EMPLOYMENT AGREEMENT


THIS EMPLOYMENT  AGREEMENT (the  "Agreement") made as of this sixteenth
day  of  March,  2000,  by  and  between  STEEL  TECHNOLOGIES  INC.,  a
Kentucky   corporation,   with  offices  at  15415   Shelbyville  Road,
Louisville,  Kentucky  40245 (the  "Company")  and  BRADFORD T. RAY, an
individual   residing  at  14401  Champion  Woods  Place,   Louisville,
Kentucky 40245 (the "Executive").

WHEREAS,  the  Executive has made and is expected to continue to make a
major   contribution  to  the   profitability,   growth  and  financial
strength of the Company; and

WHEREAS,   the  Company   considers  the  continued   services  of  the
Executive  to  be  in  the  best  interests  of  the  Company  and  its
stockholders  and  desires  to assure  the  continued  services  of the
Executive on behalf of the Company; and

NOW,  THEREFORE,  in  consideration of the conditions and covenants set
forth in this Agreement, the parties hereto agree as follows:

1.  AGREEMENT  OF  EMPLOYMENT.   The  Company  agrees  to,  and  hereby
does,  employ the  Executive,  and the Executive  agrees to, and hereby
accepts,  employment by the Company,  as Chief Executive  Officer,  and
Vice  Chairman of the Board of  Directors  of the  Company,  to perform
such  executive  duties and  responsibilities  as may be assigned  from
time to time by the Board of  Directors  of the Company  (the  "Board")
subject,   at  all  times,   to  the  control  of  the  Board.   It  is
contemplated  that  the  Executive  will  continue  to  serve  as Chief
Executive Officer and Vice Chairman of the Board.

2.   EXECUTIVE'S DUTIES AND BENEFITS.

(a)   Duties.   During  the  period  of  his   employment   under  this
Agreement,  the Executive shall devote  sufficient time and energies to
the  supervision  and  management  of the  business  and affairs of the
Company,  and to the  furtherance of its  interests.  The Executive may
become a director  or trustee  of any  Company or entity  that does not
compete  with the business of the Company or  constitute a  Competitive
Operation as defined in Section 7 hereof.

(b) Vacation.  The Executive  shall be entitled to reasonable  vacation
periods during each full year of the Executive's employment hereunder.

(c)  Benefits.  The  Company  shall pay the  premiums  for  policies of
life,  medical,  disability,  travel and accident,  and  directors' and
officers'   liability   insurance   providing   coverage  and  benefits
comparable to the policies of insurance  maintained  for the benefit of
the  Executive  during  the  duration  of the this  Agreement  with the
Executive  making the same  contribution as each Company  benefits plan
requires   at  that  time.   The   Executive   shall  be   entitled  to
participate  in all  pension and profit  sharing  plans,  bonus  plans,
stock option plans and other  employee  benefit  plans and receive such
other  employment  benefits  as the  Company  may  from  time  to  time
maintain for the benefit of or provide to its executive  officers.

3.  REIMBURSEMENT  FOR  EXPENSES.   The  Company  shall  reimburse  the
Executive  for all  reasonable  expenses  which the  Executive may from
time to time incur on behalf of the Company in the  performance  of his
responsibilities  and duties under this  Agreement,  provided  that the
Executive  accounts  to the  Company  for  such  expenses  in a  manner
prescribed by the Company.

4.  COMPENSATION.

(a)   Salary.   During  the  period  of  the   Executive's   employment
hereunder,  the Company  shall pay to the  Executive  an annual  salary
(the "Base  Salary") of not less than Two  Hundred  and Fifty  Thousand
Dollars  ($250,000)  payable  in equal  installments  according  to the
payroll   schedule   of   the   Company.   The   Board,   through   its
Compensation  Committee,  shall in good faith review the Base Salary of
the  Executive,  on an annual  basis,  and  increase the Base Salary of
the Executive if, in the Board's judgment, such increase is advisable.

(b) Bonuses.  The  Executive  shall be entitled to  participate  in the
Steel  Technologies'  Bonus  Plan,  and receive  bonuses in  accordance
with the terms  thereof.  The Board,  in its  discretion,  may amend or
change  the Bonus  Plan or may award  such  additional  bonuses  to the
Executive as it may from time to time determine.

(c) Execution  Bonus.  The Executive  shall be entitled upon  execution
of this  Employment  Agreement  to a Two  Hundred  and  Fifty  Thousand
Dollars  ($250,000.00)  Execution  Bonus (the  "Execution  Bonus").  If

<PAGE>

the Executive's  employment is terminated  pursuant to Section 5(b)(v),
the  Executive  shall be required to  reimburse  the Company a pro-rata
share  of the  Execution  Bonus  within  fourteen  (14)  days  of  said
termination.

 (d) Loan.  The  Company  shall  provide to the  Executive,  within ten
(10) business days of full  execution of the  Employment  Agreement and
a  Promissory  Note in the form as  attached,  a four-year  loan in the
amount of Seven Hundred  Thousand  Dollars  ($700,000.00)  (the "Loan")
which  shall be due and  payable,  with  interest  at a rate of Six and
Fifty-Six   Hundredths   percent  (6.56%)  annually,   subject  to  the
following:

      (i) In the  event  that the  Executive  remains  employed  by the
Company up to and including  March 15, 2001,  the  Executive  shall not
be  required to pay the  interest  due on the Loan  through  such date,
and the  Executive's  compensation  shall be  Grossed-up  as defined in
Section 8 to account for any imputed  income from the  forgiving of the
accrued interest.

      (ii) In the event  that the  Executive  remains  employed  by the
Company up to and including  March 15, 2002,  the  Executive  shall not
be  required to pay the  interest  due on the Loan  through  such date,
and the  Executive's  compensation  shall be  Grossed-up  as defined in
Section 8 to account for any imputed  income from the  forgiving of the
accrued interest.

      (iii) In the event that the  Executive  remains  employed  by the
Company up to and including  March 15, 2003,  the  Executive  shall not
be  required to pay the  interest  due on the Loan  through  such date,
and the  Executive's  compensation  shall be  Grossed-up  as defined in
Section 8 to account for any imputed  income from the  forgiving of the
accrued interest.

      (iv) In the event  that the  Executive  remains  employed  by the
Company up to and including  March 15, 2004,  the  Executive  shall not
be  required to pay the  interest  due on the Loan  through  such date,
and the  Executive's  compensation  shall be  Grossed-up  as defined in
Section 8 to account for any imputed  income from the  forgiving of the
accrued interest.

(e)  Retention  Bonus.  The  Company  shall  provide  to the  Executive
retention  bonuses in the amount of One Hundred  Seventy-Five  Thousand
Dollars  ($175,000)  on each of the  following  four dates  payable if,
and only if,  Executive is employed on the  corresponding  date:  March
15, 2001; March 15, 2002; March 15, 2003; March 15, 2004.

Any  Repayment  called  for under this  Agreement  shall be made to the
Company  within  fourteen  (14)  days of the  Executive's  last  day of
employment  by  the  Company;  alternatively,  at  the  Company's  sole
discretion,  any required  loan  repayment  or interest  payment may be
satisfied,  in  whole  or in  part,  by  the  Company  offsetting  that
obligation against any amounts owing to the Executive by the Company.

5.   TERM OF EMPLOYMENT; TERMINATION.

(a) Term.  The term of this Agreement  shall  commence  effective as of
March 16,  2000  ("Effective  Date") and  continue  to March 15,  2004.
The  term  of  this  Agreement  shall  be  automatically  extended  for
successive  twelve-month  periods  unless,  at least  ninety  (90) days
prior to the  expiration of the then current  term,  either party gives
notice  to the  other  that the term of this  Agreement  will not be so
extended.

(b)  Termination.  Notwithstanding  anything to the contrary  contained
in this  Agreement,  the  Executive's  employment  under this Agreement
may be terminated as follows:

      (i)   Death.   The   Executive's   employment   hereunder   shall
terminate upon his death.

      (ii)  Disability.  In the event that two (2) licensed  physicians
shall have  certified  in writing  that the  Executive  has been unable
or will be  unable  to  perform  his  duties  hereunder  by  reason  of
illness,  incapacity  or other  physical  or  mental  disability  for a
period of twelve (12)  consecutive  months,  the Company may  terminate
the Executive's employment hereunder by reason of disability.

      (iii)  Cause.   The  Company  may   terminate   the   Executive's
employment  hereunder  for cause.  For the purposes of this  Agreement,
the  Company   shall  have   "cause"  to  terminate   the   Executive's
employment  hereunder  upon the  Executive's  (A) willful and continued
failure to substantially  perform his duties hereunder,  other than any
such  failure   resulting  from  the  Executive's   incapacity  due  to
physical  or  mental  illness;  (B)  fraud,   embezzlement,   or  other
intentional  misappropriation  from the Company;  (C)  conviction  of a
felony  involving  moral  turpitude;  (D) any other  conduct  involving
fraud,  gross negligence or willful  misconduct,  or other action which
materially  damages the  reputation  of the Company;  or (E) default of
any material  obligations  under this  Agreement,  which default is not
cured  within  thirty  (30) days  after  the date on which the  Company
gives the Executive written notice of such default.

      (iv)  Without  Cause.  The  Executive's   employment  under  this
Agreement may be  terminated  upon the  affirmative  vote of a majority
of the Board at a duly held meeting thereof.

<PAGE>

      (v) By Executive.  The  Executive  may  terminate his  employment
hereunder at any time by delivering  written  notice of  termination to
the Company at least  ninety (90) days prior to the  effective  date of
such  termination.  Any termination by the Company  pursuant to Section
5(b)(ii),  5(b)(iii)  or  5(b)(iv)  hereof  shall  be  communicated  by
written  Notice  of  Termination  to the  Executive.  For  purposes  of
this Agreement,  a "Notice of Termination"  shall mean a written notice
which  shall  indicate  the  specific  termination  provision  in  this
Agreement  relied  upon,  the date on which  the  termination  shall be
effective  (the  "Termination  Date"),  and, if  applicable,  shall set
forth in  reasonable  detail  the facts and  circumstances  claimed  to
provide a basis for  termination of the  Executive's  employment  under
the provision so indicated.

6.  COMPENSATION UPON TERMINATION OR DURING DISABILITY.

(a)  Death  Benefits.  If the  Executive  dies  during  the term of his
employment  hereunder,  in addition to any death benefits payable under
the terms of any life insurance  policies  maintained by the Company on
the  life of the  Executive,  and in  addition  to any  death  benefits
payable  on account  of the death of the  Executive  under the terms of
any tax qualified  retirement plans maintained by the Company,  (1) the
Company  shall  pay to the  estate  of the  Executive  a death  benefit
equal to 50% of the  Executive's  Base  Salary at the rate in effect on
the date of the Executive's  death to be paid in equal  installments at
two  week  intervals  over the six  months  following  the  Executive's
death,  plus an amount  equal to all the  bonuses the  Executive  would
have  received  under  Section 4 hereof  assuming  his  employment  had
continued  through the end of the next four fiscal  quarters  following
the  death  to be paid on or about  the date  that  said  bonuses  have
historically  been  paid and (2) the  Executive's  estate  shall not be
required   to  pay  any  accrued   interest   on  the  Loan,   and  the
Executive's  compensation  shall be  Grossed-up as defined in Section 8
to account for any imputed  income due to the  forgiving of any accrued
interest..

(b)  Disability.  If the  Executive's  employment  shall be  terminated
pursuant to Section  5(b)(ii),  the Executive  shall not be required to
pay  any   accrued   interest   on  the  Loan,   and  the   Executive's
compensation  shall be  Grossed-up  as  defined in Section 8 to account
for any  resulting  imputed  income due to the forgiving of any accrued
interest.

(c)  Cause.   If  the  Executive's   employment   shall  be  terminated
pursuant  to  Section   5(b)(iii),   (1)  the  Company  shall  pay  the
Executive any monthly  installment  of his Base Salary which is accrued
and  unpaid  as of the  Termination  Date at the rate  then in  effect,
and,  thereafter,  the Company shall have no further  obligation to pay
the Executive any additional  compensation  or bonuses,  to provide any
medical,   life,   disability  or  other  insurance   benefits  to  the
Executive  hereunder,  to pay any retirement  benefits to the Executive
in  excess  of those  provided  for by the  terms of the tax  qualified
retirement  plans  maintained  by the  Company as  required  by Section
6(f)  hereof or to pay any other  benefits  provided  to the  Executive
hereunder  and (2)  principal  and  interest of the  remaining  Section
4(d) loan shall be due and  payable  within  fourteen  (14) days of the
Executive's last day of employment;

(d) Without Cause.  If the Executive's  employment  shall be terminated
pursuant  to  Section  5(b)(iv),  (1)  the  Company  shall  pay  to the
Executive  in one lump sum  payment,  an amount  equal to one (1) times
the sum of (i) his Base  Salary at the rate then in effect  and (ii) an
amount  equal  to all  bonuses  paid by the  Company  to the  Executive
during the twelve  (12) month  period  ending on the  Termination  Date
and,  thereafter,  except as otherwise provided in this Agreement,  the
Company  shall  have no further  obligation  to pay the  Executive  any
additional  compensation or bonuses,  to pay any retirement benefits to
the  Executive in excess of those  provided for by the terms of the tax
qualified  retirement  plans  maintained  by the Company as required by
Section  6(f)  hereof  or to pay any  other  benefits  provided  to the
Executive  hereunder  and (2) the  Executive  shall not be  required to
pay  any   accrued   interest   on  the  Loan,   and  the   Executive's
compensation  shall be  Grossed-up  as  defined in Section 8 to account
for any  resulting  imputed  income due to the forgiving of any accrued
interest.


(e) By Executive.  If the  Executive's  employment  shall be terminated
pursuant to Section  5(b)(v),  (1) the Company  shall pay the Executive
any monthly  installment  of his Base  Salary  accrued and unpaid as of
the  effective  date of such  termination  at the rate then in  effect,
and,  thereafter,  the Company shall have no further  obligation to pay
the Executive any additional  compensation  or bonuses,  to provide any
medical,   life,   disability  or  other  insurance   benefits  to  the
Executive  hereunder,  to pay any retirement  benefits to the Executive
in  excess  of those  provided  for by the  terms of the tax  qualified
retirement  plans  maintained  by the  Company as  required  by Section
6(f)  hereof or to pay any other  benefits  provided  to the  Executive
hereunder,  and (2)  principal  and interest of the  remaining  Section
4(d) loan shall be due and  payable  within  fourteen  (14) days of the
Executive's last day of employment.

<PAGE>

(f)  Insurance.  If the  Executive's  employment  with the  Company  is
terminated   pursuant  to  the  provisions  of  Sections  5(b)(i),   or
5(b)(ii)  hereof,  the  Company  shall  pay  all  premiums,   with  the
beneficiary  of  the  policy  making  the  same  contributions  as  the
benefit  plan  requires  at  the  time  the  benefit  is  provided,  to
maintain  policies of (i) medical  and life  insurance  for the benefit
of the  Executive  for the  remainder  of the  term of this  Agreement;
(ii) medical  insurance for the benefit of the  Executive's  spouse for
the  remainder  of the  term  of  this  Agreement;  and  (iii)  medical
insurance  for the  benefit of the  Executive's  dependents  during the
term of this  Agreement  until  each  such  dependent  reaches  age 21.
Subject to the  provisions  of the last  sentence of this Section 6(f),
if the Executive's  employment with the Company is terminated  pursuant
to the  provisions of Section  5(b)(iv)  hereof,  the Company shall pay
all  premiums,  with the  beneficiary  of the  policy  making  the same
contributions  as the benefit plan  requires at the time the benefit is
provided,  to maintain  policies of (i) medical and life  insurance for
the  benefit  of the  Executive  until  March  15,  2004  (ii)  medical
insurance  for the benefit of the  Executive's  spouse  until March 15,
2004 and (iii)  medical  insurance  for the benefit of the  Executive's
dependents  until  each  such  dependent  reaches  age 21 or March  15,
2004,  whichever  occurs  first  for  each  dependent.  The  amount  of
medical and life  insurance  coverage  provided to the  Executive,  and
the amount of medical  insurance  coverage  provided to the Executive's
spouse and  dependents  shall be the same as the insurance  coverage in
effect for such  individuals on the Termination  Date. If the Executive
dies  during the term of this  Agreement  and his spouse or  dependents
are still  living,  the  Company  shall  continue  to pay all  premiums
needed to  continue  to  provide  medical  insurance  coverage  for the
Executive's  spouse  for  the  remainder  of the  Executive's  spouse's
life,  or March 15,  2004,  whichever  occurs first and for each of the
Executive's  dependents  until each such  dependent  reaches  age 21 or
March 15, 2004,  whichever  occurs first,  at the same level of medical
insurance  coverage  in effect for such  individuals  prior to the date
of the Executive's  death.  For purposes of this Section 6(f), the term
"dependents"  shall have the same  meaning as  contained in Section 152
of the Code. The level of benefits  provided  hereunder (and the amount
of premiums  required to provide  such  benefits)  shall be adjusted to
reflect similar  benefits  provided from time to time to the Executive,
his spouse or his  dependents  from all other  sources,  including from
other employers.

7.  NON-COMPETITION.  In the  event  that the  Company  terminates  the
Executive's   employment  under  this  Agreement  pursuant  to  Section
5(b)(iii)  hereof  or  in  the  event  the  Executive   terminates  his
employment  pursuant to Section  5(b)(v) hereof,  the Executive  agrees
that  during a period  of two (2) years  after the date of  termination
or September  15, 2004,  whichever  first occurs,  the  Executive  will
not,  directly  or  indirectly,   own,  manage,  operate,   control  or
participate in the ownership,  management,  operation or control of, or
be connected as an officer,  employee,  partner,  director or otherwise
with, or have any  financial  interest in, or aid or assist anyone else
in the  conduct  of, any  business (a  "Competitive  Operation")  which
competes  with  any  business  conducted  by the  Company  or with  any
group,  division or  subsidiary of the Company in any  geographic  area
where  such   business  is  being   conducted   at  the  time  of  such
termination.  It is  understood  and agreed  that,  for the purposes of
the foregoing provisions of this Section 7:

(a) No  business  shall be deemed  to be a  business  conducted  by the
Company or any group,  division or  subsidiary  of the Company,  unless
not  less  than  10% of the  Company's  consolidated  gross  sales  and
operating  revenues,  or net income,  is derived from, or not less than
10%  of  the  Company's   consolidated  assets  are  devoted  to,  such
business;  No  business  conducted  by any  entity  which  employs  the
Executive  or in which he is  interested  or with which he is connected
or associated shall be deemed  competitive with any business  conducted
by the Company or any group,  division,  or  subsidiary  of the Company
unless  such  business  is one from which 10% or more of the  Company's
consolidated assets are devoted; and

(b) No business  which is  conducted  by the Company at the time of the
Executive's   termination   and   which   subsequently   is   sold   or
discontinued  by the  Company  shall,  subsequent  to the  date of such
sale  or  discontinuance,  be  deemed  to  be a  Competitive  Operation
within the meaning of this  Section 7.  Ownership  by the  Executive of
2% or less of the voting stock of any publicly  held Company  shall not
constitute a violation hereof.

8.   ADDITIONAL PAYMENTS
(a)  Anything in this  Agreement to the  contrary  notwithstanding,  in
the event it shall be determined  that any payment or  distribution  by
the  Company  to  or  for  the  benefit  of  the   Executive  has  been
designated  herein as entitled to a Gross-up,  then the Executive shall
be  entitled  to receive an  additional  payment (a  "Gross-up")  in an
amount  such  that  after   payment  by  the  Executive  of  all  taxes
(including  any  interest or  penalties  imposed  with  respect to such
taxes) the  Executive  retains an amount equal to the amounts  entitled
to the Gross-up.

<PAGE>

(b) All  determinations  required  to be made  under  this  Section  8,
including  the  amount  of  such   Gross-up,   shall  be  made  by  any
nationally   recognized  firm  of  certified  public  accountants  (the
"Accounting   Firm")   which   shall   provide   detailed    supporting
calculations  both to the Company and the Executive  within 60 business
days.  When  calculating  the  amount of the  Gross-up,  the  Executive
shall be deemed to pay:

               (i)  Federal  income  taxes  at the  highest  applicable
marginal  rate of Federal  income  taxation  for the  calendar  year in
which the Gross-up is to be made; and

               (ii) any  applicable  state  and local  income  taxes at
the  highest  applicable  marginal  rate of taxation  for the  calendar
year  in  which  the  Gross-up  is to  be  made,  net  of  the  maximum
reduction  in  Federal  income  taxes  which  could  be  obtained  from
deduction of such state and local taxes if paid in such year.

            Any  determination  by the Accounting Firm shall be binding
upon the Company and the Executive.

9.   AMENDMENTS.   This  Agreement  may  not  be  amended  or  modified
orally,  and no  provision  hereof may be  waived,  except in a writing
signed by the parties hereto.

10.  ASSIGNMENT.  This  Agreement  cannot be assigned  by either  party
hereto except with the written consent of the other.

11.  BINDING  EFFECT.  This  Agreement  shall be binding upon and inure
to the  benefit  of the  personal  representatives  and  successors  in
interest  of the  Executive.  In  addition,  this  Agreement  shall  be
binding upon any successor  (whether  direct or indirect,  by purchase,
merger,  amalgamation  or  otherwise)  to all or  substantially  of the
business  and/or assets of the Company.  The Company  expressly  agrees
that it shall  have no right,  power or  authority  to  consummate  any
sale of all or  substantially  all the  business  and/or  assets of the
Company  or  to   consummate   any  merger,   consolidation   or  other
transaction  as  a  result  of  which  all  or  substantially  all  the
business  and/or  assets of the Company are not owned by the Company or
any of its direct or  indirect  wholly  owned  subsidiaries  unless the
party  that  will  own all or  substantially  all the  business  and/or
assets of the Company  following the  consummation of such  transaction
executes  and  delivers  an  agreement   with  the  Company   expressly
providing  for the  assumption  by such  party of all of the  Company's
obligations under this Agreement;  provided that,  notwithstanding  the
foregoing,   no  such   agreement   shall  be  necessary  to  make  the
obligations  of the Company under the terms of this  Agreement  binding
on such successor to the business and/or assets of the Company.

12.  CHOICE OF LAW. This  Agreement  shall be governed and construed in
accordance  with the laws of the  Commonwealth  of Kentucky  applicable
to contracts  made and to be performed  wholly within such slate except
with  respect  to  the   internal   affairs  of  the  Company  and  its
stockholders,   which  shall  be  governed  by  the  Kentucky   General
Corporate Law.

13.  NOTICES.  All notices and other  communications  given pursuant to
this  Agreement  shall  be  deemed  to  have  been  properly  given  or
delivered  if  hand-delivered,  or if  mailed,  by  certified  mail  or
registered mail postage prepaid,  or by recognized  overnight  delivery
service  addressed  to the  Executive at the address set forth above or
if to the  Company,  at the  address set forth above with a copy to the
attention of John M.  Baumann,  Corporate  Counsel,  15415  Shelbyville
Road,  Louisville,  Kentucky 40245. From time to time, either party may
designate  by written  notice any other  address or party to which such
notice or communication or copies thereof shall be sent.

14.  SEVERABILITY  OF  PROVISIONS.  In  case  any  one or  more  of the
provisions  contained in this  Agreement  shall be invalid,  illegal or
unenforceable   in   any   respect,   the   validity,    legality   and
enforceability of the remaining  provisions  contained herein shall not
in any way be  affected or impaired  thereby and this  Agreement  shall
be interpreted as if such invalid,  illegal or unenforceable  provision
was not contained herein.

IN WITNESS  WHEREOF,  the  Executive  and the Company  have caused this
Agreement  to be  executed  effective  as of the day and year set forth
above.

                          STEEL TECHNOLOGIES INC.
                          By:
                          _____________________________
                          Merwin J. Ray,
                          Chairman of the Board
                          On behalf of the Board of Directors
                          of Steel Technologies Inc.

                          _____________________________
                          Ralph W. McIntyre, Director
                          Chairman of the Compensation Committee
                               of the Board of Directors

                          _____________________________
                          Michael J. Carroll, Director
                          President and Chief Operating Officer

                BRADFORD T. RAY (the "Executive")

                          ______________________________
                          Bradford T. Ray