indemnified by the corporation.

         A Delaware  corporation  may  indemnify  officers  and  directors in an
action by or in the right of the  corporation to procure a judgment in its favor
under the same conditions,  except that no  indemnification is permitted without
judicial  approval  if the  officer or  director is adjudged to be liable to the
corporation.  Where an  officer  or  director  is  successful  on the  merits or
otherwise in the defense of any action referred to above,  the corporation  must
indemnify him against the expenses (including attorneys' fees) which he actually
and reasonably incurred in connection therewith. The indemnification provided is
not deemed to be  exclusive  of any other rights to which an officer or director
may be entitled under any corporation's bylaws, agreement, vote or otherwise.

         The Registrant's  By-Laws provide for  indemnification of directors and
officers of the Registrant to the fullest extent permitted by Delaware law.

         The  Registrant  has  purchased   directors'  and  officers'  liability
insurance covering certain liabilities incurred by its officers and directors in
connection with the performance of their duties.

         While the  Registrant's  By-Laws  provide  officers and directors  with
protection  from awards for monetary  damage for breaches of their duty of care,
they do not eliminate such duty. Accordingly, the By-Laws will have no effect on
the availability of equitable remedies such as an injunction or rescission based
on an officer's or a director's breach of his or her duty of care.

Item 7.  Exemption from Registration Claimed.

         Not applicable.

Item 8.  Exhibits.

         The following  exhibits are filed herewith or incorporated by reference
herein as part of this Registration Statement:

Sequential
Exhibit                         Description

                                                  

                                                       
4.1  Restated  Certificate of  Incorporation  of the Registrant (incorporated by
     reference  from  Registrant's  Registration  Statement  on Form 8-A,  filed
     November 16, 1986, Exhibit 2.2)
                                                       
4.2  By-Laws of the  Registrant  (incorporated  by reference  from  Registrant's
     Annual Report on Form 10-K for the fiscal year ended June 30, 1986, Exhibit
     3.2)
                                                       
4.3  Secretary's  certification  and  Amendment to By-Laws of  Registrant  dated
     August 17, 1990 (incorporated by reference from Registrant's  Annual Report
     on Form 10-K for the fiscal year ended June 30, 1990, Exhibit 3.2.1)
                                                        
4.4  Amendment to By-Laws of the Registrant dated June 27, 1991 (incorporated by
     reference from Registrant's  Annual Report on Form 10-K for the fiscal year
     ended June 30, 1991, Exhibit 3.2.3)
                                                        
4.5  Rights Agreement,  dated as of January 16, 1996, between the Registrant and
     First Union National Bank of North Carolina,  as Rights Agent (incorporated
     by reference from Registrant's Registration Statement on Form 8-A, as filed
     on January 23, 1996, Exhibit 4)
                                                       
4.6  Birmingham Steel Corporation 1997 Management Incentive Plan

                                                        
5.1  Opinion of Balch & Bingham LLP regarding legality of Shares

                                                       
23.1 Consent of Ernst & Young LLP

                                                       
23.2 Consent of Balch & Bingham LLP (included in Exhibit 5.1)

                                                        
24   Power of Attorney of the Officers and Directors of the Registrant

Item 9.  Undertakings.

         a.       The undersigned Registrant hereby undertakes:

                  (1) To file,  during any  period in which  offers or sales are
being made, a post-effective amendment to this Registration Statement to include
any material information with respect to the plan of distribution not previously
disclosed  in  the  Registration  Statement  or  any  material  change  to  such
information in the Registration Statement.

                  (2) That, for the purpose of determining  any liability  under
the Securities Act, each such  post-effective  amendment shall be deemed to be a
new registration  statement relating to the securities offered therein,  and the
offering of such  securities at that time shall be deemed to be the initial bona
fide offering thereof.

                  (3) To remove from  registration by means of a  post-effective
amendment  any of the  securities  being  registered  which remain unsold at the
termination of the offering.

                  (4) That, for purposes of determining  any liability under the
Securities  Act,  each  filing of the  Registrant's  annual  report  pursuant to
Section 13(a) or 15(d) of the Exchange Act (and, where  applicable,  each filing
of an employee  benefit  plan's annual  report  pursuant to Section 15(d) of the
Exchange Act) that is  incorporated by reference in the  Registration  Statement
shall be deemed to be a new  registration  statement  relating to the securities
offered  therein,  and the  offering  of such  securities  at that time shall be
deemed to be the initial bona fide offering thereof.

                  (5) To deliver or cause to be delivered  with the  prospectus,
to each person to whom the prospectus is sent or given, the latest annual report
to security  holders that is  incorporated  by reference in the  prospectus  and
furnished  pursuant to and meeting the  requirements of Rule 14a-3 or Rule 14c-3
under the Exchange Act; and, where interim financial  information required to be
presented by Article 3 of Regulation S-X is not set forth in the prospectus,  to
deliver,  or cause to be delivered to each person to whom the prospectus is sent
or given,

                                        2
the latest  quarterly  report that is specifically  incorporated by reference in
the prospectus to provide such interim financial information.

                  (6) Insofar as indemnification  for liabilities  arising under
the  Securities  Act may be permitted  to  directors,  officers and  controlling
persons of the Registrant  pursuant to the foregoing  provisions,  or otherwise,
the  Registrant  has been  advised  that in the  opinion of the  Securities  and
Exchange  Commission such  indemnification is against public policy as expressed
in the  Securities  Act and is,  therefore,  unenforceable.  In the event that a
claim for  indemnification  against such liabilities  (other than the payment by
the  Registrant  of  expenses  incurred  or  paid  by  a  director,  officer  or
controlling  person of the Registrant in the  successful  defense of any action,
suit or proceeding) is asserted by such director,  officer or controlling person
in connection with the securities being registered,  the Registrant will, unless
in the  opinion  of its  counsel  the matter  has been  settled  by  controlling
precedent,  submit to a court of appropriate  jurisdiction  the question whether
such  indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

                                        3
SIGNATURES

         The Registrant.  Pursuant to the  requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to believe that it
meets all of the  requirements  for filing on Form S-8 and has duly  caused this
Registration Statement to be signed on its behalf by the undersigned,  thereunto
duly  authorized,  in the City of Birmingham,  State of Alabama,  on January 13,
1998.

                          BIRMINGHAM STEEL CORPORATION

                                              By: /s/ J. Daniel Garrett
                                              ------------------------------   
                                              J. Daniel Garrett
                                              Its: Vice President and Controller

         Pursuant  to the  requirements  of the  Securities  Act of  1933,  this
Registration  Statement  has  been  signed  by  the  following  persons  in  the
capacities and on the date indicated.

         Signature                     Title                          Date

           *
----------------------      Chairman-Executive Committee,       January 13, 1998
E. Mandell de Windt         Director

           *
----------------------      Chairman of the Board, Chief        January 13, 1998
Robert A. Garvey            Executive Officer, Director
                            (Principal Executive Officer)

           *
----------------------      Director                            January 13, 1998
Harry Holiday, Jr.

           *
----------------------      Director                            January 13, 1998
C. Stephen Clegg

           *
----------------------      Director                            January 13, 1998
George A. Stinson
     

                                      5

           *
----------------------      Director                            January 13, 1998
E. Bradley Jones

           *
----------------------      Director                            January 13, 1998
Reginald H. Jones

           *
----------------------      Director                            January 13, 1998
T. Evans Wycoff

           *
----------------------      Director                            January 13, 1998
William J. Cabaniss, Jr.

           *
----------------------      Director                            January 13, 1998
Robert D. Kennedy

/s/ J. Daniel Garrett
----------------------      Vice President and Controller       January 13, 1998
J. Daniel Garrett           (Principal Financial and 
                             Accounting Officer)

*By /s/ Catherine W. Pecher
   ------------------------
    Catherine W. Pecher
    Attorney-in-Fact

                                        6
INDEX TO EXHIBITS

Exhibit              Description

                                                   

                                                        
4.1  Restated  Certificate of Incorporation  of the Registrant  (incorporated by
     reference  from  Registrant's  Registration  Statement  on Form 8-A,  filed
     November 16, 1986, Exhibit 2.2)
                                                        
4.2  By-Laws of the  Registrant  (incorporated  by reference  from  Registrant's
     Annual Report on Form 10-K for the fiscal year ended June 30, 1986, Exhibit
     3.2)
                                                        
4.3  Secretary's  certification  and  Amendment to By-Laws of  Registrant  dated
     August 17, 1990 (incorporated by reference from Registrant's  Annual Report
     on Form 10-K for the fiscal year ended June 30, 1990, Exhibit 3.2.1)
                                                        
4.4  Amendment to By-Laws of the Registrant dated June 27, 1991 (incorporated by
     reference from Registrant's  Annual Report on Form 10-K for the fiscal year
     ended June 30, 1991, Exhibit 3.2.3)
                                                        
4.5  Rights Agreement,  dated as of January 16, 1996, between the Registrant and
     First Union National Bank of North Carolina,  as Rights Agent (incorporated
     by reference from Registrant's Registration Statement on Form 8-A, as filed
     on January 23, 1996, Exhibit 4)
                                                        
4.6  Birmingham Steel Corporation 1997 Management Incentive Plan

                                                        
5.1  Opinion of Balch & Bingham LLP regarding legality of Shares

                                                       
23.1 Consent of Ernst & Young LLP

                                                       
23.2 Consent of Balch & Bingham LLP (included in Exhibit 5.1)

                                                        
24   Power of Attorney of the Officers and Directors of the Registrant

                                        7
Exhibit 4.6

                          BIRMINGHAM STEEL CORPORATION
                         1997 MANAGEMENT INCENTIVE PLAN

SECTION 1. General Purpose of Plan: Definitions.

         The  name  of  this  plan  is the  Birmingham  Steel  Corporation  1997
Management  Incentive  Plan (the  "Plan").  The purpose of the Plan is to enable
Birmingham Steel Corporation (the "Company") and its Subsidiaries and Affiliates
to attract and retain employees who contribute to the Company's success by their
ability,  ingenuity and industry, and to enable such employees to participate in
the long-term  success and growth of the Company  through an equity  interest in
the Company.

         For purposes of the Plan,  the following  terms shall be defined as set
forth below:

                  a.   "Affiliate"   means  any   corporation   (other   than  a
         Subsidiary),  partnership,  joint  venture or any other entity in which
         the  Company  owns,  directly  or  indirectly,  at  least a 10  percent
         beneficial ownership interest.

                  b.       "Board" means the Board of Directors of the Company.

                  c. "Cause" means a felony  conviction of a participant  or the
         failure of a  participant  to contest  prosecution  for a felony,  or a
         participant's  willful misconduct or dishonesty which is harmful to the
         business or reputation of the Company or any Subsidiary or Affiliate.

                  d. "Code" means the Internal Revenue Code of 1986, as amended,
         or any successor thereto.

                  e.  "Committee"  means a committee of the Board  appointed for
         the purpose of  administering  the Plan,  which committee shall consist
         exclusively of Disinterested Persons.

                  f.  "Commission" means the Securities and Exchange Commission.

                  g. "Company" means Birmingham Steel Corporation, a corporation
         organized  under the laws of the State of  Delaware  (or any  successor
         corporation).

                  h.  "Disability"  means  total  and  permanent  disability  as
         determined under the Company's long term disability program.

                  i. "Disinterested Person" shall mean a member of the Company's
         Board who satisfies  the  requirements  for being (i) a  "disinterested
         person" within the meaning set forth in Rule 16b-3(b)(3) as promulgated
         by the Commission  under the Exchange Act, or any successor  definition
         adopted by the Commission, and (ii) an "outside director"
within  the  meaning  set forth in  Section  162(m) of the Code and the
         treasury regulations  promulgated  thereunder,  as amended from time to
         time.

                  j. "Early  Retirement" means retirement from active employment
         with the Company, any Subsidiary and any Affiliate on or after the date
         on which a participant  reaches the age of  fifty-five  (55) but before
         the date on which the participant reaches the age of sixty-five (65).

                  k. "Exchange  Act" means the Securities  Exchange Act of 1934,
         as amended, and any successor thereto.

                  l.  "Fair  Market  Value"  means,  as of any given  date,  the
         closing  price of the  Stock on such date (or if no  transactions  were
         reported on such date on the next preceding date on which  transactions
         were so reported) on the New York Stock  Exchange  Composite Tape or if
         the Stock is not on such date listed on the New York Stock Exchange, in
         the principal market in which such Stock is traded on such date.

                  m. "Incentive Stock Option" means any Stock Option intended to
         be and designated as an "incentive  stock option" within the meaning of
         Section 422 of the Code.

                  n. "Non-Qualified Stock Option" means any Stock Option that is
         not an Incentive Stock Option.

                  o. "Normal Retirement" means retirement from active employment
         with the Company,  any  Subsidiary,  and any  Affiliate on or after the
         date on which a participant reaches the age of sixty-five (65).

                  p.  "Performance  Award"  means an award of shares of Stock or
         cash to the executives  pursuant to Section 8 contingent upon achieving
         certain performance goals.

                  q.       "Plan" means this 1997 Management Incentive Plan.

                  r.  "Restricted  Stock" means an award of shares of Stock that
         are subject to restrictions under Section 7 hereof.

                  s.       "Retirement" means Normal or Early Retirement.

                  t.       "Stock" means the Common Stock of the Company.

                  u. "Stock  Appreciation  Right"  means a right  granted  under
         Section 6 hereof,  which  entitles the holder to receive a cash payment
         or an award of Stock in an amount equal to the  difference  between (i)
         the Fair  Market  Value of the Stock  covered by such right at the date
         the right is granted, unless otherwise determined by the Committee

                                      - 2 -
pursuant  to  Section  6 and (ii) the Fair  Market  Value of the  Stock
         covered by such right at the date the right is exercised  multiplied by
         the number of shares covered by the right.

                  v. "Stock Option" means any option to purchase shares of Stock
         granted to employees pursuant to Section 5.

                  w. "Subsidiary" means any corporation (other than the Company)
         in an unbroken chain of corporations beginning with the Company if each
         of the  corporations  (other than the last  corporation in the unbroken
         chain) owns stock  possessing 50% or more of the total combined  voting
         power of all classes of stock in one of the other  corporations  in the
         chain.

                  x. "Ten  Percent  Shareholder"  means a person who owns (after
         taking into account the attribution  rules of Code Section 424(b)) more
         than  ten  percent  (10%) of the  total  combined  voting  power of all
         classes of stock of the Company.

SECTION 2. Administration.

         The Plan shall be  administered  by the  Committee  which  shall at all
times consist of not less than three Disinterested Persons.

         The  Committee  shall have the power and authority to grant to eligible
employees,  pursuant  to the terms of the Plan:  (i) Stock  Options;  (ii) Stock
Appreciation Rights; (iii) Restricted Stock; or (iv) Performance Awards.

         In particular, the Committee shall have the authority:

                  (i) to select  the  officers  and other key  employees  of the
         Company,  its  Subsidiaries,  and its Affiliates to whom Stock Options,
         Stock Appreciation Rights, Restricted Stock, or Performance Awards or a
         combination  of the  foregoing  from  time  to  time  will  be  granted
         hereunder;

                  (ii) to determine  whether and to what extent  Incentive Stock
         Options,   NonQualified  Stock  Options,   Stock  Appreciation  Rights,
         Restricted  Stock,  or  Performance  Awards  or a  combination  of  the
         foregoing, are to be granted hereunder;

                  (iii) to determine the number of shares of Stock to be covered
         by each such award granted hereunder;

                  (iv) to determine the terms and conditions,  not  inconsistent
         with the terms of the Plan, of any award granted  hereunder  including,
         but not limited to, any  restriction on any Stock Option or other award
         and/or the shares of Stock relating thereto based on performance and/or
         such other factors as the Committee may determine, in its sole

                                      - 3 -
discretion, and any vesting features based on performance and/or such 
         other factors as the Committee may determine, in its sole discretion;

                  (v) to  determine  whether,  to what  extent  and  under  what
         circumstances  Stock and other amounts payable with respect to an award
         under  this  Plan  shall be  deferred  either  automatically  or at the
         election of a participant,  including providing for and determining the
         amount (if any) of deemed  earnings on any deferred  amount  during any
         deferral period.

         Subject to Section 10, the Committee shall have the authority to adopt,
alter and repeal such administrative  rules,  guidelines and practices governing
the Plan as it shall, from time to time, deem advisable;  to interpret the terms
and  provisions  of the Plan  and any  award  issued  under  the  Plan  (and any
agreements  relating thereto);  and to otherwise supervise the administration of
the Plan.

         Unless  otherwise  expressly  provided in the Plan,  all  designations,
determinations,  interpretations,  and other  decisions under or with respect to
the Plan or any award  hereunder  shall be  within  the sole  discretion  of the
Committee, may be made at any time, and shall be final, conclusive,  and binding
upon all persons, including the Company, any employee, any holder or beneficiary
of any award granted hereunder and any shareholder.

SECTION 3.  Stock Subject to Plan.

         The  total  number  of  shares  of Stock  reserved  and  available  for
distribution under the Plan shall be 900,000 (subject to appropriate adjustments
to reflect  changes  in the  capitalization  of the  Company).  Such  shares may
consist,  in whole or in part,  of  authorized  and unissued  shares or treasury
shares.

         The  maximum  number of shares  subject to awards  which may be granted
under  the  Plan to any  individual  in any  one  year is  100,000  (subject  to
appropriate  adjustments  to  reflect  changes  in  the  capitalization  of  the
Company).

         If any shares of Stock that have been subject to Stock Options cease to
be subject to Stock Options,  or if any shares  subject to any Restricted  Stock
award granted  hereunder  are  forfeited or such award is otherwise  terminated,
such shares shall again be available for  distribution in connection with future
awards under the Plan.

         In  the   event   of   any   merger,   reorganization,   consolidation,
recapitalization,  stock  dividend,  or  other  change  in  corporate  structure
affecting the Stock, a substitution or adjustment shall be made in the aggregate
number of shares  reserved for issuance under the Plan, in the number and option
price of shares subject to outstanding  Stock Options granted under the Plan and
in the number of shares  subject to  Restricted  Stock awards  granted under the
Plan as may be  determined  to be  appropriate  by the  Committee,  in its  sole
discretion, provided that the number of shares subject to any award shall always
be a whole number. Such adjusted option

                                      - 4 -
price shall also be used to determine the amount payable by the Company upon the
exercise of any Stock Appreciation Right associated with any Stock Option.

SECTION 4.  Eligibility.

         Officers and other key employees of the Company,  its  Subsidiaries  or
its Affiliates (but excluding members of the Committee and any person who serves
only as a director) who are  responsible  for or  contribute to the  management,
growth and/or profitability of the business of the Company, its Subsidiaries, or
its  Affiliates,  are eligible to be granted Stock Options,  Stock  Appreciation
Rights,  Restricted Stock or Performance  Awards. The optionees and participants
under the Plan shall be selected from time to time by the Committee, in its sole
discretion, from among those eligible, and the Committee shall determine, in its
sole discretion, the number of shares covered by each award or grant.

SECTION 5.  Stock Options.

         Stock  Options  may be granted  either  alone or in  addition  to other
awards  granted under the Plan. Any Stock Option granted under the Plan shall be
in such form as the Committee may from time to time approve,  and the provisions
of Stock Option awards need not be the same with respect to each optionee.

         The Stock Options granted under the Plan may be of two types: (i)
Incentive Stock Options and (ii) Non-Qualified Stock Options.

         The Committee shall have the authority to grant any optionee  Incentive
Stock Options,  Non-Qualified  Stock Options, or both types of Stock Options (in
each case with or without Stock Appreciation Rights) except that Incentive Stock
Options  shall not be granted to employees of an  Affiliate.  To the extent that
any Stock  Option  does not  qualify  as an  Incentive  Stock  Option,  it shall
constitute a separate Non-Qualified Stock Option.

         Except  as  provided  in  Section  5(j)  hereof,  no term of this  Plan
relating to Incentive  Stock Options shall be  interpreted,  amended or altered,
nor shall any discretion or authority granted under the Plan be so exercised, so
as to disqualify either the Plan or any Incentive Stock Option under Section 422
of the Code. Notwithstanding the foregoing, in the event an optionee voluntarily
disqualifies  an option as an  Incentive  Stock  Option  within  the  meaning of
Section 422 of the Code,  the Committee may, but shall not be obligated to, make
such  additional  grants,   awards  or  bonuses  as  the  Committee  shall  deem
appropriate,  to reflect the tax savings to the Company  which results from such
disqualification.

         Stock Options  granted under the Plan shall be subject to the following
terms and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable:

                                      - 5 -
(a)  Option  Price.  The  option  price  per  share  of  Stock
         purchasable  under a Stock Option shall be  determined by the Committee
         at the time of grant but shall not be less than 100% of the Fair Market
         Value  of the  Stock  on the date of the  grant  of the  Stock  Option;
         provided,  however,  if the Option is an Incentive Stock Option granted
         to a Ten Percent Shareholder,  the option price for each share of Stock
         subject  to such  Incentive  Stock  Option  shall  be no less  than one
         hundred ten percent (110%) of the Fair Market Value of a share of Stock
         on the date such Incentive Stock Option is granted.

                  (b) Option Term.  The term of each Stock Option shall be fixed
         by the  Committee,  provided that no Stock Option which is granted to a
         Ten Percent  Shareholder  shall be exercisable more than five (5) years
         after the date such Stock  Option is granted  and that no Stock  Option
         which is granted to an optionee  that is not a Ten Percent  Shareholder
         shall be exercisable more than ten (10) years after the date such Stock
         Option is granted.

                  (c) Exercisability. Subject to paragraph (j) of this Section 5
         with  respect  to  Incentive  Stock  Options,  Stock  Options  shall be
         exercisable  at such  time or  times  and  subject  to such  terms  and
         conditions,  including, without limitation,  vesting conditions tied to
         Stock price or other criteria,  as shall be determined by the Committee
         at grant. If the Committee provides, in its discretion,  that any Stock
         Option is  exercisable  only in  installments,  the Committee may waive
         such  installment  exercise  provision  at any time in whole or in part
         based on  performance  and/or such other  factors as the  Committee may
         determine in its sole discretion.

                  (d) Method of  Exercise.  Stock  Options may be  exercised  in
         whole  or in part at any time  during  the  option  period,  by  giving
         written  notice of  exercise to the  Company  specifying  the number of
         shares to be purchased,  accompanied by payment in full of the purchase
         price, in cash, by check or such other  instrument as may be acceptable
         to  the  Committee.  As  determined  by  the  Committee,  in  its  sole
         discretion,  at or after grant,  payment in full or in part may also be
         made in the form of unrestricted Stock owned by the optionee or, in the
         case of the exercise of a Non-Qualified Stock Option,  Restricted Stock
         subject to an award hereunder may be used for payment  (based,  in each
         case,  on the Fair Market  Value of the Stock on the date the option is
         exercised,  as determined by the  Committee).  If payment of the option
         exercise price of a  Non-Qualified  Stock Option is made in whole or in
         part with  shares of  Restricted  Stock the  shares  received  upon the
         exercise of such Stock Option shall be restricted  or deferred,  as the
         case may be, in  accordance  with the original  term of the  Restricted
         Stock award in question, except that the Committee may direct that such
         restrictions or deferral  provisions  shall apply only to the number of
         such  shares  equal  to  the  number  of  shares  of  Restricted  Stock
         surrendered upon the exercise of such option. No shares of unrestricted
         Stock shall be issued  until full payment  therefor  has been made.  An
         optionee  shall  have the  rights  to  dividends  or other  rights of a
         stockholder  with  respect to shares  subject  to the  option  when the
         optionee has given written  notice of exercise and has paid in full for
         such shares.

                                      - 6 -
(e)  Non-transferability  of Options.  Except as otherwise set
         forth in this Section  5(e), no Stock Option shall be  transferable  by
         the  Optionee  otherwise  than by will or by the  laws of  descent  and
         distribution.  All  Stock  Options  shall be  exercisable,  during  the
         optionee's lifetime, only by the optionee. The Committee shall have the
         discretionary authority,  however, to grant Non-Qualified Stock Options
         which  would be  transferable  to  members of an  optionee's  immediate
         family (which shall include, for purposes of this section,  spouses and
         children and grandchildren,  whether natural or adopted), and to trusts
         for the benefit of such family members and  partnerships  in which such
         family members are the only partners.  For purposes of paragraphs  (f),
         (g),  (h)  and (i) of  this  Section  5, a  transferred  option  may be
         exercised by the transferee  only to the extent that the optionee would
         have been entitled had the option not been transferred.

                  (f)  Termination  of  Employment  by Reason  of Death.  Unless
         otherwise  determined by the Committee,  if any  optionee's  employment
         with the Company,  any  Subsidiary,  and any  Affiliate  terminates  by
         reason of  death,  the  Stock  Option  may  thereafter  be  immediately
         exercised, to the extent then exercisable (or on such accelerated basis
         as the  Committee  shall  determine  at or after  grant),  by the legal
         representative  of the estate or by the legatee of the  optionee  under
         the will of the optionee, for a period of one (1) year from the date of
         such death or until the  expiration  of the  stated  term of such Stock
         Option, whichever period is the shorter.

                  (g) Termination of Employment by Reason of Disability.  Unless
         otherwise  determined by the Committee,  if any  optionee's  employment
         with the Company, and Subsidiary and any Affiliate terminates by reason
         of Disability, any Stock Option held by such optionee may thereafter be
         exercised,  to the extent it was exercisable at the time of termination
         due to Disability (or on such accelerated  basis as the Committee shall
         determine at or after  grant),  but may not be exercised  after one (1)
         year from the date of such  termination of employment or the expiration
         of the  stated  term of such  Stock  Option,  whichever  period  is the
         shorter;  provided,  however,  that,  if the optionee  dies within such
         one-year  period,  any  unexercised  Stock Option held by such optionee
         shall  thereafter  be  exercisable  to  the  extent  to  which  it  was
         exercisable at the time of death for a period of twelve months from the
         date of  such  death  or for the  stated  term  of such  Stock  Option,
         whichever  period  is the  shorter.  In the  event  of  termination  of
         employment  by reason of  Disability,  if an Incentive  Stock Option is
         exercised  after the expiration of the exercise  periods that apply for
         purposes of Section 422 of the Code,  such Stock Option will thereafter
         be treated as a Non-Qualified Stock Option.

                  (h) Termination of Employment by Reason of Retirement.  Unless
         otherwise  determined by the Committee,  if any  optionee's  employment
         with the Company, any Subsidiary and any Affiliate terminates by reason
         of Normal or Early  Retirement,  any Stock Option held by such optionee
         may  thereafter  be exercised to the extent it was  exercisable  at the
         time of such Retirement (or on such accelerated  basis as the Committee
         shall determine at or after grant),  but may not be exercised after one
         (1)  year  from  the  date of such  termination  of  employment  or the
         expiration of the stated term of such Stock

                                      - 7 -
Option, whichever period is the shorter; provided, however, that if the
         optionee dies within such one-year period any unexercised  Stock Option
         held by such optionee shall thereafter be exercisable, to the extent to
         which it was  exercisable at the time of death,  for a period of twelve
         months  from the date of such death or for the stated term of the Stock
         Option, whichever period is the shorter. In the event of termination of
         employment  by reason of  Retirement,  if an Incentive  Stock Option is
         exercised after the exercise periods that apply for purposes of Section
         422 of the Code,  such Stock  Option  will  thereafter  be treated as a
         Non-Qualified Stock Option.

                  (i)  Other   Termination  of  Employment.   Unless   otherwise
         determined  by the  Committee,  if an  optionee's  employment  with the
         Company,  any  Subsidiary  and any Affiliate  terminates for any reason
         other than death,  Disability  or  Retirement,  the Stock  Option shall
         thereupon terminate, except that such Stock Option may be exercised for
         the lesser of three months from the date of  termination or the balance
         of such  Stock  Option's  term if the  optionee's  employment  with the
         Company,  and Subsidiary and any Affiliate is involuntarily  terminated
         by the optionee's employer without Cause.

                  (j) Limit on Value of Incentive Stock Option First Exercisable
         Annually.  The aggregate  Fair Market Value  (determined at the time of
         grant) of the Stock for which  Incentive  Stock Options are exercisable
         for the first time by an optionee  during any  calendar  year under the
         Plan  (and/or  any  other  stock  option  plans  of  the  Company,  any
         Subsidiary and any Affiliate) shall not exceed $100,000.

SECTION 6.  Stock Appreciation Rights.

         (a) Grant and Exercise When Granted in Conjunction  With Stock Options.
Stock Appreciation  Rights may be granted in conjunction with all or part of any
Stock  Option  granted  under  the Plan and may  contain  terms  and  conditions
different from those of the related Stock Option,  except as otherwise  provided
below. In the case of a Non-Qualified  Stock Option,  such rights may be granted
either at or after the time of the grant of such Non-Qualified  Stock Option. In
the case of an Incentive  Stock  Option,  such rights may be granted only at the
time of the grant of such Incentive Stock Option.

         A Stock  Appreciation  Right or applicable  portion hereof granted with
respect to a given Stock Option  shall  terminate  and no longer be  exercisable
upon the  termination  or exercise of the related  Stock  Option,  except  that,
unless  otherwise  provided  by the  Committee  at the  time of  grant,  a Stock
Appreciation  Right  granted with respect to less than the full number of shares
covered  by a related  Stock  Option  shall only be reduced if and to the extent
that the number of shares  covered by the exercise or termination of the related
Stock Option exceeds the number of shares not covered by the Stock  Appreciation
Right.

         A  Stock  Appreciation  Right  may  be  exercised  by an  optionee,  in
accordance with paragraph (c) of this Section 6, by surrendering  the applicable
portion of the related  Stock  Option.  Upon such  exercise and  surrender,  the
optionee shall be entitled to receive an amount

                                      - 8 -
determined  in the manner  prescribed  in paragraph (c) of this Section 6. Stock
Options which have been so surrendered,  in whole or in part, shall no longer be
exercisable  to the extent  the  related  Stock  Appreciation  Rights  have been
exercised.

         (b) Grant and Exercise When Granted Alone.  Stock  Appreciation  Rights
may be granted at the  discretion of the Committee in a manner not related to an
award of a Stock Option.  The Stock  Appreciation  Right,  granted under Section
6(b),  shall be exercisable in accordance with Section 6(c) over a period not to
exceed ten years. Any Stock  Appreciation Right which is outstanding on the last
day of the exercisable period shall be automatically  exercised on such date for
cash or Common Stock, as determined by the Committee,  without any action by the
holder.

         (c) Terms and Conditions. Stock Appreciation Rights shall be subject to
such terms and conditions,  not inconsistent with the provisions of the Plan, as
shall be determined from time to time by the Committee, including the following:

                  (i) Stock Appreciation Rights granted pursuant to Section 6(a)
         shall be exercisable  only at such time or times and to the extent that
         the Stock Options to which the Stock  Appreciation  Rights relate shall
         be exercisable in accordance  with the provisions of Section 5 and this
         Section 6 of the Plan.

                  (ii) Upon the exercise of a Stock  Appreciation  Right granted
         pursuant to Section 6(a),  an optionee  shall be entitled to receive an
         amount in cash or shares of Stock  equal in value to the  excess of the
         Fair Market Value of one share of Stock over the option price per share
         specified  in the  related  Stock  Option  multiplied  by the number of
         shares in respect of which the Stock Appreciation Right shall have been
         exercised, with the Committee having the right to determine the form of
         payment.  Upon  the  exercise  of a Stock  Appreciation  Right  granted
         pursuant to Section  6(b),  the holder  shall be entitled to receive an
         amount in cash or shares of Stock  equal in value to the  excess of the
         Fair Market  Value of one share of Stock over the Fair Market  Value of
         one share of Stock at the date the Stock Appreciation Right was granted
         multiplied  by the  number  of  shares  in  respect  of which the Stock
         Appreciation Right shall have been exercised, with the Committee having
         the right to determine the form of payment.

                  (iii) Stock  Appreciation  Rights shall be  transferable  only
         when  and to the  extent  that any  underlying  Stock  Option  would be
         transferable  under paragraph (e) of Section 5 of the Plan.  Otherwise,
         Stock Appreciation Rights shall not be transferable by the holder other
         than by will or the laws of  descent  and  distribution.  Except as set
         forth above, all Stock Appreciation Rights shall be exercisable, during
         the holder's lifetime, only by the holder.

                  (iv) Upon the exercise of a Stock  Appreciation  Right granted
         pursuant to Section 6(a),  the Stock  Option,  or part thereof to which
         such Stock Appreciation Right is related,  shall be deemed to have been
         exercised for the purpose of the limitation set

                                      - 9 -
forth in Section 3 of the Plan on the number of shares of Stock to be 
         issued under the Plan.

                  (v) A Stock  Appreciation  Right granted in connection with an
         Incentive  Stock Option  pursuant to Section 6(a) may be exercised only
         if and when the  market  price of the Stock  subject  to the  Incentive
         Stock Option exceeds the exercise price of such Stock Option.

                  (vi) In its sole discretion, the Committee may provide, at the
         time of grant of a Stock  Appreciation Right under this Section 6, that
         such Stock  Appreciation  Right can be exercised only in the event of a
         "Change of Control" and/or a "Potential  Change of Control" (as defined
         in Section 12 below).

                  (vii) The Committee, in its sole discretion,  may also provide
         that in the event of a "Change of Control"  and/or a "Potential  Change
         of Control" (as defined in Section 12 below) the amount to be paid upon
         the  exercise  of a Stock  Appreciation  Right  shall  be  based on the
         "Change of Control Price" (as defined in Section 12 below).

                  (viii) Any exercise by a participant  of all or a portion of a
         Stock  Appreciation  Right for cash, may only be made during the period
         beginning on the third business day following the date of the Company's
         release of its  quarterly  or annual  summary  statements  of sales and
         earnings to the public and ending on the twelfth business day following
         such date; provided, however, that the foregoing shall not apply to any
         exercise by a participant of a Stock  Appreciation Right for cash where
         the date of exercise is  automatic  or fixed in advance  under the Plan
         and is outside the control of the participant.

SECTION 7.  Restricted Stock.

         (a)  Administration.  Shares of  Restricted  Stock may be issued either
alone or in addition to other awards granted under the Plan. The Committee shall
determine the officers and key employees of the Company and its Subsidiaries and
Affiliates to whom, and the time or times at which,  grants of Restricted  Stock
will be made, the number of shares to be awarded,  the price, if any, to be paid
by the recipient of Restricted Stock (subject to Section 7(b) hereof),  the time
or times  within which such awards may be subject to  forfeiture,  and all other
conditions of the awards. However, in no event shall any restriction,  including
risk of  forfeiture,  attach to the  Restricted  Stock for a term to exceed  ten
years from the date such Stock was granted. The Committee may also condition the
grant of Restricted Stock upon the attainment of specified performance goals, or
such other criteria as the Committee may determine, in its sole discretion.  The
provisions of Restricted  Stock awards need not be the same with respect to each
recipient.

         (b) Awards and Certificates.  The prospective  recipient of an award of
shares of Restricted Stock shall not have any rights with respect to such award,
unless and until such  recipient has executed an agreement  evidencing the award
(a "Restricted Stock Award

                                     - 10 -
Agreement") and has delivered a fully executed copy thereof to the Company,  and
has otherwise complied with the then applicable terms and conditions.

                  (i)  Awards of  Restricted  Stock  must be  accepted  within a
         period of 60 days (or such shorter period as the Committee may specify)
         after the award date by  executing a Restricted  Stock Award  Agreement
         and paying whatever price, if any, is required.

                  (ii) Each participant who is awarded Restricted Stock shall be
         issued a stock  certificate  in  respect of such  shares of  Restricted
         Stock.

         Such  certificate  shall be registered in the name of the  participant,
         and  shall  bear  an  appropriate   legend   referring  to  the  terms,
         conditions, and restrictions applicable to such award, substantially in
         the following form:

                           "The  transferability  of  this  certificate  and the
                  shares of stock  represented  hereby are  subject to the terms
                  and conditions (including  forfeiture) of the Birmingham Steel
                  Corporation  1997  Management  Incentive Plan and a Restricted
                  Stock Agreement  entered into between the registered owner and
                  Birmingham  Steel   Corporation.   Copies  of  such  Plan  and
                  Agreement  are on  file in the  offices  of  Birmingham  Steel
                  Corporation,  1000 Urban Center Drive, Suite 300,  Birmingham,
                  Alabama 35242-2516."

                  (iii) The Committee shall require that the stock  certificates
         evidencing  such  shares be held in  custody by the  Company  until the
         restrictions thereon shall have lapsed, and that, as a condition of any
         Restricted  Stock award,  the participant  shall have delivered a stock
         power, endorsed in blank, relating to the Stock covered by such award.

         (c) Restrictions and Conditions. The shares of Restricted Stock awarded
pursuant to this Section 7 shall be subject to the  following  restrictions  and
conditions:

                  (i)  Subject  to the  provisions  of this Plan and  Restricted
         Stock Award Agreements,  during the period established by the Committee
         in  which  the   Restricted   Stock  is  subject  to  forfeiture   (the
         "Restriction  Period"), the participant shall not be permitted to sell,
         transfer, pledge or assign shares of Restricted Stock awarded under the
         Plan.  Within these limits,  the Committee may, in its sole discretion,
         provide  for the lapse of such  restrictions  in  installments  and may
         accelerate  or waive  such  restrictions  in whole or in part  based on
         performance  and/or such other factors as the Committee may  determine,
         in its sole discretion.

                  (ii) Except as provided in paragraph (c)(i) of this Section 7,
         the  participant  shall have,  with respect to the shares of Restricted
         Stock, all of the rights of a stockholder of the Company, including the
         right to receive any dividends.

                                     - 11 -
Dividends  paid in cash with  respect to shares of  Restricted
         Stock  shall  not  be  subject  to  any   restrictions  or  subject  to
         forfeiture. Dividends paid in stock of the Company or stock received in
         connection with a stock split with respect to Restricted Stock shall be
         subject  to  the  same   restrictions  as  on  such  Restricted  Stock.
         Certificates for shares of unrestricted Stock shall be delivered to the
         participant  promptly after,  and only after,  the period of forfeiture
         shall expire without forfeiture in respect of such shares of Restricted
         Stock.

                  (iii) Subject to the provisions of the Restricted  Stock Award
         Agreement and this Section 7, upon  termination  of employment  for any
         reason  during the  Restriction  Period,  all shares  still  subject to
         restriction shall be forfeited by the participant,  and the participant
         shall only receive the amount, if any, paid by the participant for such
         forfeited Restricted Stock.

                  (iv) In the  event  of  special  hardship  circumstances  of a
         participant  whose employment is involuntarily  terminated  (other than
         for Cause),  the Committee may, in its sole discretion,  waive in whole
         or in part  any or all  remaining  restrictions  with  respect  to such
         participant's shares of Restricted Stock.

SECTION 8.  Performance Awards.

         (a) Administration.  Shares of Common Stock or a payment in cash may be
distributed  under the Plan upon the attainment of achievement  objectives to an
employee as a Performance  Award. The Committee shall determine the officers and
key  employees of the Company and its  Subsidiaries  and  Affiliates to whom the
Performance  Award is  granted,  the terms  and  conditions  of the  achievement
objectives,  the term of the  performance  period  and the level and form of the
payment of the Performance Award.

         (b) Achievement  Objectives.  The Committee, at its sole discretion may
establish,  under this  Section  8,  achievement  objectives  either in terms of
Company-wide  objectives  or in terms of  objectives  that  are  related  to the
specific performance of the employee or the division, subsidiary,  department or
function  within the Company in which the employee is employed.  A minimum level
of acceptance, at the discretion of the Committee, may be established.

         If at the end of the performance  period the specified  objectives have
been  attained,  the  employee  is deemed to have fully  earned the  Performance
Award. If such  achievement  objectives have not been attained,  the employee is
deemed to have  partly  earned the  Performance  Award and  becomes  eligible to
receive a portion of the total  award,  as  determined  by the  Committee.  If a
required minimum level of achievement has not been met, the employee is entitled
to no portion of the  Performance  Award.  Subject to Section  8(d)  below,  the
Company may adjust the payment of awards or the achievement objectives if events
occur or  circumstances  arise which would cause a particular  payment or set of
achievement objectives to be inappropriate as a measure of performance.

                                     - 12 -
(c) Terms and Conditions.  An employee to whom a Performance  Award has
been  granted is given  achievement  objectives  to be reached  over a specified
period,  referred to herein as the "performance  period".  Generally this period
shall be not less than 1 year but in no case shall the period exceed 5 years.

         An employee granted a Performance  Award pursuant to this Section 8 who
by reason of death,  disability or retirement  terminates  employment before the
end of the  performance  period is  entitled  to receive a portion of any earned
Performance Award.

         An employee who terminates employment for any other reason forfeits all
rights under the Performance Award.

         (d) Section  162(m)  Provisions.  Unless  otherwise  determined  by the
Committee,  achievement  objectives  established  for the top five  most  highly
compensated   officers  of  the  Company  shall  be  pre-established   objective
performance  goals within the meaning of Section 162(m) of the Code and treasury
regulations promulgated thereunder.  Furthermore, unless otherwise determined by
the  Committee,  once the  Committee  has  established  one or more  achievement
objectives  with respect to a  Performance  Award granted to one of the top five
most  highly  compensated  officers of the Company  which  were,  when  granted,
intended to be pre-established objective performance goals within the meaning of
Section  162(m)  of the  Code  and  the  treasury  regulations  thereunder,  the
Committee  shall not waive or alter the  targets  after the  earlier  of (i) the
expiration of twenty-five  percent (25%) of the  performance  period or (ii) the
date on which the outcome under the objectives is substantially certain.  Unless
otherwise  determined  by the  Committee,  if any  provision  of the Plan or any
Performance  Award  granted  to an  individual  who is one of the top five  most
highly  compensated  officers  of the Company  hereunder  would  disqualify  the
Performance Award with respect to such individual, or would otherwise not comply
with Section 162(m) of the Code,  such  provision or Performance  Award shall be
construed or deemed amended to conform to Section 162(m) of the Code.

SECTION 9.  Loan Provisions.

         With the consent of the  Committee,  the  Company may make,  or arrange
for, a loan or loans to an employee  with  respect to the  exercise of any Stock
Option granted under the Plan and/or with respect to the payment of the purchase
price, if any, of any Restricted  Stock awarded  hereunder.  The Committee shall
have full authority to decide  whether to make a loan or loans  hereunder and to
determine the amount,  term and provisions of any such loan or loans,  including
the  interest  rate to be charged in respect of any such loan or loans,  whether
the loan or loans are to be with or without recourse  against the borrower,  the
terms on which the loan is to be repaid and the conditions,  if any, under which
the loan or loans may be forgiven.

SECTION 10. Amendments and Termination.

         The Board may amend,  alter,  or discontinue  the Plan as it shall deem
advisable  or to  conform  to any  change in any  applicable  law or  regulation
applicable thereto (including, without

                                     - 13 -
limitation,  applicable  federal  securities laws and regulations and applicable
federal income tax laws and regulations);  provided, however, that no amendment,
alteration,  or discontinuation shall be made which would impair the right of an
optionee  or  participant  under  a  Stock  Option,  Stock  Appreciation  Right,
Restricted  Stock,  or  Performance  Award  theretofore  granted,   without  the
optionee's  or  participant's  consent,  or which  without  the  approval of the
stockholders would:

                  (a) except as expressly provided in this Plan, increase the
         total number of shares reserved for the purpose of the Plan;

                  (b) decrease the option price of any Stock Option to less than
         100% of the  Fair  Market  Value  on the  date of the  granting  of the
         option;

                  (c) change the participants or class of participants eligible
         to participate in the Plan; or

                  (d) extend the maximum option period under paragraph (b) of 
         Section 5 of the Plan.

         The  Committee  may amend the terms of any award or option  theretofore
granted, prospectively or retroactively,  but no such amendment shall impair the
rights  of any  holder  without  his or her  consent.  The  Committee  may  also
substitute  new Stock Options for  previously  granted  Stock Options  including
options  granted under other plans  applicable to the participant and previously
granted Stock Options having higher option prices. Notwithstanding any provision
of this Plan or this Section 10,  neither the Board nor the  Committee may amend
the Plan or the  terms of any  Stock  Option,  award  or grant to  decrease  the
exercise price of any Stock Option to less than 100% of the Fair Market Value of
the underlying shares on the date of the granting of the option.

SECTION 11.  Unfunded Status of Plan.

         The Plan is intended to constitute an "unfunded" plan for incentive and
deferred  compensation.  With  respect  to  any  payments  not  yet  made  to  a
participant or optionee by the Company,  nothing set forth herein shall give any
such participant or optionee any rights that are greater than those of a general
creditor of the Company. In its sole discretion, the Committee may authorize the
creation of trusts or other  arrangements to meet the obligations  created under
the Plan to  deliver  Stock or  payment  in lieu of or with  respect  to  awards
hereunder;  provided,  however,  that  the  existence  of such  trusts  or other
arrangements shall be consistent with the unfunded status of the Plan.

SECTION 12.  Change of Control.

         The following  acceleration and valuation provisions shall apply in the
event of a "Change of Control" or  "Potential  Change of Control," as defined in
this Section 12:

                                     - 14 -
(a) In the event of a "Change of Control" as defined in  paragraph  (b)
of this Section 12, unless otherwise determined by the Committee or the Board in
writing  at or after  grant,  but  prior to the  occurrence  of such  Change  of
Control, or, if and to the extent so determined by the Committee or the Board in
writing at or after grant (subject to any right of approval  expressly  reserved
by the Committee or the Board at the time of such determination) in the event of
a "Potential Change of Control," as defined in paragraph (c) of this Section 12:

                           (i) any  Stock  Appreciation  Rights  and  any  Stock
                  Options awarded under the Plan, if not previously  exercisable
                  and vested shall become fully exercisable and vested;

                           (ii)  the  restrictions   and  deferral   limitations
                  applicable to any Restricted  Stock award under the Plan shall
                  lapse and such shares and awards shall be deemed fully vested;
                  and

                           (iii) the  value of all  outstanding  Stock  Options,
                  Stock  Appreciation  Rights,  Restricted  Stock or Performance
                  Awards shall, to the extent  determined by the Committee at or
                  after  grant,  be cashed  out on the basis of the  "Change  of
                  Control  Price" (as defined in  paragraph  (d) of this Section
                  12) as of the date the Change of Control  occurs or  Potential
                  Change of  Control is  determined  to have  occurred,  or such
                  other date as the Committee may determine  prior to the Change
                  of  Control  or  Potential  Change  of  Control.  In the  sole
                  discretion of the Committee,  such settlements may be in cash,
                  in stock,  or other  consideration  as shall be  necessary  to
                  effect the desired  accounting  treatment for the  transaction
                  resulting from the "Change of Control."

         (b) For  purpose  of  paragraph  (a) of this  Section  12, a "Change of
Control" means the happening of any of the following:

                           (i)  when  any  "person",  as  such  term  is used in
                  Section  13(d) and 14(d) of the  Exchange  Act (other than the
                  Company or a Subsidiary or any Company  employee  benefit plan
                  (including its trustee)), is or becomes the "beneficial owner"
                  (as defined in Rule 13d-3 under the Exchange Act), directly or
                  indirectly  of  securities  of  the  Company  representing  20
                  percent or more of the combined  voting power of the Company's
                  then outstanding securities;

                           (ii) when, during any period of two consecutive years
                  during the existence of the Plan, the individuals  who, at the
                  beginning of such period,  constitute the Board cease, for any
                  reason  other than death,  to  constitute  at least a majority
                  thereof,  unless each  director  who was not a director at the
                  beginning   of  such   period  was   elected  by,  or  on  the
                  recommendation of, at least two-thirds of the directors at the
                  beginning of such period; or

                                     - 15 -
(iii)  the  occurrence  of  a  transaction  requiring
                  stockholder  approval for the acquisition of the Company by an
                  entity other than the Company or a Subsidiary through purchase
                  of assets, or by merger, or otherwise.

         (c) For  purposes of  paragraph  (a) of this  Section 12, a  "Potential
Change of Control" means the happening of any of the following:

                           (i) the  entering  into an  agreement by the Company,
                  the  consummation of which would result in a Change of Control
                  of the Company as defined in paragraph (b) of this Section 12;
                  or

                           (ii)  the   acquisition   of  beneficial   ownership,
                  directly or indirectly,  by any entity, person or group (other
                  than the  Company  or a  Subsidiary  or any  Company  employee
                  benefit plan  (including  its  trustee)) of  securities of the
                  Company  representing 5 percent or more of the combined voting
                  power of the Company's outstanding securities and the adoption
                  by the Board of Directors of a resolution to the effect that a
                  Potential  Change of Control of the Company has  occurred  for
                  purposes of this Plan.

         (d) For  purposes of this Section 12,  "Change of Control  Price" means
the  highest  price per share paid in any  transaction  reported on the New York
Stock Exchange Composite Tape, or paid or offered in any transaction  related to
a  potential  or actual  Change of Control of the Company at any time during the
preceding  sixty (60) day period as determined by the Committee,  except that in
the case of Incentive  Stock Options and Stock  Appreciation  Rights relating to
Incentive Stock Options, such price shall be based only on transactions reported
for the date on which the Committee decides to cash out such options.

SECTION 13.  General Provisions.

         (a) All certificates for shares of Stock delivered under the Plan shall
be subject to such stock transfer orders and other restrictions as the Committee
may deem advisable under the rules,  regulations  and other  requirements of the
Commission,  any stock  exchange  upon which the Stock is 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.

         (b)  Nothing  set  forth in this Plan  shall  prevent  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.  The adoption of the
Plan shall not confer upon any employee of the Company,  any  Subsidiary  or any
Affiliate,  any right to continued  employment with the Company, a Subsidiary or
an  Affiliate,  as the case may be, nor shall it  interfere  in any way with the
right of the Company,  a Subsidiary or an Affiliate to terminate the  employment
of any of its employees at any time.

                                     - 16 -
(c) No employee  shall have any rights as a shareholder  of the Company
as a result of the grant of a Stock  Option to him or to her under  this Plan or
his or her  exercise of such Stock Option  pending the actual  issuance of Stock
subject to such Stock Option to such employee.

         (d) Each  participant  shall,  no later  than the date as of which  the
value  of an  award  first  becomes  includable  in  the  gross  income  of  the
participant  for  Federal  income  tax  purposes,  pay to the  Company,  or make
arrangements  satisfactory to the Committee  regarding  payment of, any Federal,
state, or local taxes of any kind required by law to be withheld with respect to
the award. The obligations of the Company under the Plan shall be conditional on
such  payment or  arrangements  and the  Company  (and,  where  applicable,  its
Subsidiaries  and  Affiliates),  shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to the
participant.  Subject to applicable laws and regulations regarding  transactions
in Company Stock by persons who are deemed insiders,  a participant may elect to
have the withholding  tax  obligations  or, in the case of all awards  hereunder
except  Stock  Options  which have related  Stock  Appreciation  Rights,  if the
Committee so  determines,  any  additional  tax  obligation  with respect to any
awards  hereunder  satisfied by (a) having the Company  withhold shares of Stock
otherwise  deliverable  to the  participant  with  respect  to the  award or (b)
delivering to the Company shares of unrestricted Stock.

         (e) At the time of grant or  purchase,  the  Committee  may  provide in
connection  with any grant or  purchase  made under this Plan that the shares of
Stock received as a result of such grant or purchase shall be subject to a right
of first refusal,  pursuant to which the participant  shall be required to offer
the Company any shares that the participant wishes to sell, with the price being
the then Fair Market  Value of the Stock,  subject to  provisions  of Section 13
hereof and to such other terms and  conditions  as the  Committee may specify at
the time of grant.

         (f) No  member  of the  Board  or the  Committee,  nor any  officer  or
employee of the Company acting on behalf of the Board or the Committee, shall be
personally liable for any action, determination, or interpretation taken or made
in good faith  with  respect  to the Plan,  and all  members of the Board or the
Committee  and each and any officer or  employee of the Company  acting on their
behalf shall, to the extent permitted by law, be fully indemnified and protected
by the Company in respect of any such action, determination or interpretation.

         (g) If any provision of the Plan or any agreement representing an award
granted  hereunder  is or  becomes  or is  deemed  to be  invalid,  illegal,  or
unenforceable  in any  jurisdiction  or as to any  person  or  award,  or  would
disqualify  the  Plan or any  award  granted  hereunder  under  any  law  deemed
applicable by the Committee, such provision shall be construed or deemed amended
to  conform  to the  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 or the award,  such  provision  shall be  stricken as to such
jurisdiction,  person or award and the  remainder of the Plan and any such award
shall remain in full force and effect.

                                     - 17 -
(h) Each award under the Plan shall be subject to the requirement that,
if at any time the Committee shall determine that (a) the listing,  registration
or  qualification  of the shares of Stock  subject or related  thereto  upon any
securities  exchange  or under any state or federal  law,  or (b) the consent or
approval of any  government  regulatory  authority,  or (c) an  agreement by the
recipient of an award with  respect to the  disposition  of shares of Stock,  is
necessary or desirable as a condition of, or in connection with, the granting of
such award or the issue or  purchase of shares of Stock  thereunder,  such award
may not be  consummated  in whole or in part unless such listing,  registration,
qualification,  consent,  approval  or  agreement  shall have been  effected  or
obtained free of any conditions  not acceptable to the Committee.  A participant
shall agree,  as a condition of receiving  any award under the Plan,  to execute
any  documents,  make  any  representations,  agree  to  restrictions  on  stock
transferability  and take any actions  which in the opinion of legal  counsel to
the Company is required by any applicable law, ruling or regulation.

         (i) Nothing in the Plan shall  affect the right or power of the Company
or  its   stockholders   to  make   or   authorize   any  or  all   adjustments,
recapitalizations,  reorganizations  or other changes in the  Company's  capital
structure or its business, or any merger or consolidation of the Company, or any
issue of stock or of options,  warrants or rights to purchase stock or of bonds,
debentures, preferred or prior preference stocks whose rights are superior to or
affect  the  Stock or the  rights  thereof  or  which  are  convertible  into or
exchangeable for Stock, or the dissolution or liquidation of the Company, or any
sale or  transfer  of all or any part of its  assets or  business,  or any other
corporate act or proceeding, whether of a similar character or otherwise.

         (j)  Headings are given to the  sections  and  subsections  of the Plan
solely as a convenience  to  facilitate  reference.  Such headings  shall not be
deemed in any way material or relevant to the construction or  interpretation of
the Plan or any provision thereof.

SECTION 14.  Effective Date of Plan.

         The effective  date of this Plan shall be the date it is adopted by the
Board;  provided  that the  shareholders  of the Company  shall approve the Plan
within  twelve (12) months after the date of adoption;  and,  provided  further,
that any  awards  granted  under this Plan  before the date of such  shareholder
approval shall be granted subject to such approval.

SECTION  15.  Term of Plan.

         No  Stock  Option,  Stock  Appreciation  Right,   Restricted  Stock  or
Performance  Award  shall be granted  pursuant to the Plan on or after the tenth
anniversary of the date of stockholder approval,  but awards theretofore granted
may extend beyond that date.

                                     - 18 -
[BALCH & BINGHAM LLP LETTERHEAD]

Exhibit 5.1

                                                 February 23, 1998

Birmingham Steel Corporation
1000 Urban Center Drive
Suite 300
Birmingham, Alabama  35242-2516

         Re:   Birmingham Steel Corporation - Registration Statement on Form S-8

Ladies and Gentlemen:

         In connection with the  registration  under the Securities Act of 1933,
as amended, of 900,000 shares of the common stock, $.01 par value per share (the
"Common Stock"),  of Birmingham Steel Corporation,  a Delaware  corporation (the
"Corporation"),   for  issuance  and  sale  in  the  manner   described  in  the
Corporation's  Registration  Statement on Form S-8 filed with the Securities and
Exchange  Commission,  to which this  opinion is an exhibit  (the  "Registration
Statement"),  we, as counsel to the  Corporation,  have examined such  corporate
records,  certificates,  and  other  documents  as we  considered  necessary  or
appropriate for the purposes of delivering this opinion.

         On the basis of the  foregoing,  we are of the opinion  that the Common
Stock offered pursuant to the  Registration  Statement has been duly and validly
authorized and is, or when issued in accordance  with the  respective  governing
documents will be, duly and validly issued, fully paid, and nonassessable.

         We hereby  consent to the  filing of this  opinion as an exhibit to the
Registration Statement.

                                Yours very truly,

                                /s/ Balch & Bingham LLP
Exhibit 23.1

                          Consent of Ernst & Young LLP

We consent to the incorporation by reference in the Registration Statement (Form
S-8  No.  333-00000)   pertaining  to  the  Birmingham  Steel  Corporation  1997
Management  Incentive  Plan of our report dated August 6, 1997,  with respect to
the  consolidated   financial   statements  and  schedule  of  Birmingham  Steel
Corporation  included in its Annual  Report  (Form 10-K) for the year ended June
30, 1997, filed with the Securities and Exchange Commission.

                                                   /s/ Ernst & Young LLP

February 18, 1998
Exhibit 24

                                POWER OF ATTORNEY

                  WHEREAS,   the  Board  of   Directors  of   Birmingham   Steel
Corporation  (the  "Company") has determined  that it is in the best interest of
the  Company  to  register  900,000  shares of the  Company's  common  stock for
issuance under the Company's 1997 Management Incentive Plan; and

                  WHEREAS, the Company proposes to file a registration statement
on Form S-8 and amendments thereto under the Securities Act of 1933 with respect
to the above-referenced plan.

                  NOW,  THEREFORE,  KNOW  ALL MEN BY  THESE  PRESENTS,  that the
undersigned  directors and officers of the Company,  individually  as a director
and/or as an  officer  of the  Company,  hereby  make,  constitute  and  appoint
Catherine W. Pecher their true and lawful  attorney-in-fact for each of them and
in each of their names, places and steads to sign and cause to be filed with the
Securities  and  Exchange   Commission  said  registration   statement  and  any
appropriate amendments thereto, to be accompanied by any necessary exhibits.

                  The Company hereby  authorizes said persons or any one of them
to execute said registration  statement and amendments  thereto on its behalf as
attorney-in-fact  for it and its  authorized  officers,  and to file the same as
aforesaid.

                  The  undersigned  directors and officers of the Company hereby
authorize said persons or any one of them to sign said registration statement on
their behalf as  attorney-in-fact  and to amend, or remedy any deficiencies with
respect to, said registration  statement by appropriate  amendment or amendments
and to file the same as aforesaid,  hereby giving and granting to said attorneys
full  power  and  authority  to do so and  perform  all and  every act and thing
whatsoever  requisite and necessary to complete the foregoing,  hereby ratifying
and  confirming all that said attorneys may or shall do, or cause to be done, by
virtue hereof.

                  DONE this the 13th day of January, 1998.

                                                    /s/ E. Mandell de Windt
                                                    ----------------------------
                                                    E. Mandell de Windt

                                                    /s/ Robert A. Garvey
                                                    ----------------------------
                                                    Robert A. Garvey

                                                    /s/ Harry Holiday, Jr.
                                                    ----------------------------
                                                    Harry Holiday, Jr.

                                                    /s/ C. Stephen Clegg
                                                    ----------------------------
                                                    C. Stephen Clegg

                                                    /s/ George A. Stinson
                                                    ----------------------------
                                                    George A. Stinson

                                                    /s/ E. Bradley Jones
                                                    ----------------------------
                                                    E. Bradley Jones

                                                    /s/ Reginald H. Jones
                                                    ----------------------------
                                                    Reginald H. Jones

                                                    /s/ T. Evans Wyckoff
                                                    ----------------------------
                                                    T. Evans Wyckoff

                                                    /s/ William J. Cabaniss, Jr.
                                                    ----------------------------
                                                    William J. Cabaniss, Jr.

                                                    /s/ Robert D. Kennedy
                                                    ----------------------------
                                                    Robert D. Kennedy

                                                    /s/ J. Daniel Garrett
                                                    ----------------------------
                                                    J. Daniel Garrett