ROHN INDUSTRIES INC, 10-K405, 1999-03-31

ROHN INDUSTRIES INC
10-K405, 1999-03-31
MISCELLANEOUS FABRICATED METAL PRODUCTS

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

----------------

FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 1998

[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the Transition period from to

Commission File No. 1-8009

ROHN Industries, Inc.
(Exact name of registrant as specified in its charter)

DELAWARE 36-3060977
(State of incorporation) (I.R.S. Employer
Identification No.)

6718 West Plank Road, Peoria, Illinois 61604
(Address of principal executive (Zip Code)
office)

Registrant's telephone number including area code: (309) 697-4400

Securities registered pursuant to Section 12(b) of the Act:

<TABLE>
<CAPTION>
Name of each exchange
Title of each class on which registered
------------------- ---------------------
<S> <C>
Common Stock $.01 par value None
</TABLE>

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. Yes X No

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. X

On March 22, 1999, 52,811,009 shares of common stock were outstanding. The
aggregate market value of stock held by nonaffiliates is $50,489,432, based
upon the closing price of such stock on that date.

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PART I

Matters discussed in this report contain forward-looking statements which
reflect management's current judgment. Statements containing words such as
"believes," "expects," "anticipates" or similar expressions are forward-
looking statements. Many factors, some of which are discussed elsewhere in
this document, could affect the future financial results of the Company and
could cause those results to differ materially from those expressed in the
forward-looking statements contained in this document. These factors include
operating, legal and regulatory risks, economic, political and competitive
forces affecting the telecommunications and equipment business, and the risk
that the Company's analyses of these risks and forces could be incorrect or
that the strategies developed to address them could be unsuccessful.

Item 1. Business.

General

Rohn Industries, Inc. ("ROHN" or the "Company") is a leading manufacturer
and installer of wireless infrastructure products for the communications
industry, including cellular, Personal Communications Systems ("PCS"),
Enhanced Specialized Mobile Radio ("ESMR"), paging, radio and television
broadcast, wireless cable, private microwave and other telecommunications
businesses. The Company's principal product lines are tower structures and
equipment enclosures. The Company's growth in recent years has been due in
part to the growth of the cellular phone and other types of wireless
communications systems, and the introduction and growth of its equipment
enclosures product line. The Company began to experience the strong favorable
impact of the build-out of a new wireless communication system in the United
States, the PCS, in the second half of 1996 and the first half of 1997;
however, the buildout of PCS has slowed considerably since the last half of
1997. The Company believes it should benefit from the eventual build-out of
existing cellular and new PCS as well as other wireless systems such as ESMR
and wireless local loop.

The Company's key products consist of self-supporting and guyed (cable-
supported) towers, equipment enclosures, steel and concrete poles, concrete
and fiberglass equipment enclosures, equipment cabinets, antenna mounts and
installation services. The Company also manufactures galvanized steel
agriculture products, including horse stalls, cattle equipment, fencing and
gates.

The Company is a Delaware corporation which changed its name from UNR
Industries, Inc. ("UNR") in December 1997. UNR was organized in 1979 as a
holding company and is now an operating company. During 1996, the Company
completed the sale of four of its five operating divisions. In March 1997, the
Company moved its principal executive offices from Chicago, Illinois to
Peoria, Illinois. The Company maintains its executive offices and main tower
manufacturing facility at 6718 West Plank Road, Peoria, IL 61604.

In 1982, UNR filed a voluntary petition for reorganization under Chapter 11
of the Federal Bankruptcy Code, and, pursuant to a Plan of Reorganization
confirmed by the Bankruptcy Court in 1989 and accepted by the Company's
creditors and stockholders, 42,404,847 shares of common stock of the Company
were issued to the UNR Asbestos-Disease Claims Trust and unsecured creditors
in full discharge of all claims. The Trust currently owns 29,348,051 shares of
common stock of the Company, or approximately 55.5% of the shares currently
outstanding.

Telecommunications Equipment Market

The use of wireless telephones in the United States has shown rapid growth
in recent years, from about five million subscribers in 1990 to over 60
million today. The number of cell sites has risen from about 6,000 in 1990 to
over 55,000 today and is expected to grow to as many as 100,000 by the end of
2002. While co-located and rooftop cell sites will provide as many as 50% of
these sites, the remainder will require a tower or pole and equipment
enclosure. Co-located and rooftop sites will require mounts and equipment
enclosures.

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Competition among wireless carriers is becoming increasingly intense,
lowering the average cost per minute for a wireless call to the range where it
can be an economic alternative to a wireline phone. This economic advantage
may serve to further enhance the growth of wireless subscribers. In addition,
other new technologies such as broadband wireless provide opportunities to
serve the rapid growth of internet services by providing "last mile" links
from fiber-optic hubs to office buildings. New technologies are continually
being introduced to use available wireless spectrum as an economic alternative
to traditional copper wire. These new technologies often require the use of
towers, poles, mounts and equipment enclosures manufactured by the Company.

Broadcast is another market served by the Company. Recent changes in FCC
regulation and the introduction of high definition television should provide
additional opportunities for the Company, as new antenna support structures
may be required to support these new broadcasting technologies.

The Company also plans to continue to develop overseas markets through its
United States customers and through the establishment of joint ventures,
partnerships and facilities in key developing countries. See "--
International."

Products

Tower Structures. The Company manufactures many configurations of towers,
from one that reaches 1,500 feet in the air to a small antenna mount. Its
principal tower product is the tubular self-supporting tower ranging in
heights to 900 feet. The Company's towers are used across the world for
television broadcast, AM/FM radio broadcast, microwave, cellular telephone,
PCS, radar, surveillance camera mounts, solar power stations and weather
stations. Included within the Tower Structures segment of products are steel
and concrete poles, generally used when there is not enough space to erect a
tower, such as an urban area where space is limited, and antenna mounts that
are hot-dipped galvanized to prevent corrosion. Antenna mounts range from non-
penetrating roof mounts that spread the balanced weight over a large area to
mounts that concentrate weight for compact installation. The Company also
provides tower mounts, wall mounts for corners or flat walls, square pole
mounts, and standard roof mounts for flat or sloped roofs. Approximately 63%,
68% and 75% of the Company's revenues were attributable to sales in the Tower
Structures segment for years 1998, 1997 and 1996, respectively.

Enclosures. The proper housing of highly valuable electronic components and
power systems is a major concern for communications companies. The Company's
concrete enclosures are made of lightweight concrete with steel reinforcements
for added strength. The Company's fiberglass enclosures are made of laminated
fiberglass and are lightweight, portable, strong and secure. The Company has
recently developed a non-combustible enclosure for rooftop applications,
manufactured with a steel frame to meet strict fire codes. Equipment cabinets,
made of lightweight concrete or molded fiberglass for water and rust
resistance, are designed as maintenance free structures for compact equipment
installations. The Enclosures segment accounted for approximately 37%, 32% and
25% of the Company's revenues for years 1998, 1997 and 1996, respectively.
Concrete structures represent the largest part of the Company's Enclosures
segment, generating more than 75% of Enclosures segment revenues for years
1998, 1997 and 1996, respectively.

See Note 19 to the Consolidated Financial Statements of the Company in Item
8 for additional financial information.

Patents and Trademarks

The Company has a number of patents and trademarks, none of which are
considered material to its operations.

International

Foreign sales accounted for approximately $12.1 million, $10.2 million and
$8.0 million of the Company's revenues for years 1998, 1997 and 1996,
respectively. The Company has sold towers and other equipment in

3
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more than 55 countries and currently operates a sales office in Mexico City.
In December 1997, the Company and BrasilSat Harald S.A. of Curitiba, Brazil
finalized an agreement to form a corporate joint venture to serve the growing
telecommunications infrastructure industry in Brazil and South America. ROHN
owns 49% of the corporate joint venture. The corporate joint venture began
production of enclosures in late 1998 and is expanding its manufacturing
facilities to produce towers and poles, with a target for completion in 2000.
The corporate joint venture's operations have been adversely affected by the
Brazilian economy in 1998 and early 1999. The Company plans to develop other
foreign markets through its United States customers, who are investing in
telecommunications on a global basis, and through the establishment of
partnerships and facilities in key developing countries.

Customers and Backlog

The Company markets its products worldwide, through a variety of marketing
channels with different customer focuses. Domestically, the Company has 12
direct salespeople.

For international sales efforts, the Company employs two salespeople who
concentrate on Mexico and Latin America. In addition, the Company utilizes two
key distributors and a variety of agents to cover the remainder of the world.

The Company's backlog of firm orders was approximately $29.0 million, $52.4
million and $53.0 million at December 31, 1998, 1997 and 1996, respectively.
In 1998, one customer accounted for approximately 13% of the Company's net
sales.

Competition

The telecommunications infrastructure industry is highly competitive. The
Company faces substantial competition in each of the segments it serves from
established competitors, some of which have greater financial, engineering,
manufacturing, and marketing resources than the Company. The Company's
competitors in each product area can be expected to continue to improve the
design of their products, to introduce new products with competitive prices
and performance characteristics and to improve customer service. Competitive
pressures caused an erosion in operating margins in 1998 and early 1999, and
there can be no assurance that competitive pressures will not necessitate
further price reductions, adversely affecting operating results in the future.
Although the Company believes that it has certain advantages over its
competitors, maintaining such advantages will require a continued high level
of investment by the Company in sales, marketing and other services. There can
be no assurance that the Company will have sufficient resources to continue to
make other such investments or that the Company will be able to maintain the
competitive advantages it currently enjoys.

Raw Materials

The primary raw materials used by the Company to produce its products are
steel, zinc and concrete. All materials are currently readily available in the
marketplace. The Company is not dependent upon any single supplier for any
materials essential to its business or not otherwise commercially available.
The Company has been able to obtain an adequate supply of raw materials and no
shortage of raw materials is currently anticipated. The Company's ability to
continue to acquire steel, zinc and concrete on favorable terms may be
adversely affected by factors beyond its control. Because steel, zinc and
concrete constitute a significant portion of the Company's cost of goods sold,
any increase in price of such materials could have a material adverse impact
on the Company's gross profit margin.

Employees

As of December 31, 1998, the Company employed 785 people. Collective
bargaining agreements cover 371 employees at its facilities in Peoria and
Frankfort. The unions are the United Automobile, Aerospace and Agricultural
Implement Workers of America (UAW) in Peoria and the Retail, Wholesale and
Department Store Union (RWDSU) in Frankfort. The Company considers its
relations with its employees to be good.

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<PAGE>

The Company's success depends to a significant degree upon the continued
contributions of key management, engineering, sales, marketing, customer
support, finance and manufacturing personnel, certain of whom would be
difficult to replace. The loss of the services of certain of these personnel
could have a material adverse effect on the Company. There can be no assurance
that the services of such personnel will continue to be available to the
Company. In addition, the Company believes that its success depends on its
ability to attract and retain additional qualified employees and that the
failure to recruit such other skilled personnel could have a material adverse
effect on the Company.

Environmental Matters

The Company employs some materials in its manufacturing processes,
including oils and solvents that may be regulated by environmental laws. The
Company has made expenditures to comply with environmental laws and
regulations, including investigation and remediation of ground and water
contamination, and expects to make such expenditures in the future to comply
with existing and probable requirements. While such expenditures have not had,
and are not expected to have, a material adverse effect on the Company's
financial condition or results of operations, there can be no assurance that
more stringent regulations or enforcement in the future will not have such
effects.

In some cases, the Company has notified state or federal authorities of a
possible need to remedy sites it previously operated. The Company has also
been notified by various state and federal governmental authorities that they
believe it may be a "potentially responsible party" or otherwise have
responsibility with respect to clean-up obligations at certain hazardous and
other waste disposal sites which were not owned or operated by the Company. In
some such cases, the Company has effected settlements with the relevant
authorities or other parties for immaterial amounts. In other cases, the
Company is participating in negotiations for settlement with the relevant
authorities or other parties or has notified the authorities that it denies
liability for clean-up obligations. At all such sites, costs which may be
incurred are difficult to accurately predict until the level of contamination
is determined. The Company, after consultation with legal counsel and
environmental experts, believes that the ultimate outcome with respect to all
of these sites will not have a material adverse effect on the Company's
financial condition or on its results of operations.

Item 2. Properties.

The Company has 847,000 square feet of manufacturing facilities located in
Peoria, Illinois, Bessemer, Alabama and Frankfort, Indiana, all of which are
owned by the Company. The Company's headquarters are located in Peoria,
Illinois. At this location, the Company manufactures towers and steel poles
and performs all of its in-house hot-dip galvanizing processes. The Company's
facility at Frankfort, Indiana, manufactures towers, mounts and agricultural
products. The Company's modern manufacturing plant in Bessemer, Alabama is
devoted entirely to the production of equipment enclosures and cabinets.

Item 3. Legal Proceedings.

The Company is involved in various pending legal proceedings and claims
arising in the normal course of business, as well as claims arising from the
Company's disposition of certain divisions in 1996. Although the outcome of
such proceedings and claims cannot be determined with certainty, the Company
believes, after consultation with legal counsel, that such proceedings and
claims, individually or in the aggregate, are not material to any of its
business, financial condition, or results of operations. See "Business--
Environmental Matters."

Item 4. Submission of Matters to a Vote of Security Holders.

No matters were submitted to a vote of the Company's security holders
during the fourth quarter of fiscal 1998.

5
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PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.

The Company's common stock is publicly traded in the over-the-counter
market on the Nasdaq National Market System. Its trading symbol is ROHN. The
high and low closing prices on the Nasdaq National Market System, reported by
Dow Jones, were:

<TABLE>
<CAPTION>
Dividends
High Low Per Share
------ ---------- ---------
<S> <C> <C> <C>
1997
First Quarter............................... 8 5 7/8 --
Second Quarter.............................. 7 7/8 5 1/4 --
Third Quarter............................... 6 7/8 4 1/4 --
Fourth Quarter.............................. 6 4/7///16/ .10
1998
First Quarter............................... 6 1/4 4/11///16/ --
Second Quarter.............................. 6 1/4 3 3/4 --
Third Quarter............................... 4 3/4 1 3/4 --
Fourth Quarter.............................. 3 1/2 1/13///16/ --
1999
First Quarter (through March 22)............ 3 9/16 1 7/8 --
</TABLE>

The closing price per share of common stock on the Nasdaq National Market
on March 22, 1999 was $2.1875. As of that date, the Company had 3,244 record
holders of its common stock.

6
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Item 6. Selected Financial Data.

<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
-------- -------- -------- -------- --------
(in thousands, except per share data)
<S> <C> <C> <C> <C> <C>
Five Year Summary of
Operations
Net sales................... $174,153 $158,132 $154,434 $142,216 $107,026
Cost of products sold....... 131,121 111,124 106,847 98,996 73,060
-------- -------- -------- -------- --------
Gross profit................ 43,032 47,008 47,587 43,220 33,966
-------- -------- -------- -------- --------
Operating income............ 24,236 26,459 32,498 29,862 18,580
-------- -------- -------- -------- --------
Interest (expense) income,
net........................ (753) (477) 884 1,839 1,174
Other income................ -- 4,088 -- -- --
-------- -------- -------- -------- --------
Income from continuing
operations before income
taxes...................... 23,483 30,070 33,382 31,701 19,754
Income tax provision........ 8,900 11,151 13,100 12,700 7,900
Equity loss of corporate
joint venture.............. 540 -- -- -- --
-------- -------- -------- -------- --------
Income from continuing
operations................. 14,043 18,919 20,282 19,001 11,854
Discontinued operations--
Income from operations, net
of tax.................... -- -- 3,859 10,275 21,971
Gain (loss) on
dispositions, net of tax.. -- -- 21,900 -- (2,500)
-------- -------- -------- -------- --------
Net Income.................. $ 14,043 $ 18,919 $ 46,041 $ 29,276 $ 31,325
======== ======== ======== ======== ========
Net income per share--basic
Continuing operations....... $ 0.27 $ 0.36 $ 0.39 $ 0.37 $ 0.24
Discontinued operations--
Income from operations..... -- -- 0.08 0.20 0.45
Gain (loss) on
dispositions.............. -- -- 0.42 -- (0.05)
-------- -------- -------- -------- --------
Net income per share--basic. $ 0.27 $ 0.36 $ 0.89 $ 0.57 $ 0.64
======== ======== ======== ======== ========
Net Income per share--
diluted
Continuing operations....... $ 0.27 $ 0.36 $ 0.39 $ 0.37 $ 0.24
Discontinued operations--
Income from operations..... -- -- 0.08 0.20 0.44
Gain (loss) on
dispositions.............. -- -- 0.42 -- (0.05)
-------- -------- -------- -------- --------
Net income per share--
diluted.................... $ 0.27 $ 0.36 $ 0.89 $ 0.57 $ 0.63
======== ======== ======== ======== ========
Dividends declared per
common share............... $ -- $ 0.10 $ 2.60 $ 2.55 $ 0.20
Weighted average common
shares outstanding--Basic.. 52,774 52,475 52,383 51,813 49,318
Weighted average common
shares outstanding--
Diluted.................... 52,779 52,558 52,566 52,056 49,581

Five-Year Summary of
Financial Data
Total assets................ $114,192 $111,072 $ 93,372 $161,226 $258,106
Stockholders' equity........ 72,579 58,042 42,511 127,764 220,596
Dividends declared.......... -- 5,245 136,368 132,274 9,738
Return on assets............ 12.3% 17.0% 49.3% 18.2% 12.1%
Return on stockholders'
equity..................... 19.3% 32.6% 108.3% 22.9% 14.2%
Capital expenditures........ 2,283 8,307 11,658 2,303 3,335
Depreciation and
amortization............... 3,148 2,634 1,672 1,433 1,358
Long-term liabilities....... 12,327 11,271 12,191 4,671 4,867
</TABLE>

Prior year results have been restated to reflect the 1994 discontinuance of
Unarco Material Handling and the 1995 discontinuance of UNR Leavitt, Unarco
Commercial Products, UNR Home Products and Real Time Solutions, Inc.

Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.

Overview

The following discussion summarizes the significant factors affecting the
consolidated operating results and financial condition of the Company and
subsidiaries for the three years ended December 31, 1998. This discussion
should be read in conjunction with the consolidated financial statements and
notes to the consolidated financial statements.

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In 1996, the Company completed the sale of four of its five operating
divisions while maintaining ownership of the ROHN division.

The following table summarizes the four divestitures:

<TABLE>
<CAPTION>
Date Business Purchaser Sales Price
---- -------------------------- ---------------------------- -------------
(in millions)
<S> <C> <C> <C>
July 1996............... Unarco Commercial Products Richards Capital Fund, L.P $41.0
August 1996............. UNR Leavitt Chase Brass Industries, Inc. 95.0
Sept. 1996.............. UNR Home Products Franke, Inc. 21.4
Dec. 1996............... Real Time Solutions, Inc. Pinnacle Automation 4.0
</TABLE>

The sale of these divisions in 1996 resulted in a gain of $21.9 million,
net of $14.6 million of taxes, which was recorded in the third quarter of
1996. The final sales prices of these operations were subject to the normal
closing adjustments. Total sales of these operations were $157 million for the
year ended December 31, 1996.

On December 17, 1997, the stockholders voted to change the name of the
Company from UNR Industries, Inc. to ROHN Industries, Inc.

Results of Operations

The Company is a leading manufacturer and installer of wireless
infrastructure products for the communications industry, including cellular,
Personal Communications Systems ("PCS"), Enhanced Specialized Mobile Radio
("ESMR"), paging, radio and television broadcast, wireless cable, private
microwave and other telecommunications businesses. The Company's principal
product lines are Tower Structures and Enclosures.

The following table sets forth, for the fiscal periods indicated, the
percentage of net sales represented by certain items reflected in the
Company's consolidated statements of income.

<TABLE>
<CAPTION>
1998 1997 1996
For the years ended December 31, ----- ----- -----
<S> <C> <C> <C>
Net sales............................................ 100.0% 100.0% 100.0%
Cost of sales........................................ 75.3 70.3 69.2
----- ----- -----
Gross profit......................................... 24.7 29.7 30.8
Selling, general and administrative expense.......... 10.8 10.8 9.8
Restructuring........................................ -- 2.2 --
----- ----- -----
Total operating expenses............................. 10.8 13.0 9.8
----- ----- -----
Operating income..................................... 13.9 16.7 21.0
Interest expense (income), net....................... .4 .3 (.6)
Other income......................................... -- (2.6) --
----- ----- -----
Income before income taxes........................... 13.5 19.0 21.6
Income tax provision................................. 5.1 7.0 8.5
Equity loss of joint venture......................... .3 -- --
----- ----- -----
Income from continuing operations.................... 8.1% 12.0% 13.1%
===== ===== =====
</TABLE>

1998 Compared to 1997

Net sales for 1998 were $174.2 million compared to $158.1 million in 1997,
an increase of 10.2%. The increases in sales by business segment were as
follows.

<TABLE>
<CAPTION>
Dollar Percentage
1998 1997 Increase Increase
For the years ended December 31, ------ ------ -------- ----------
<S> <C> <C> <C> <C>
Tower Structures....................... $110.1 $107.1 $ 3.0 2.8%
Enclosures............................. 64.1 51.0 13.1 25.7%
------ ------ ----- ----
Total.................................. $174.2 $158.1 $16.1 10.2%
====== ====== ===== ====
</TABLE>

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The increase in sales in the Tower Structures segment was primarily due to
a $1.0 million increase in sales in international markets as well as
recapturing market penetration domestically. The Company believes that the
overall market for its tower products was unchanged from 1997. One of the
Company's principal business objectives in 1998 was to reverse losses in
market share experienced in previous years. The Company's Enclosure segment
benefited from a wider range of applications for these products both within
the communications industry and outside the industry.

In 1998, many of the Company's customers experienced delays and requested
that the Company hold their inventory. In circumstances where the product is
ready for shipment, the customer requests delayed shipment and risk of
ownership has passed to the customer, the Company recognizes revenue for its
Tower Structures segment. Results of operations for the year ended December
31, 1998, include approximately $4.2 million of Tower Structures revenue
related to product that has not shipped, but the earnings process is complete.
No such revenues were recorded in 1996 and 1997, in accordance with generally
accepted accounting principles, as the earnings process had not been
completed.

The Enclosures segment differs from Tower Structures in that enclosures are
generally ordered by the customer in multiple units on a project basis and are
not necessarily site specific. Therefore, the revenue recognition policy for
enclosures also requires that actual payment be received. Results of
operations for the year ended December 31, 1998, include approximately $6.5
million of Enclosures revenues related to product that has not shipped, but
the earnings process is complete. No such revenues were recorded in 1996 and
1997, in accordance with generally accepted accounting principles, as the
earnings process had not been completed.

Gross profit for 1998 was $43.0 million versus $47.0 million in 1997, a
decrease of 8.5%. As a percent to sales, gross profit margin was 24.7% in 1998
versus 29.7% for 1997. The five percentage point decrease was totally
attributable to a significant decrease in gross profit margins for the
Company's tower products. This gross profit margin deterioration was
experienced primarily in the last two quarters of 1998. Significant industry-
wide pricing pressure was experienced as certain competitors lowered prices
and demand remained flat during the year. In addition, the Company experienced
increases in production costs related to annual purchasing commitments for its
primary raw materials such as steel and increased operating costs of its new
galvanizing facility which was brought on-line during the latter half of 1997.
The Company expects that the gross profit margin pressures experienced in 1998
will continue during 1999 as pricing will remain somewhat depressed; however,
the Company also believes that production costs can be lowered during the year
to partially offset the pricing pressures.

Selling, general and administrative ("SG&A") expenses were $18.8 million in
1998 versus $17.1 million in 1997. In comparison to the prior year, SG&A
expenses increased by $1.7 million, an increase of 9.9%. As a percent to
sales, SG&A expenses were 10.8% in both 1998 and 1997. The increase in
operating expenses was primarily attributable to an increase in sales and
marketing costs. The Company has invested in additional sales, project
management and customer service personnel and enhanced sales tools such as
catalogs and trade shows to gain sales momentum in the domestic market place.
Also, the Company has increased its spending to improve its worldwide market
presence.

During the third quarter of 1997, the Company's Board of Directors approved
a special charge of $3.4 million ($2.1 million after tax or $ 0.04 per share)
to cover the costs of a restructuring program. The restructuring charge was
related to cost cutting measures including early retirement costs, other
workforce reductions, and expenses associated with the development and
implementation of this program. The provision for the reduction in workforce
included severance and other benefits for approximately 25 employees, the
majority of whom were based in Peoria, Illinois and Frankfort, Indiana. During
1997, cash expenditures of $1.9 million were charged against the reserve.
Approximately $1.1 million of expenses were charged against the reserve in
1998. The Company expects to spend the remaining $0.4 million of the
restructuring reserve in 1999.

The Company's 1998 effective tax rate was 37.9% versus 37.1% in 1997. This
increase in the effective tax rate was primarily due to the non-recurring
nature of certain adjustments made in 1997. These adjustments were recorded by
the Company when it finalized its 1996 return in late 1997.

9
<PAGE>

The equity loss of corporate joint venture of $.5 million relates to the
Company's share of the start-up losses for ROHN BrasilSat. The Company
accounts for this corporate joint venture under the equity method. The
operations of ROHN BrasilSat started in 1998.

Earnings per share (basic and diluted) were $0.27 in 1998 versus $0.36 in
1997. The decrease of earnings per share was primarily attributable to the
significant decrease in gross profit margin experienced by the Tower
Structures segment in 1998. The 1997 results included the $0.05 per share
favorable impact of the sale of an investment in a non-related business and
the $0.04 per share unfavorable impact of the restructuring charge.

The Company has reduced in size due to the sale of Leavitt Tube, Unarco
Commercial Products, UNR Home Products and Real Time Solutions, Inc. in 1996,
and the closing in 1997 of the Company's former corporate office located in
Chicago, IL. In 1998, the Company implemented a thorough review of its
recorded reserves and discovered that reserves for postretirement benefits
other than pensions had not been properly provided for in accordance with
Statement of Financial Accounting Standards No. 106, "Employers' Accounting
for Postretirement Benefits Other Than Pensions." As of January 1, 1998, the
Company had an unfunded accumulated postretirement benefit obligation of $3.5
million and an unamortized net transition obligation of $1.8 million,
resulting in an accrual requirement of $1.7 million at the beginning of the
year. The Company recorded a charge in 1998 to establish a postretirement
benefit liability of approximately $2.2 million as of December 31, 1998. Also,
in connection with the Company's thorough review of its recorded reserves, it
was determined that there were excess reserves of approximately $2.4 million
related to insurance, accounts receivable and other miscellaneous reserves
that were not material to the prior year consolidated financial statements.
These excess reserves were reversed in 1998. Due to the immateriality of the
postretirement benefit charges to the consolidated financial statements of the
Company from 1993 through 1997, no restatement has been made.

1997 Compared to 1996

Net sales for 1997 were $158.1 million in comparison to $154.4 million in
1996, an increase of 2.4%.

Sales by business segment were as follows:

<TABLE>
<CAPTION>
Dollar Percentage
(Decrease) (Decrease)
1997 1996 Increase Increase
For the years ended December 31, ------ ------ ---------- ----------
<S> <C> <C> <C> <C>
Tower Structures.................... $107.1 $115.4 $(8.3) $(7.2)%
Enclosures.......................... 51.0 39.0 12.0 30.8 %
------ ------ ----- -----
Total............................... $158.1 $154.4 $ 3.7 2.4 %
====== ====== ===== =====
</TABLE>

The increase in sales was in the Enclosures segment as the Company
benefited from a wider range of applications for these products within the
communications industry. At the same time, the sales of towers decreased in
1997 due to a significant slowdown in the buildout of PCS.

Gross profit for 1997 was $47.0 million versus $47.6 million in 1996, a
decrease of 1.3%. As a percentage to sales, gross margin was 29.7% for 1997 in
comparison to 30.8% for 1996. The 1.1 percentage point decrease was primarily
due to a change in sales mix as the Enclosures segment accounted for a higher
percentage of sales in 1997 than the Tower Structures segment. Traditionally,
the Company's tower products have had higher gross margins than its other
primary products, equipment enclosures. The difference in gross margins
between the product lines is due to the higher content in the equipment
enclosures of relatively sophisticated environmental and electrical equipment
which is purchased from third party suppliers. Another factor affecting
product margins was continuing competitive price pressure in the tower market.

Selling, general and administrative expenses were $17.1 million in 1997
versus $15.1 million in 1996. In comparison to the prior year, SG&A expenses
increased by $2.0 million or by 13.2%. The increase in SG&A expenses was
attributable to salaries for the new senior management team during the
Company's transition from

10
<PAGE>

a holding company to a more narrowly focused operating company; the costs
associated with the Company's new enterprise resource planning software
system; and higher operating expenses at the Company's enclosure manufacturing
facility to support the 30.8% increase in sales experienced during 1997.

During the third quarter of 1997, the Company recorded a restructuring
change of $3.4 million related to cost-cutting measures including early
retirement costs, workforce reductions, and expenses associated with the
development and implementation of this program.

Interest income for 1997 was $0.8 million in comparison to $1.9 million in
1996. In 1996, excess cash generated by the sale of certain operating
divisions of the Company was invested before it was subsequently returned to
the stockholders in the form of extraordinary dividends.

Other income for 1997 was $4.1 million ($2.6 million after tax or $0.05 per
share). This income was generated from the sale of an investment in a non-
related business.

The Company's 1997 effective tax rate was 37.1% versus 39.2% in 1996. This
decrease in the effective tax rate was primarily due to adjustments recorded
by the Company when it finalized its 1996 tax return in late 1997. In
addition, the Company implemented a foreign sales corporation in 1997.

Earnings per share (basic and diluted) from continuing operations in 1997
were $0.36 versus $0.39 in 1996. The 1997 results included the $0.05 per share
favorable impact of the sale of an investment in a non-related business and
the $0.04 per share unfavorable impact of the restructuring charge. In
addition, the decrease in earnings per share was attributable to the decrease
in gross profit margin, the increase in SG&A expenses, and the reduction in
interest income.

Liquidity and Capital Resources

The following table sets forth selected information concerning the
Company's financial condition:

<TABLE>
<CAPTION>
December 31, December 31,
1998 1997
(Dollars in Thousands) ------------ ------------
<S> <C> <C>
Cash............................................ $19,690 $ 5,994
Working capital................................. 50,830 36,846
Total debt...................................... 11,270 12,219
Current ratio................................... 2.73:1 1.88:1
</TABLE>

The Company's working capital was $50.8 million at December 31, 1998
compared to $36.8 million at December 31, 1997, an increase of $14.0 million.
This increase in working capital primarily reflected a $12.5 million decrease
in short-terms liabilities. This decrease in liabilities represents a pay off
of certain liabilities associated with either liabilities of discontinued
operations or self-insurance programs. In addition, the Company no longer
regularly issues progress billing invoices, thus lowering the amount of
customer deposits on hand.

At December 31, 1998, the Company had aggregate indebtedness of $11.3
million. The Company's outstanding indebtedness was related to mortgage notes
payable and capital leases.

The Company expects that it will meet its ongoing working capital and
capital expenditure requirements from operating cash flows. In addition, the
Company's strong balance sheet allows it substantial financial flexibility.

Inflation

Inflation has not had a material effect on the Company's business or
results of operation.

11
<PAGE>

Seasonality and Quarterly Results of Operations

The operations of the Company are generally not subject to seasonal
fluctuations. However, in the past, the Company has seen disruptions in its
customer's ability to accept shipments due to unusual and prolonged weather-
related construction delays.

The Company has periodically experienced and expects to continue to
experience significant fluctuations in its quarterly results. It is believed
that this quarterly fluctuation is due to the capital budgeting cycle of many
of its customers who often purchase a disproportionately higher share of the
Company's products at the end of the calendar year. It is expected that
fluctuations in quarterly results could become more significant in the future
as customers move to a more centralized purchasing environment and as the
consolidation of wireless communication service providers and build to suit
customers continue.

Recent Accounting Pronouncements

In June 1998, Statement of Financial Accounting Standards No. 133,
"Accounting for Derivative Instruments and Hedging Activities," was issued.
This standard is effective for fiscal years beginning after June 15, 1999, and
establishes accounting and reporting standards for derivative instruments and
hedging activities. It requires that an entity recognize all derivatives as
either assets or liabilities in the balance sheet and measure those
instruments at fair value. Changes in the fair value of derivatives are
recorded in earnings or other comprehensive income, based on whether the
instrument is designated as part of a hedge transaction. It is not expected,
however, that adoption of this statement will have a material effect on the
Company's results of operations, financial condition or cash flows. The
Company typically does not participate in these types of transactions in the
normal course of business.

Year 2000 Compliance

Historically, certain computer programs were written using two digits
rather than four to define the applicable year. Accordingly, the Company's
software may recognize a date using "00" as the year 1900 rather than the year
2000, which could result in computer system failures or miscalculations,
commonly referred to as the Year 2000 ("Y2K") issue. The Y2K issue can arise
at any point in the Company's supply, manufacturing, processing, distribution
and financial chains. Incomplete or untimely resolution of the Y2K issue by
the Company, key suppliers, customers and other parties could have a material
adverse effect on the Company's results of operations, financial condition and
cash flows.

The Company's plan for addressing the Y2K issue is divided into three major
phases: Business Systems Inventory and Assessment, Remediation and
Replacement, and Testing.

Business Systems Inventory and Assessment--The internal inventory portion
of this phase, completed in 1997, was designed to identify internal business
systems that were susceptible to system failure or processing errors as a
result of the Y2K issue. In addition, the Company is in the process of
completing the inventory and assessment of its non-information technology
systems (Non-IT). The remediation and replacement of these systems, which
include manufacturing production lines and equipment, heating, ventilation and
air conditioning systems and water treatment systems, are included in the
remediation and replacement plan discussed below. As part of this phase,
significant service providers, vendors, suppliers, customers and governmental
entities that are believed to be critical to business operations after January
1, 2000, are being identified and steps undertaken to ascertain their stage of
Y2K readiness through questionnaires, interviews, and other available means.

Remediation and Replacement--The Company has developed and is in the
process of implementing its remediation and replacement plan for all non-
compliant systems, including IT and Non-IT systems. This phase is
approximately 75% complete. The Company's plan established priorities for
remediation or replacement. The business systems considered most critical to
ongoing operations were given the highest priority. The Company has
prioritized its business systems into "Mission Critical" and "All Other."
"Mission Critical" systems are defined as business systems such as Business
Planning and Control Process manufacturing, Sales Order Billing and Inventory
Control systems, that, if shut down or interrupted, could have a material
adverse effect on the

12
<PAGE>

Company's results of operations, financial condition and cash flows. "All
Other" systems are defined as business systems such as Job Bidding systems
that, if shut down or interrupted, may have an adverse impact on the Company.
The Company is utilizing internal and external resources to execute the plan
and has substantially completed all remediation and replacement of "Mission
Critical" systems and expects to complete "All Other" systems by the beginning
of the fourth quarter of 1999. The Company is on schedule to meet these
objectives.

Testing--This phase is ongoing as systems are remediated and replaced. The
Company's efforts in this phase include testing by users and determination by
appropriate local and Y2K project management that the remediated or replaced
systems are Y2K compliant. The Company expects to substantially complete
testing of "Mission Critical" systems by third quarter 1999 and "All Other"
systems during the fourth quarter of 1999.

Because the Company's Y2K compliance is dependent upon key third parties
also being Y2K compliant on a timely basis, there can be no guarantee that the
Company's efforts will prevent a material adverse impact on its results of
operations, financial condition and cash flows. The possible consequences to
the Company or its business partners not being fully Y2K compliant include
temporary plant closings, delays in the delivery of finished products, delays
in the receipt of key raw materials and supplies, invoice and collection
errors, and inventory and supply obsolescence. These consequences could have a
material adverse impact on the Company's results of operations, financial
condition and cash flows if the Company is unable to conduct its business in
the ordinary course. The Company believes that its readiness program,
including the contingency plans discussed below, should significantly reduce
the adverse effect any such disruptions may have.

The Company is developing contingency plans to mitigate the potential
disruptions that may result from the Y2K issue. These plans may include
identifying and securing alternate suppliers of key raw materials, stockpiling
of finished component inventories and other measures considered appropriate by
management. Once developed and approved, contingency plans, and the related
cost estimates, will be continually refined, as additional information becomes
available.

The Company currently estimates that the aggregate cost of its Y2K efforts
will be approximately $4.7 million, of which $4.6 million has been incurred to
date. Approximately $4.5 million of these costs related to the acquisition of
new computer systems which have been capitalized, with the remainder being
funded through operating cash flows. The Company expects to incur Y2K costs of
approximately $ 0.1 million in 1999.

Environmental Matters

13
<PAGE>

Recent Developments

On December 22, 1998, the Company and PiRod Holdings, Inc. ("PiRod"), a
privately held company headquartered in Plymouth, Indiana, signed a merger
agreement (the "Merger Agreement") that provided that PiRod would be merged
with the Company and up to 52.5 percent of the outstanding shares of Company
common stock would be converted into the right to receive $3.78 per share in
cash. PiRod shares would be converted into a total of approximately 7.9
million shares of Company common stock.

On March 31, 1999, the Company announced that the continued slowdown in the
buildout of wireless telephone systems affected the results of operations of
both companies and the amount of financing available for the proposed
transaction. As a result, the parties have mutually agreed to terminate the
Merger Agreement.

The Company incurred approximately $1.1 million, net of tax effect, in fees
and expenses in connection with the proposed merger. These expenses would have
been capitalized in the transaction, but the Company will now be required to
recognize them as expenses in the first quarter, resulting in an adverse
impact on earnings of approximately $0.02 per share.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

The Company has very limited exposure to market rate sensitivity and any
adverse impacts realized would not be material to its financial results. The
principal market risks to which the Company is currently exposed to or may be
exposed to during 1999 or beyond are changes in interest rates and foreign
currency exchange rates.

The Company currently manages its exposure to changes in interest rates by
utilizing primarily all fixed rate debt. In the future, it is expected that if
additional debt is incurred, the Company would manage its exposure to changes
in interest rates by optimizing the use of variable-rate and fixed-rate debt
and by utilizing interest rate swaps. International operations, which
accounted for less than 10% of 1998 net sales, are concentrated principally in
Mexico and Brazil. In the future, it is expected that if significant growth is
incurred in international operations, the Company would manage its exposure to
changes by borrowing in foreign currencies and by utilizing either cross-
currency swaps or forward contracts. Such swaps or forward contracts would be
entered into for periods consistent with related underlying exposures and
would not constitute positions independent of those exposures. The Company
would not enter into contracts for speculative purposes.

14
<PAGE>

Item 8. Financial Statements and Supplementary Data.

ROHN INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
- ------------------------------------------------------------------------------
<CAPTION>
Years ended December 31, 1998 1997 1996
- ------------------------------------------------------------------------------
(in thousands except for per share data)
<S> <C> <C> <C>
Net sales $174,153 $158,132 $154,434
Cost of products sold 131,121 111,124 106,847
- ------------------------------------------------------------------------------
Gross profit 43,032 47,008 47,587
Operating expenses:
Selling expense 8,600 6,607 5,986
General and administrative 10,196 10,522 9,103
Restructuring -- 3,420 --
- ------------------------------------------------------------------------------
Operating income 24,236 26,459 32,498
Interest income 292 822 1,864
Interest expense (1,045) (1,299) (980)
Other income -- 4,088 --
- ------------------------------------------------------------------------------
Income from continuing operations before income
taxes 23,483 30,070 33,382
Income tax provision 8,900 11,151 13,100
Equity loss of corporate joint venture 540 -- --
- ------------------------------------------------------------------------------
Income from continuing operations 14,043 18,919 20,282
Discontinued operations:
Income from operations, net of ($2,400) in
taxes in 1996 -- -- 3,859
Gain on sales, net of $14,600 in taxes in 1996 -- -- 21,900
- ------------------------------------------------------------------------------
Net income $ 14,043 $ 18,919 $ 46,041
- ------------------------------------------------------------------------------
Earnings per share--basic and diluted
Continuing operations $ 0.27 $ 0.36 $ 0.39
Discontinued operations--
Income from operations -- -- 0.08
Gain on sales -- -- 0.42
- ------------------------------------------------------------------------------
Earnings per share--basic and diluted $ 0.27 $ 0.36 $ 0.89
- ------------------------------------------------------------------------------
Weighted average shares outstanding--basic 52,774 52,475 52,383
Weighted average shares outstanding--diluted 52,779 52,558 52,566
</TABLE>

The accompanying notes are an integral part of these statements

15
<PAGE>

ROHN INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

<TABLE>
- -------------------------------------------------------------------------------
<CAPTION>
December 31, 1998 1997
- -------------------------------------------------------------------------------
(in thousands, except per share data)
<S> <C> <C>
Assets
Current Assets:
Cash and cash equivalents $ 19,690 $ 5,994
Accounts, notes and other receivables, less allowance for
doubtful accounts of $1,200 in 1998 and $1,451 in 1997 28,588 33,748
Inventories 27,444 33,744
Deferred income taxes 2,600 4,450
Prepaid expenses 1,794 669
- -------------------------------------------------------------------------------
Total Current Assets 80,116 78,605
Fixed assets, net 26,630 27,495
Other Assets 5,277 2,558
Long-term assets of discontinued operations 2,169 2,414
- -------------------------------------------------------------------------------
Total Assets $114,192 $111,072
- -------------------------------------------------------------------------------
Liabilities and Stockholders' Equity
Current Liabilities:
Current portion of long-term liabilities $ 1,017 $ 948
Accounts payable 11,331 12,029
Accrued liabilities & other 14,846 19,199
Customer deposits 940 6,327
Net liabilities of discontinued operations 1,152 3,256
- -------------------------------------------------------------------------------
Total Current Liabilities 29,286 41,759
Long-Term debt 10,253 11,271
Nonpension post retirement benefits 2,074 --
- -------------------------------------------------------------------------------
Total Liabilities 41,613 53,030
- -------------------------------------------------------------------------------
Stockholders' Equity:
Common stock, $0.01 par value, authorized--60,000 shares,
issued--52,816 in 1998 and 52,571 in 1997 535 532
Capital surplus 13,024 11,602
Retained earnings 64,503 50,460
Less--635 in 1998 and 1997 treasury shares, at cost (3,896) (3,896)
--Unearned portion of restricted stock (1,587) (656)
- -------------------------------------------------------------------------------
Total Stockholders' Equity 72,579 58,042
- -------------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity $114,192 $111,072
- -------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of these statements

16
<PAGE>

ROHN INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

<TABLE>
- -------------------------------------------------------------------------------------
<CAPTION>
Common Stock Treasury Stock
-------------- --------------
Shares Capital Retained Restricted N/R From
Issued Amount Surplus Earnings Shares Amount Stock Officers
- -------------------------------------------------------------------------------------
(in thousands,
except per share
data)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance,
December 31,
1995 52,495 $525 $ 66,898 $ 67,843 (326) $(1,595) $ (382) $(5,525)
Net Income -- -- -- 46,041 -- -- -- --
Issuance of
restricted
stock 90 1 876 -- -- -- (877) --
Restricted
stock
canceled (13) -- (114) -- -- -- 114 --
Amortization
of
restricted
shares -- -- -- -- -- -- 400 --
Repayment of
officers'
loans -- -- -- -- -- -- -- 3,225
Cash
dividends--
$2.60 per
share -- -- (59,270) (77,098) -- -- -- --
Stock
options
exercised 245 2 804 -- -- -- -- --
Stock
options tax
benefit -- -- 458 -- -- -- -- --
Director's
stock plan 21 -- 185 -- -- -- -- --
- -------------------------------------------------------------------------------------
Balance,
December 31,
1996 52,838 $528 $ 9,837 $ 36,786 (326) $(1,595) $ (745) $(2,300)
Net income -- -- -- 18,919 -- -- -- --
Issuance of
restricted
stock 150 2 1,123 -- -- -- (1,125) --
Restricted
stock
canceled (10) -- (61) -- -- -- 61 --
Amortization
of
restricted
shares -- -- -- -- -- -- 1,153 --
Repayment of
officers'
loans -- -- -- -- (309) (2,301) -- 2,300
Cash
dividends--
$0.10 per
share -- -- -- (5,245) -- -- -- --
Director's
stock plan 28 -- 140 -- -- -- -- --
Stock
options
exercised 200 2 165 -- -- -- -- --
Stock
options tax
benefit -- -- 398 -- -- -- -- --
- -------------------------------------------------------------------------------------
Balance,
December 31,
1997 53,206 $532 $ 11,602 $ 50,460 (635) $(3,896) $(656) $ --
Net income -- -- -- 14,043 -- -- -- --
Issuance of
restricted
stock 280 3 1,597 -- -- -- (1,600) --
Restricted
stock
canceled (30) -- (175) -- -- -- 143 --
Amortization
of
restricted
shares -- -- -- -- -- -- 526 --
- -------------------------------------------------------------------------------------
Balance,
December 31,
1998 53,456 $535 $ 13,024 $ 64,503 (635) $(3,896) $(1,587) $ --
- -------------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of these statements

17
<PAGE>

ROHN INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
- ---------------------------------------------------------------------------
<CAPTION>
Years Ended December 31, 1998 1997 1996
- ---------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net Income $14,043 $18,919 $ 46,041
Adjustments to reconcile net income to net
cash provided by (used in) operating
activities--
Depreciation and amortization 3,148 2,634 1,672
Provision for deferred employee compensation -- -- 261
Deferred income tax 1,850 (450) 1,270
Discontinued operations (gain) loss -- -- (21,900)
Operating requirements--
Accounts receivable decrease (increase) 5,160 (5,700) (10,584)
Inventory decrease (increase) 6,300 (3,027) (3,168)
Prepaid expenses (increase) decrease (1,125) 424 (105)
Accounts payable and accrued expense
(decrease) increase (8,364) 11,081 (3,990)
Discontinued operations (2,104) (8,523) (26,329)
Investment in non-related business (gain)
loss -- (4,088) --
- ---------------------------------------------------------------------------
Net Cash provided by (used in) operating
activities: $18,908 $11,270 $ (16,832)
- ---------------------------------------------------------------------------
Cash Flow from Investing Activities:
Purchase of plant and equipment, net of
dispositions and retirements $(2,283) $(8,307) $ (11,658)
Decrease (increase) in other assets 950 104 (2,093)
Proceeds from discontinued operations 245 -- --
Proceeds from the sale of discontinued
operations -- -- 157,669
Investment in equity of joint venture (3,669) -- --
Proceeds from the sale of an investment in
non-related business -- 4,088 --
- ---------------------------------------------------------------------------
Net Cash (used in) provided by financing
activities $(4,757) $(4,115) $ 143,918
- ---------------------------------------------------------------------------
Cash Flows from Financing Activities:
Proceeds from long-term debt $ -- $ -- $ 8,418
Payment of long-term debt (949) (803) (257)
Proceeds from short-term borrowings -- 5,150 6,000
Payment of short-term borrowings -- (7,150) (10,000)
Dividends paid -- (5,245) (136,368)
Repayment of officers' loans -- 2,300 3,225
Common stock issued 494 1,858 1,048
Treasury stock purchases -- (2,301) --
- ---------------------------------------------------------------------------
Net cash (used in) financing activities $ (455) $(6,191) $(127,934)
- ---------------------------------------------------------------------------
Net increase (decrease) in cash and cash
equivalents $13,696 $ 964 $ (848)
Cash and cash equivalents at beginning of
period 5,994 5,030 5,878
- ---------------------------------------------------------------------------
Cash and cash equivalents at end of period $19,690 $ 5,994 $ 5,030
- ---------------------------------------------------------------------------
Supplemental disclosures of cash flow
information:
Cash paid during the year for:
Interest $ 1,045 $ 1,299 $ 980
Income taxes $ 5,814 $ 5,143 $ 21,072
Supplemental schedule of noncash investing
activities:
Equipment acquired through capital leases $ -- $ -- $ 2,348
</TABLE>

The accompanying notes are an integral part of these statements

18
<PAGE>

ROHN INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Nature of Operations

ROHN Industries, Inc. and subsidiaries ("ROHN" or the "Company")
manufactures and installs towers, poles, mounts and related accessories used
principally to support telecommunications antennae for wireless
communications, such as cellular telephone, personal communications systems
("PCS"), private microwave, commercial and amateur broadcasting and home
television. The Company also produces equipment enclosures and cabinets of
concrete and fiberglass to house electronic telecommunications equipment. The
Company has manufacturing facilities in Peoria, Illinois (towers and poles),
Bessemer, Alabama (equipment enclosures), Frankfort, Indiana (towers, tower
components and mounts), and Curitiba, Brazil (equipment enclosures). The
Company's products are sold direct to customers throughout the United States
and through distributors to international markets.

2. Summary of Significant Accounting Policies

The significant accounting policies followed by the Company are described
below:

Principles of Consolidation

The financial statements include the consolidated accounts of the Company
and its subsidiaries. All significant intercompany transactions have been
eliminated in consolidation. The Company accounts for its 49% interest in ROHN
BrasilSat, a corporate joint venture in Brazil, under the equity method.

Revenue Recognition

The Company's products have been manufactured according to stringent
customer specifications and engineering design, and are available for
immediate delivery according to the schedule requested by the customer.

Revenue is generally recognized when product is shipped. In 1998, many of
the Company's customers experienced delays and requested that the Company hold
their inventory. In circumstances where the product is ready for shipment, the
customer requests delayed shipment and risk of ownership has passed to the
customer, the Company recognizes revenue for its Tower Structures segment.
Results of operations for the year ended December 31, 1998, include
approximately $4.2 million of Tower Structures revenue related to product that
has not shipped, but the earnings process is complete. No such revenues were
recorded in 1996 and 1997, in accordance with generally accepted accounting
principles, as the earnings process had not been completed.

Cash Equivalents

The Company considers all highly liquid short-term investments purchased
with a maturity of three months or less and all treasury bills to be cash
equivalents. Cash equivalents are carried at cost which approximates market
value.

Inventories

Inventories are stated at the lower of cost or market. Cost is determined
using the first-in, first-out (FIFO) method. Inventory costs include material,
labor and factory overhead. Obsolete or unsalable inventories are reflected at
their estimated realizable values.

19
<PAGE>

ROHN INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Total inventories in 1998 and 1997 included the following classifications
(in thousands):

<TABLE>
<CAPTION>
1998 1997
------- -------
<S> <C> <C>
Finished goods............................................ $14,514 $12,181
Work-in-progress.......................................... 4,650 7,060
Raw materials............................................. 8,280 14,503
------- -------
Total Inventories......................................... $27,444 $33,744
======= =======
</TABLE>

Plant and Equipment

Land, buildings and equipment are carried at cost. Expenditures for
maintenance and repairs are charged directly against income and major
renewals/betterments are capitalized. When properties are retired or otherwise
disposed of, the original cost and accumulated depreciation are removed from
the respective accounts and the profit or loss resulting from the disposal is
reflected in income.

The Company provides for depreciation of plant and equipment over the
estimated useful lives of the assets (buildings--20 to 40 years; machinery and
equipment--3 to 15 years). Depreciation is generally provided on the straight-
line method for financial reporting purposes and on accelerated methods for
tax purposes.

Income Taxes

Under Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes" (SFAS 109), the Company recognizes deferred tax liabilities and
assets for the expected future tax consequences of events that have been
recognized in the Company's financial statements or tax returns.

Total income tax expense for the years ended December 31, 1998, 1997, and
1996, was allocated as follows (in thousands):

<TABLE>
<CAPTION>
1998 1997 1996
------ ------- -------
<S> <C> <C> <C>
Income from continuing operations.............. $8,900 $11,151 $13,100
Discontinued operations........................ -- -- 12,200
Stockholders' equity, for compensation expense
for tax purposes in excess of amounts
recognized for financial reporting purposes... 71 (398) (458)
------ ------- -------
$8,971 $10,753 $24,842
====== ======= =======
</TABLE>

Income tax expense attributable to income from continuing operations
consists of current provisions of $7.1 million, $11.7 million, and $17.0
million and deferred provisions of $1.8 million, $(0.5) million, and $(3.9)
million for the years ended December 31, 1998, 1997, and 1996, respectively.

Income tax expense attributable to income from continuing operations was
$8.9 million, $11.2 million, and $13.1 million, for the years ended December
31, 1998, 1997, and 1996, respectively, and differed from the U.S. Federal
statutory income tax rate as follows (in thousands):

<TABLE>
<CAPTION>
1998 1997 1996
----------- ------------ -----------
Amount % Amount % Amount %
------ --- ------- --- ------- ---
<S> <C> <C> <C> <C> <C> <C>
Computed statutory provision............... $8,200 35 $10,500 35 $11,700 35
State taxes, net of federal effect......... 900 4 1,200 4 1,400 4
Other, net................................. (200) (1) (549) (2) -- --
------ --- ------- --- ------- ---
Total provision............................ $8,900 38 $11,151 37 $13,100 39
====== === ======= === ======= ===
</TABLE>

20
<PAGE>

ROHN INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at December
31, 1998 and 1997 are as follows (in thousands):

<TABLE>
<CAPTION>
1998 1997
------ ------
<S> <C> <C>
Postretirement benefits other than pensions............... $ 880 $ --
Depreciation.............................................. (836) (642)
Accrued insurance reserves................................ 630 1,752
Other, net................................................ 1,926 3,340
------ ------
Net deferred tax assets................................... $2,600 $4,450
====== ======
</TABLE>

The Company's remaining NOL carryforwards, general business credit
carryforwards, and AMT credit carryforwards were fully utilized in 1996.

Net Income per Share

Basic earnings per share were computed by dividing net income by the
weighted average number of shares outstanding during the year. Diluted
earnings per share were calculated by including the effect of all dilutive
securities. For the years ended December 31, 1998, 1997 and 1996, the effect
of potentially dilutive stock options was 5,449, 83,000 and 183,000,
respectively. The Company had additional outstanding stock options of
1,020,000 as of December 31, 1998, which were not included in the computation
of diluted earnings per share because the options' exercise prices were
greater than the average market price of the common shares.

In 1997, the Company adopted Statement of Financial Accounting Standards
("SFAS") No. 128, "Earnings per Share," effective December 15, 1997. The
effect of this accounting change had no impact on the Company's previously
reported earnings per share amounts.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial
statements as well as the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Reclassifications

Certain prior year amounts have been reclassified to conform with the
current year presentation.

New Accounting Standards

In 1998, the Company adopted SFAS No. 130, "Reporting Comprehensive
Income," SFAS No. 131, "Disclosures about Segments of an Enterprise and
Related Information," and SFAS No. 132, "Employers' Disclosures About Pensions
and Other Postretirement Benefits." These statements, which are effective for
fiscal years beginning after December 15, 1997, expand or modify disclosures
and have no material impact on the Company's results of operations, financial
condition or cash flows.

SFAS No. 130 established standards for reporting and display of
comprehensive income, its components and accumulated balances. Comprehensive
income is defined to include all changes in equity except those resulting from
investments by owners and distributions to owners. Among other disclosures,
SFAS No. 130

21
<PAGE>

ROHN INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

requires that all items that are required to be recognized under current
accounting standards as components of comprehensive income be reported in a
financial statement that is displayed in the same prominence as other
financial statements. The Company has no differences between reported net
income and comprehensive income.

SFAS No. 131 establishes standards for the way that public enterprises
report information about operating segments in annual financial statements and
requires reporting of selected information about operating segments in interim
financial statements issued to the public. It also establishes standards for
disclosures regarding products and services, geographic areas, and major
customers. SFAS No. 131 defines operating segments as components of an
enterprise about which separate financial information is available that is
evaluated regularly by the chief operating decision maker in deciding how to
allocate resources and in assessing performance.

SFAS No. 132 changes certain disclosure requirements for pensions and other
postretirement benefits.

3. Prepaid Expenses

Prepaid expenses at December 31, 1998 and 1997 consist of the following:

<TABLE>
<CAPTION>
1998 1997
------ -----
<S> <C> <C>
Catalogues, trade shows and sales promotion................. $ 243 $ 126
Insurance................................................... 167 283
Tax deposits................................................ 294 79
Computer and software maintenance........................... 43 155
Merger and share repurchase related......................... 1,017 --
Other....................................................... 30 26
------ -----
$1,794 $ 669
====== =====
</TABLE>

4. Fixed Assets

Fixed assets at December 31, 1998 and 1997 consist of the following:

<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
Land.................................................. $ 1,168 $ 1,804
Buildings............................................. 20,749 20,623
Machinery and equipment............................... 26,107 24,169
-------- --------
48,024 46,596
Less accumulated depreciation......................... (21,394) (19,101)
-------- --------
$26,630 $ 27,495
======== ========
</TABLE>

5. Other Assets

Other assets at December 31, 1998 and 1997 consist of the following:

<TABLE>
<CAPTION>
1998 1997
------ ------
<S> <C> <C>
Equity investment in Brazil................................. $3,129 --
Computer system conversion costs............................ 1,468 1,270
Funds held by trustee--Frankfort, IN Construction Fund...... 260 246
Note receivable............................................. 126 148
Other....................................................... 294 894
------ ------
$5,277 $2,558
====== ======
</TABLE>

22
<PAGE>

ROHN INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

6. Accrued Liabilities and Other

Accrued and other liabilities at December 31, 1998 and 1997 consist of the
following:

<TABLE>
<CAPTION>
1998 1997
------- -------
<S> <C> <C>
Payroll related........................................... $ 3,250 $ 4,721
Insurance related......................................... 2,183 4,427
Income taxes.............................................. 6,782 5,709
Other..................................................... 2,631 4,342
------- -------
$14,846 $19,199
======= =======
</TABLE>

7. Pension, Profit Sharing and Postretirement Benefits

General

The Company and its subsidiaries have defined benefit and/or defined
contribution retirement plans covering substantially all of their employees.
Included in these plans are certain union sponsored plans to which the Company
makes annual contributions equal to the amounts accrued. The total pension
expense for union sponsored plans for 1998, 1997, and 1996, was $856,000,
$740,000, and $720,000, respectively. The Company has one trustee-administered
profit sharing plan covering all eligible employees in its Enclosures segment,
located in Bessemer, Alabama. Discretionary contributions of $165,000,
$240,000, and $218,000, were charged to expense in 1998, 1997, and 1996,
respectively. Total pension expense for Company-sponsored plans for 1998,
1997, and 1996 was $20,000, $300,000, and $130,000, respectively.

Pension Plan

The Company's non-union employees of its Tower Structures segment with
locations in Peoria, Illinois and Frankfort, Indiana, are covered by a
noncontributory defined benefit pension plan. Plan benefits are generally
based on years of service and employees' compensation during the last years of
employment. Benefits are paid from funds previously provided to trustees.
Actuarial assumptions and provisions are reviewed regularly by the Company and
its independent actuary to ensure that plan assets will be adequate to provide
pension benefits. Plan assets consist primarily of investments in equities,
fixed income securities and money market funds.

Pension expense includes the following components (in thousands):

<TABLE>
<CAPTION>
1998 1997 1996
----- ----- -----
<S> <C> <C> <C>
Service cost--benefits earned during the period...... $ 228 $ 322 $ 237
Interest on projected benefit obligations............ 457 522 415
Expected return on plan assets....................... (678) (560) (538)
Net amortization and deferral........................ 13 16 16
----- ----- -----
Net pension expense................................ $ 20 $ 300 $ 130
===== ===== =====
</TABLE>

23
<PAGE>

ROHN INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

The status of the plans at the respective year ends was as follows (in
thousands):

<TABLE>
<CAPTION>
1998 1997 1996
------ ------ ------
<S> <C> <C> <C>
Fair market value of plan assets.................... $9,114 $8,473 $6,888
====== ====== ======
</TABLE>

The funded status of the plan was as follows:

<TABLE>
<S> <C> <C> <C>
Accumulated benefit obligation.................... 8,086 6,899 4,894
Effect of projected future salary increases....... 1,200 1,079 1,633
------ ------ ------
Projected benefit obligation...................... $9,286 $7,978 $6,527
====== ====== ======
Excess (Deficit) of plan assets over projected
benefit obligations.............................. $ (172) $ 495 $ 361
Unrecognized net transitional asset............... 25 31 40
Unrecognized market (gain) loss................... 295 (323) 350
Unrecognized prior service costs.................. 50 57 67
------ ------ ------
Prepaid pension asset............................. $ 198 $ 260 $ 818
====== ====== ======
</TABLE>

The expected long-term rate of return on plan assets was 9.0% for 1998 and
8.0% for 1997 and 1996. The weighted average discount rate and rate of
increase in future compensation levels used in determining the actuarial
present value of accumulated benefit obligations were 7% and 3%, respectively,
in 1998 and 8.0% and 4.0%, respectively, in 1997 and 1996.

Retirement Plan

The Company has a 401(k) Tax Deferred Savings Plan for the benefit of non-
union employees. After one year of continuous service, the Company matches 25%
of employee contributions up to 12% of an employee's compensation and subject
to the limits allowed by the Internal Revenue Service. The matching
contribution made by the Company was $176,000 in 1998, $173,000 in 1997 and
$163,000 in 1996.

Retiree Benefits

The Company provides postretirement healthcare benefits to both the union
and non-union employees located in Peoria, Illinois. Employees who retire from
the Company after reaching the age of 65 are eligible to participate in the
postretirement healthcare plan.

Postretirement benefit expense included the following:

<TABLE>
<CAPTION>
1998
-------
<S> <C>
Benefits earned during the year.................................. $ 149
Interest cost.................................................... 244
Amortization of transition obligation............................ 121
-------
Postretirement benefit expense................................... $ 514
=======
Actuarial present value of benefit obligation:
Retirees......................................................... $ 1,604
Fully eligible active plan participants.......................... 67
Other active plan participants................................... 2,142
-------
Accumulated benefit obligation................................... $ 3,813
Unamortized net transition obligation............................ (1,697)
Unrecognized prior service cost.................................. --
Unrecognized net gain............................................ --
-------
Accrued postretirement benefit liability......................... $ 2,116
=======
</TABLE>

24
<PAGE>

ROHN INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

The discount rate used to determine the accumulated postretirement
healthcare benefit obligation was 7% in 1998. The assumed healthcare cost
trend rate used to measure the accumulated postretirement benefit obligation
was 10.0%, declining to 8% over a period of 9 years and continuing at 5.0%
thereafter. A one percentage point increase in the assumed healthcare cost
trend would have increased the 1998 accumulated postretirement benefit
obligation by $590,000 and postretirement benefit expense by $68,000. A one
percentage point decrease in the assumed healthcare cost trend would have
reduced the 1998 accumulated postretirement benefit obligation by $527,000 and
postretirement benefit expense by $62,000.

The current portion of non-pension postretirement healthcare benefits
included in accrued liabilities was $126,000 at December 31, 1998.

The Company has reduced in size due to the sale of Leavitt Tube, Unarco
Commercial Products, UNR Home Products and Real Time Solutions, Inc. in 1996,
and the closing in 1997 of the Company's former corporate office located in
Chicago, Illinois. In 1998, the Company implemented a thorough review of its
recorded reserves and discovered that reserves for postretirement benefits
other than pensions had not been properly provided for in accordance with
Statement of Financial Accounting Standards No. 106, "Employers' Accounting
for Postretirement Benefits Other Than Pensions." As of January 1, 1998, the
Company had an unfunded accumulated postretirement benefit obligation of $3.5
million and an unamortized net transition obligation of $1.8 million,
resulting in an accrual requirement of $1.7 million at the beginning of the
year. The Company recorded a charge in 1998 to establish a postretirement
benefit liability of approximately $2.2 million as of December 31, 1998. Also,
in connection with the Company's thorough review of its recorded reserves, it
was determined that there were excess reserves of approximately $2.4 million
related to insurance, accounts receivable and other miscellaneous reserves
that were not material to the prior year consolidated financial statements.
These excess reserves were reversed in 1998. Due to the immateriality of the
postretirement benefit charges to the consolidated financial statements of the
Company from 1993 through 1997, no restatement has been made.

8. Discontinued Operations

In 1996, the Company completed the sale of four of its five operating
divisions while maintaining ownership of ROHN. The following table summarizes
the four divestitures:

<TABLE>
<CAPTION>
($ in millions)
Date of Sale Business Purchaser Sales Price
- ------------ -------- --------- ---------------
<S> <C> <C> <C>
July 1996............... Unarco Commercial Products Richards Capital Fund, L.P. $41.0
Aug. 1996............... UNR Leavitt Chase Brass Industries, Inc. 95.0
Sept. 1996.............. UNR Home Products Franke, Inc. 21.4
Dec. 1996............... Real Time Solutions, Inc. Pinnacle Automation 4.0
</TABLE>

9. Litigation

The Company is involved in various pending legal proceedings and claims
arising in the normal course of its business. Although the outcome of such
proceedings and claims cannot be determined with certainty, the Company
believes, after consultation with counsel, that such proceedings and claims,
individually or in the aggregate, are not material to either its business,
financial condition, or results of operations.

25
<PAGE>

ROHN INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

10. Leases

The Company leases certain of its facilities and equipment under operating
leases or capital leases, as defined by SFAS No. 13. The Company's property
under capital leases, which is included in plant and equipment, consists of
$2.7 million at December 31, 1998, and $3.1 million at December 31, 1997.

Future minimum payments for operating leases at December 31, 1998 are
$377,000 in 1999, $336,000 in 2000, $312,000 in 2001, $240,000 in 2002,
$119,000 in 2003 and $152,000 thereafter. Rental expense under operating
leases was approximately $493,000 in 1998, $469,000 in 1997, and $1,220,000 in
1996.

11. Long-term Borrowings

Total borrowings of the Company at December 31, 1998 and 1997, consisted of
the following (in thousands):

<TABLE>
<CAPTION>
1998 1997
------- -------
<S> <C> <C>
Mortgage notes payable at 7.5% to 9.5%................... $ 7,651 $ 7,918
Capital leases........................................... 3,619 4,301
------- -------
Total................................................ $11,270 $12,219
======= =======

Classified in the balance sheet as follows:

Current portion of long-term liabilities................. $ 1,017 $ 948
Notes and capital leases................................. 10,253 11,271
------- -------
Total................................................ $11,270 $12,219
======= =======
</TABLE>

Aggregate annual payments required on secured debt, including capitalized
leases, are $1,017,000 in 1999, $1,067,000 in 2000, $821,000 in 2001, $607,000
in 2002, and $7,758,000 thereafter.

12. Stock Option Plans

The Company had two stock option plans at December 31, 1998, the Key
Executives' Stock Option Plan and the 1994 Stock Option Plan.

The Key Executives' Stock Option Plan was approved by the shareholders of
the Company on July 12, 1990. This Plan provides for granting of non-qualified
and incentive stock options, and reserves for the issuance of up to 2,500,000
authorized but unissued shares of common stock. Options granted under this
Plan were exercisable at a price equal to the fair market value at the date of
grant and expired in ten years. At December 31, 1998, 183,000 common shares
were available for granting under this plan. At December 31, 1998, 970,000
options were outstanding under this plan.

The 1994 Stock Option Plan was approved by the shareholders of the Company
on November 1, 1994. This Plan provides for granting of non-qualified options
and reserves for the issuance of up to 500,000 shares. Outstanding options
granted under this Plan are exercisable at a price equal to the fair market
value at the date of grant, reduced by the amount of any "Extraordinary
Dividend" made after the date of grant, and expire in five years. Each option
is exercisable upon the attainment of certain stock price thresholds, adjusted
for extraordinary dividends, or fifty-four months, whichever comes earlier. At
December 31, 1998, 5,000 common shares were available for granting under this
Plan. At December 31, 1998, 50,000 options were outstanding under this plan.

26
<PAGE>

ROHN INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Information relating to these plans are summarized below (in thousands
except for per share data):

<TABLE>
<CAPTION>
Average
Shares Option
Subject to Price Per
Options Share
---------- ---------
<S> <C> <C>
Outstanding December 31, 1995, adjusted for
extraordinary dividends........................... 445 $3.288
Granted.......................................... -- --
Exercised........................................ (245) 3.084
Canceled......................................... -- --
----- ------
Outstanding December 31, 1996, adjusted for
extraordinary dividends........................... 200 $0.838
Granted.......................................... 210 6.199
Exercised........................................ (200) 0.838
Canceled......................................... -- --
----- ------
Outstanding December 31, 1997, adjusted for
extraordinary dividends........................... 210 $6.199
Granted.......................................... 950 5.872
Exercised........................................ -- --
Canceled......................................... (140) 5.609
----- ------
Outstanding December 31, 1998, adjusted for
extraordinary dividends........................... 1,020 $5.976
===== ======
</TABLE>

13. Stock-Based Compensation Plans

The Company has two stock option plans, the Key Executives Stock Option
Plan ("Executive Plan"), and the 1994 Stock Option Plan ("Option Plan"). The
Company accounts for both plans under APB Opinion No. 25, under which no
compensation cost has been recognized. Had compensation cost for stock options
awarded under the plans been determined consistent with FASB Statement No.
123, the Company's net income and earnings per share would have been reduced
to the following pro forma amounts:

<TABLE>
<CAPTION>
Twelve Months Ended
December 31, 1998
(In thousands, except per share data) -------------------
<S> <C>
Net income:
As reported......................................... $14,043
Pro forma........................................... 13,673
Basic EPS:
As reported......................................... $ 0.27
Pro forma........................................... $ 0.26
Diluted EPS:
As reported......................................... $ 0.27
Pro forma........................................... $ 0.26
</TABLE>

27
<PAGE>

ROHN INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

<TABLE>
<CAPTION>
Twelve Months Ended
December 31, 1997
(In thousands, except per share data) -------------------
<S> <C>
Net income:
As reported......................................... $18,919
Pro forma........................................... 18,854
Basic EPS:
As reported......................................... $ 0.36
Pro forma........................................... $ 0.36
Diluted EPS:
As reported......................................... $ 0.36
Pro forma........................................... $ 0.36
<CAPTION>
Twelve Months Ended
December 31, 1996
(In thousands, except per share data) -------------------
<S> <C>
Net income:
As reported......................................... $46,041
Pro forma........................................... 46,033
Basic EPS:
As reported......................................... $ 0.89
Pro forma........................................... $ 0.88
Diluted EPS:
As reported......................................... $ 0.89
Pro forma........................................... $ 0.88
</TABLE>

As of December 31, 1998, the Company may grant options in respect of 3
million shares in aggregate under the plans. At December 31, 1998, the Company
has options outstanding and not yet exercised of 1,020,000 shares under the Key
Executives' Stock Option Plan and the 1994 Stock Option Plan. The option plans
allow the participants to vest 33.33% per year beginning with the first year
and expire in either five or ten years.

A summary of the status of the Company's option plans for the years December
31, 1996 through December 31, 1998 and changes during the years then ended is
presented in the table and narrative below:

<TABLE>
<CAPTION>
Twelve Months Ended
December 31, 1998
-----------------------
Weighted Average Shares
Exercise Price (000)
---------------- ------
<S> <C> <C>
Outstanding at beginning of period............... $6.199 210
Granted........................................ 5.872 950
Exercised...................................... -- --
Forfeited...................................... -- --
Expired........................................ -- --
Canceled....................................... 5.609 (140)
------ -----
Outstanding at end of period..................... $5.976 1,020
Exercisable at end of year....................... $5.525 70
Weighted average fair value of
options granted................................. $2.681
</TABLE>

28
<PAGE>

ROHN INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

<TABLE>
<CAPTION>
Twelve Months Ended
December 31, 1997
-----------------------
Weighted Average Shares
Exercise Price (000)
---------------- ------
<S> <C> <C>
Outstanding at beginning of period................ $ .838 200
Granted......................................... 6.199 210
Exercised....................................... .838 (200)
Forfeited....................................... -- --
Expired......................................... -- --
Canceled........................................ -- --
------ ----
Outstanding at end of period...................... $6.199 210
Exercisable at end of year........................ -- --
Weighted average fair value of options granted.... $2.322
<CAPTION>
Twelve Months Ended
December 31, 1996
-----------------------
Weighted Average Shares
Exercise Price (000)
---------------- ------
<S> <C> <C>
Outstanding at beginning of period................ $3.288(1) 445
Granted......................................... -- --
Exercised....................................... 3.084 (245)
Forfeited....................................... -- --
Expired......................................... -- --
Canceled........................................ -- --
------ ----
Outstanding at end of period...................... $ .838(2) 200
Exercisable at end of year........................ $3.209(2) 200
Weighted average fair value of
options granted.................................. $ 0.00
</TABLE>
- --------
(1) Adjusted for 1995 extraordinary dividends of $2.35.
(2) Adjusted for 1996 extraordinary dividends of $2.40.

The 1,020,000 options outstanding at December 31, 1998 have an exercise
price between $4.375 and $7.75 with a weighted-average exercise price of
$5.976 and a weighted average remaining contractual life of 5.87 years. The
fair value of each option grant is estimated on the date of grant using the
Black-Scholes option pricing model with the following weighted-average
assumptions used for the option grants in 1998: risk-free interest rates of
5.63 percent, expected dividend yield of 1.79 percent, expected life of 10.0
years, and expected volatility of 36.81 percent. The following weighted-
average assumptions used for the options granted in 1997 were: risk-free
interest rate of 6.45 percent, expected dividend yield of 1.72 percent,
expected life of 5.0 years and expected volatility of 37.18 percent. No
options were granted in 1996.

14. Restricted Stock Plan

The Restricted Stock Plan was approved by the shareholders of the Company
on July 30, 1992. The Plan provides for the granting of restricted stock to
certain key employees and reserves for issuance of 1,000,000 shares of common
stock.

The Company had 388,990 and 242,048 shares of restricted stock outstanding
at December 31, 1998 and 1997, respectively. Of the current shares
outstanding, 75,000 were awarded to the Company's President and CEO in
connection with his employment agreement and 313,990 shares were issued to
certain key employees of the

29
<PAGE>

ROHN INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Company. These shares have the same dividend and voting rights as other common
stock. Restricted stock is considered to be currently issued and outstanding.
The cost of the restricted stock, determined as the fair market value of the
shares at the date of grant, is expensed ratably over a three to five-year
vesting period. Such expense amounted to $526,000 in 1998; $1,153,000 in 1997,
and $400,000 in 1996.

15. Stockholders' Equity

On September 24, 1990, the Company announced that its Board of Directors
had authorized the acquisition, through both negotiated transactions involving
large blocks and open-market purchases, of up to 1.5 million shares of its
common stock to be held as treasury shares and be available to meet
requirements of its Key Executives' Stock Option Plan. As of December 31, 1998
and 1997, 1,133,565 shares have been purchased, respectively.

On December 29, 1997, the Company paid a dividend of $0.10 per share to
stockholders of record as of the close of business on December 15, 1997.

On December 23, 1996, the Company paid a dividend of $0.25 per share and an
extraordinary dividend of $0.35 per share to stockholders of record as of the
close of business on December 16, 1996.

On September 27, 1996, the Company paid an extraordinary dividend of $2.00
per share to stockholders of record as of the close of business on September
17, 1996.

16. Restructuring

During the third quarter of 1997, the Company recorded a restructuring
charge of $3.4 million related to cost-cutting measures including early
retirement costs, work force reductions, and expenses associated with the
development and implementation of this program. The provision for the
reduction in workforce included severance and other benefits for approximately
25 employees, the majority of whom were based in Peoria, Illinois and
Frankfort, Indiana.

During 1997, cash expenditures of $1.9 million were charged against the
reserve. Approximately $1.1 million of expenses were charged against the
reserve in 1998. The Company expects to spend the remaining $0.4 million of
the restructuring reserve in 1999.

17. Related Party Transactions

The Company held three notes receivable for a total of $2,300,000 from
executive officers of the Company which were paid in full by the executive
officers during 1997 by transferring 309,000 shares of common stock to the
Company. These notes were related to the 1994 Executive Stock Purchase Plan
approved by shareholders of the Company on November 1, 1994. Under the Plan,
executive officers purchased 1,650,000 shares of common stock from the
Company, at the then fair market value. Shares were paid for in cash in the
amount of the par value of the stock and the balance in promissory notes due
in three years. The notes were interest free (although interest was imputed
for tax purposes), except in the event a participant resigned from the
Company, was terminated for cause or, if the stock was sold within three
years, the notes would become due and interest at the applicable Federal rate
was applied retroactively from the date of the notes. Dividends, net of
Federal and state taxes, were applied to the principal of the notes. In 1996,
dividends reduced the outstanding balance from $5,525,000 at December 31, 1995
to $2,300,000 at December 31, 1996.

30
<PAGE>

ROHN INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

18. Investment in Corporate Joint Venture

In December 1997, the Company formed a corporate joint venture with
BrasilSat Harald, S.A. ("BrasilSat"), Brazil's largest tower manufacturer and
installer, to serve the growing telecommunications infrastructure industry in
Brazil and the rest of South America. ROHN owns 49 percent of the corporate
joint venture, which will operate under the name ROHN BrasilSat, S.A..

The corporate joint venture is currently constructing production facilities
in Curitiba, Brazil, for the manufacture of concrete and lightweight composite
equipment shelters and cabinets, tapered steel poles, and self-supporting and
guyed towers. The corporate joint venture will also provide complete
installation services. As part of the agreement, BrasilSat will become the
exclusive distributor for ROHN's self-supporting and guyed towers in Brazil,
while ROHN has exclusive rights to distribute BrasilSat brand towers worldwide
except in Brazil.

The Company accounts for the corporate joint venture under the equity
method. The investment in ROHN BrasilSat amounted to $3,129,000 at December
31, 1998. There was no investment in ROHN BrasilSat in 1997. The Company has
recorded a loss of $540,000 in the accompanying consolidated statements of
income, which represents the Company's share of the start-up losses. ROHN
BrasilSat started shipping products to customers in late 1998.

19. Business Segment Information

The Company operates in two business segments: Tower Structures and
Enclosures. The segments are managed as strategic business units due to their
distinct manufacturing processes and potential end-user application. The Tower
Structures segment includes manufacturing plants in Peoria, Illinois and
Frankfort, Indiana, as well as a world-wide sales, marketing and distribution
effort. The Enclosures segment includes a manufacturing plant in Bessemer,
Alabama and shares the Tower Structures segment's sales and marketing
resources.

Accounting policies for measuring segment assets and earnings before
interest and taxes are substantially consistent with those described in Note
1. The Company evaluates segment performance based on earnings before interest
and taxes. Transfers between segments which are not material in nature, are
recorded at cost.

<TABLE>
<CAPTION>
Tower
Structures Enclosures
Segment Segment Elimination Total
1998 (in thousands) ---------- ---------- ----------- --------
<S> <C> <C> <C> <C>
Net sales................... $111,545 $64,143 $(1,535) $174,153
Earnings before interest and
taxes...................... 9,201 15,035 -- 24,236
Depreciation and
amortization............... 2,508 640 -- 3,148
Capital expenditures (1).... 1,964 319 -- 2,283
Segment assets.............. $ 84,873(2) $29,319 -- $114,192

<CAPTION>
Tower
Structures Enclosures
Segment Segment Elimination Total
1997 (in thousands) ---------- ---------- ----------- --------
<S> <C> <C> <C> <C>
Net sales................... $110,136 $51,025 $(3,029) $158,132
Earnings before interest and
taxes...................... 16,790 9,669 -- 26,459
Depreciation and
amortization............... 2,062 572 -- 2,634
Capital expenditures (1).... 7,627 680 -- 8,307
Segment assets.............. $ 70,158 $40,914 $ -- $111,072

</TABLE>

31
<PAGE>

ROHN INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

<TABLE>
<CAPTION>
Tower
Structures Enclosures
Segment Segment Elimination Total
1996 (in thousands) ---------- ---------- ----------- --------
<S> <C> <C> <C> <C>
Net sales..................... $116,297 $39,038 $(901) $154,434
Earnings before interest and
taxes........................ 26,169 6,329 -- 32,498
Depreciation and amortization. 1,209 463 -- 1,672
Capital expenditures (1)...... 11,064 594 -- 11,658
Segment assets................ $ 68,758 $24,614 -- $ 93,372
</TABLE>
- --------
(1) Net of asset dispositions and retirements.
(2) Includes equity investment in Brazil of $3,129.

In 1998, the Tower Structures segment had one customer that accounted for
approximately 13% of total segment revenues. The Enclosures segment had four
customers that accounted for 65% of total segment revenue with one customer at
35% of total segment revenues, or 13% of consolidated net sales. In 1997, no
one customer accounted for more than 10% of the Company's sales. In 1996, the
Company had one customer to which it sold towers and shelters that provided
approximately 11% of its 1996 sales.

Revenues and long-lived assets are related to its U.S. operations, except
for Mexico, which had revenues of approximately $0.9 million, $0.5 million and
$0.1 million for the years ended December 31, 1998, 1997 and 1996,
respectively, and long-lived assets of $0.05 million, $0.01 million and $0.00
million as of December 31, 1998, 1997 and 1996, respectively.

20. Export Sales

Export sales for the years ended December 31, 1998, 1997, and 1996 were
$12.1 million, $10.2 million, and $8.0 million, respectively.

21. Commitments and Contingencies

From time to time, the Company becomes party to various claims and legal
actions arising during the ordinary course of business. Management believes
that the Company's cost and any potential judgments resulting from such claims
and actions would be covered by the Company's product liability insurance,
except for deductible limits and self-insured retention. The Company intends
to defend such claims and actions in cooperation with its insurers. It is
management's opinion that, in any event, their outcome would not have a
material effect on the Company's financial position or results of operations.

32
<PAGE>

ROHN INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Concluded)

22. Quarterly Results of Operations

<TABLE>
<CAPTION>
Unaudited (In thousands, except per First Second Third Fourth Year
share data) ------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C>
1998
Net sales.......................... $41,065 $39,931 $47,541 $45,616 $174,153
Gross profit....................... 11,329 11,489 10,068 10,146 43,032
Operating income................... 6,470 6,466 6,106 5,194 24,236
Income before income taxes......... 6,334 6,306 6,019 4,824 23,483
Net income......................... $ 3,959 $ 3,831 $ 3,561 $ 2,692 $ 14,043
Net income per share--basic........ $ 0.08 $ 0.07 $ 0.07 $ 0.05 $ 0.27
Net income per share--diluted...... $ 0.08 $ 0.07 $ 0.07 $ 0.05 $ 0.27
Market price of common stock:
High............................. $ 6.250 $ 6.250 $ 4.750 $ 3.500
Low.............................. $ 4.688 $ 3.750 $ 1.750 $ 1.813

<CAPTION>
Unaudited (In thousands, except per First Second Third Fourth Year
share data) ------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C>
1997
Net sales.......................... $37,748 $38,867 $37,427 $44,090 $158,132
Gross profit....................... 11,836 12,082 9,735 13,355 47,008
Operating income................... 7,819 7,651 2,084 8,905 26,459
Income before income taxes......... 7,640 7,416 1,910 13,104 30,070
Net income......................... $ 4,740 $ 4,591 $ 1,185 $ 8,403 $ 18,919
Net income per share--basic........ $ 0.09 $ 0.09 $ 0.02 $ 0.16 $ 0.36
Net income per share--diluted...... $ 0.09 $ 0.09 $ 0.02 $ 0.16 $ 0.36
Market price of common stock:
High............................. $ 8.000 $ 7.875 $ 6.875 $ 6.000
Low.............................. $ 5.875 $ 5.250 $ 4.250 $ 4.438
</TABLE>

23. Subsequent Event

33
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Stockholders and Board of Directors of
ROHN Industries, Inc.:

We have audited the accompanying consolidated balance sheets of ROHN
Industries, Inc. (a Delaware corporation) and Subsidiaries as of December 31,
1998 and 1997, and the related consolidated statements of income,
stockholders' equity and cash flows for each of the three years in the period
ended December 31, 1998. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of ROHN
Industries, Inc. and Subsidiaries as of December 31, 1998 and 1997, and the
results of their operations and their cash flows for each of the three years
in the period ended December 31, 1998 in conformity with generally accepted
accounting principles.

Arthur Andersen LLP

Chicago, Illinois
February 19, 1999, except with respect
to the matters discussed in Note 23,
as to which the date is March 31, 1999

34
<PAGE>

Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.

None.

PART III

Item 10. Directors and Executive Officers of the Registrant.

The directors of the Company are as follows:

<TABLE>
<CAPTION>
Principal Occupations for the Last Five
Years,
Director Other Directorships and Committee
Name Since Age Assignments
---- -------- --- ---------------------------------------
<C> <C> <C> <S>
Charles M. Brennan III. 1989 57 Chairman and Chief Executive Officer of
MYR Group Inc., an electrical and
telecommunications contracting firm
(October 1989 to present). Other
directorships: MYR Group Inc.; Control
Devices, Inc., a supplier of sensor
controls. Chair of the Company's Audit
Committee and member of the Executive
Committee.

Darius W. Gaskins, Jr.. 1990 59 Co-Founding Partner, Carlisle, Fagan,
Gaskins & Wise Inc., a management
consulting firm (May 1993 to present);
Partner, High Street Associates, a
management and investment firm (June
1991 to present); Chairman, Leaseway
Transportation Corp., a distribution
services provider (December 1994 to
April 1995). Other directorships:
Northwestern Steel and Wire Company, a
producer of steel and wire products;
Sapient Corporation, a software company;
Anacomp Incorporated, a micrographics
supplier. Chair of the Company's
Compensation Committee and member of the
Executive and Audit Committees.

Gene Locks............. 1989 61 Chairman of the Board of the Company (May
1991 to present); Founding and managing
partner, Greitzer & Locks, attorneys
(1966 to present) . Member of Trustees
Advisory Committee to UNR Asbestos-
Disease Claims Trust (June 1989 to
present). Other directorships: Celotex
Corporation (1997 to present). Member of
the Company's Executive and Compensation
Committees.

Ruth R. McMullin....... 1990 57 Chair, Trustees of the Eagle-Picher
Personal Injury Settlement Trust
(November 1996 to present); Management
Fellow (faculty member), Yale School of
Management (August 1994 to 1995);
President and Chief Executive Officer,
Harvard Business School Publishing
Corporation (November 1991 to April
1994). Other directorships: Bausch &
Lomb, Inc., a vision care company.
Member of the Company's Executive,
Compensation and Audit Committees.

Brian B. Pemberton..... 1997 54 President and Chief Executive Officer of
the Company (commencing April 1997 to
present); President, Skycell Services, a
division of American Mobile Satellite
Corporation, a common carrier providing
satellite-based mobile voice and data
services to North America ("AMSC")
(August 1996 to December 1996);
President and Chief Executive Officer,
AMSC (April 1995 to August 1996);
President, AMSC (April 1990 to April
1995). Other directorships: AC Nielsen
Corporation, provider of market
research. Chair of the Company's
Executive Committee.
</TABLE>

35
<PAGE>

The executive officers of the Company are as follows:

<TABLE>
<CAPTION>
Name Age Experience (Tenure)
---- --- ------------------
<C> <C> <S>
Brian B. Pemberton. 54 See above.

David V. LaRusso... 45 Vice President and Chief Financial Officer of the
Company (September 1997 to present); President and
Chief Executive Officer, Allied HealthCare Products,
Inc. (1994-1996); Vice President and Chief Financial
Officer, Allied HealthCare Products, Inc. (1988-
1996).

Richard L. Rohn.... 54 Vice President--Shelters of the Company (September
1997 to present); President Shelter Operations, ROHN
Division of UNR Industries, Inc. (1962-1997).

James R. Cote...... 49 Vice President--International and Corporate
Development (April 1998 to present); Vice President--
Marketing and Sales of the Company (September 1997 to
April 1998); Vice President Sales and Marketing, ROHN
Division of UNR Industries, Inc. (1993-1997).

Timothy W. Kirk.... 42 Vice President, General Counsel and Secretary of the
Company (December 1997 to present); General Counsel,
Central Illinois Light Company (1993-1997).

Craig A. Ahlstrom.. 52 Vice President--Sales and Marketing of the Company
(April 1998 to present); Channel and Sales Manager,
Xantel Corporation (1997-1998); Consulting Manager,
Lexmark International (1995-1997); Vice President--
Sales and Marketing, Supreme Products (1993-1995).
</TABLE>

All of the executive officers are elected by the Board of Directors of the
Company at the Annual Meeting for Stockholders for one-year terms and serve
until such time as their respective successors are duly elected and qualified.

36
<PAGE>

Item 11. Executive Compensation.

Summary Compensation Table

The following table sets forth the total cash and non-cash compensation in
each of 1996, 1997 and 1998 received by the Company's Chief Executive Officers
serving as such in 1998 and the Company's four other most highly compensated
executive officers serving at the end of 1998.

<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
---------------------------- ---------------------
Other
Annual Restricted Securities
Compen- Stock Underlying All Other
Name and Principal Salary Bonus sation Awards Options Compensation
Position Year ($) ($) ($) ($)(1) (#)(2) ($)
- ------------------ ---- ------- ------- ------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Brian B. Pemberton(3)... 1998 331,250 200,000 -- 587,500 450,000 2,500(6)
President and Chief
Executive Officer 1997 207,230 200,000 -- 750,000 100,000 56,315(7)

Richard Rohn............ 1998 183,462 168,000 -- 205,625 105,000 2,500(6)
Vice President--
Shelters 1997 174,785 90,000 -- 187,500 -- 2,375(6)
1996 172,046 172,000 -- 212,500 -- 2,375(6)
1995 200,436 172,000 -- 22,613 -- 2,310(6)

James R. Cote........... 1998 142,508 61,000 -- 176,250 90,000 2,500(6)
Vice President--
International 1997 134,200 30,000 -- -- -- 2,500(6)
& Corporate Development 1996 171,625 60,392 -- 61,250 -- 1,989(6)
1995 182,280 -- -- -- -- 1,924(6)

David V. LaRusso(4)..... 1998 163,077 68,000 -- 176,250 90,000 1,108(6)
Vice President and 1997 49,231 20,000 -- -- 50,000 5,435(7)
Chief Financial Officer

Craig A. Ahlstrom(5).... 1998 103,924 52,000 -- 174,375 50,000 124,975(8)
Vice President--Sales &
Marketing
</TABLE>
- --------
(1) Restricted Stock Awards are made pursuant to the terms of the ROHN 1992
Restricted Stock Plan. The stock is valued at the closing price of the
stock on the NASDAQ Stock Market on the date of the award. On December 31,
1997, Mr. Pemberton held 100,000 shares of restricted stock valued at
$515,600, and on December 31, 1998, he held 175,000 shares of restricted
stock valued at $601,562. On December 31, 1997, Mr. Rohn held 56,024
shares of restricted stock valued at $288,860, and on December 31, 1998,
held 73,990 shares of restricted stock valued at $254,341. During 1997,
Messrs. Pemberton and Rohn were awarded 100,000 and 25,000 shares of
restricted stock, respectively, and during 1998, they were awarded 100,000
and 35,000 shares, respectively. The shares of restricted stock awarded to
Messrs. Pemberton and Rohn in 1997 and 1998 vest 25% per year over a four-
year period from the date of the grant. On December 31, 1997, Mr. Cote
held 10,000 shares of restricted stock valued at $51,560, and on December
31, 1998, he held 40,000 shares of restricted stock valued at $137,500.
During 1996, Mr. Cote was awarded 10,000 shares of restricted stock that
will vest 100% in five years. During 1998, Mr. Cote was awarded 30,000
shares of restricted stock that will vest 25% per year over a four-year
period from the date of grant. During 1998, Messrs. LaRusso and Ahlstrom
were each awarded 30,000 shares of restricted stock which will vest 25%
per year over a four-year period from the date of the grant. On December
31, 1998, Messrs. LaRusso and Ahlstrom each held 30,000 shares of
restricted stock valued at $103,125. Messrs. Pemberton, Rohn, Cote,
LaRusso and Ahlstrom were entitled to receive all dividends on restricted
stock held by them.
(2) See "Option Grants in 1997 and 1998" below.
(3) Mr. Pemberton's employment with the Company commenced on April 14, 1997.
(4) Mr. LaRusso's employment with the Company commenced on September 2, 1997.
(5) Mr. Ahlstrom's employment with the Company commenced on April 1, 1998.

37
<PAGE>

(6) The amounts shown constitute the Company's contributions to the 401(k)
plan for these employees.
(7) The amounts shown are for relocation expenses incurred by Messrs.
Pemberton and LaRusso.
(8) The amount shown is for relocation expenses of $58,271, a relocation bonus
of $41,704 and a signing bonus of $25,000 that were negotiated with Mr.
Ahlstrom.

Option Grants in 1997 and 1998(1)
<TABLE>
<CAPTION>
Potential Realizable
Percent of Value ($) at Assumed
Number of Total Annual Rates of Stock
Securities Options Exercise Price Appreciation
Underlying Granted or Base for Option Terms (2)
Options in Fiscal Price Expiration ---------------------
Name Year Granted (#) Year ($) Date 5% 10%
- ---- ---- ----------- ---------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Brian B. Pemberton...... 1998 450,000 47% $ 5.875 03/11/08 $1,662,628 $4,213,450
1997 100,000 48% $ 7.75 04/14/02 214,118 487,393

Richard Rohn............ 1998 105,000 11% $ 5.875 03/11/08 387,947 983,138
1997 -- -- -- -- -- --

James R. Cote........... 1998 90,000 9% $ 5.875 03/11/08 332,526 842,690
1997 -- -- -- -- -- --

David V. LaRusso........ 1998 90,000 9% $ 5.875 03/11/08 332,526 842,690
1997 50,000 24% $ 4.37 09/02/02 60,368 137,413

Craig A. Ahlstrom....... 1998 50,000 5% $5.8125 4/21/03 80,301 177,445
1997 -- -- -- -- -- --
</TABLE>
- --------
(1) The Company stock option plans are administered by the Compensation
Committee of the Board of Directors, which has authority to determine the
employees to whom, and the terms at which, options will be granted. Under
the terms of the Company's plan, the Compensation Committee retains
discretion, subject to plan limits, to modify the terms of outstanding
options.
The per share option prices are the fair market value of the Company's
common stock on the date of the grant less any extraordinary dividends paid
after the grant date. The options granted to Mr. Pemberton in 1997 became
exercisable twelve months from the date of the grant. All remaining options
granted are exercisable at the rate of one-third per year over a three year
period. The options granted to Messrs. Pemberton and LaRusso in 1997, and
the options granted to Mr. Ahlstrom in 1998, have a term of five years. All
other options were granted for a term of ten years. In addition, all
options granted become exercisable upon a change of control as defined in
the plans.
(2) The amounts shown in these columns are calculated at the 5% and 10% rates
set by the SEC and are not intended to forecast future appreciation of the
Company's stock price.

Aggregate Option Exercises in Last Two Fiscal Years and Fiscal Year-End Option
Values for 1997 and 1998

<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Shares Underlying Options at In-the-money Options at
Acquired Value Fiscal Year-End Fiscal Year-End (1)
on ($) ------------------------- -------------------------
Name Year Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ---- ---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Brian B. Pemberton...... 1998 -- -- 100,000 450,000 -- --
1997 -- -- -- 100,000 -- --

Richard Rohn............ 1998 -- -- 105,000 -- --
1997 50,000 $267,500 -- -- -- --

James R. Cote........... 1998 -- -- -- 90,000 -- --
1997 -- -- -- -- -- --

David V. LaRusso........ 1998 -- -- 16,667 123,333 -- --
1997 -- -- -- 50,000 -- $39,300

Craig A. Ahlstrom....... 1998 -- -- -- 50,000 -- --
1997 -- -- -- -- -- --
</TABLE>
- --------
(1) On December 31, 1998, the market value of the Company stock was $3.406.

38
<PAGE>

Employment Contracts and Other Agreements

Employment Agreement--Brian B. Pemberton

Brian B. Pemberton was elected President and Chief Executive Officer of the
Company on April 14, 1997. The Company has entered into an employment
agreement with Mr. Pemberton which provides for a base salary of $325,000,
subject to annual review and adjustment by the Compensation Committee. Mr.
Pemberton will be eligible for an annual bonus under the Company's Incentive
Bonus Plan which provides a maximum bonus opportunity of 100% of base salary
for senior executive officers. In addition, Mr. Pemberton was awarded 100,000
shares of restricted stock under the Restricted Stock Plan and options to
purchase an additional 100,000 shares under the Company's Stock Option Plan.
Restricted stock will vest at the rate of 25% per year during a four-year
period of continuous employment or in the event of death, disability or a
change of control of the Company, as provided in the Restricted Stock Plan.
Stock options are currently exercisable at the market price of the stock as of
April 1, 1997, and expire in April 2002. Mr. Pemberton is covered by the
Company's health, disability and life insurance program and other benefits
generally provided to the Company executives. Mr. Pemberton's employment may
be terminated by either party at any time for any reason, but in the event his
employment is terminated by the Company without cause, as defined in the
agreement, Mr. Pemberton will be entitled to a severance payment equal to one
year's base salary then in effect plus the amount of the target bonus under
the Incentive Bonus Plan for the year in which termination occurs.

Change of Control Agreements

At various times, the Company has entered into Change of Control Agreements
("Control Agreements") with various executive officers. On November 30, 1996,
the Company entered into a Control Agreement with James Cote. On September 2,
1997, the Company entered into a Control Agreement with David V. LaRusso.
These Control Agreements were for a term of three years, subject to renewal
for additional three year terms. On July 24, 1998, the Control Agreement with
Mr. LaRusso was terminated.

A Change of Control includes (i) the acquisition by any person or group
acting in concert of beneficial ownership of 50% or more of the Company's
outstanding shares, with certain exceptions, (ii) a change in the composition
of the Company's Board of Directors in any 24-month or less period such that a
majority of the directors serving at the end of the period were not serving at
the beginning of the period, unless at the end of the period the majority of
the directors in office were nominated upon the recommendation of a majority
of the Board at the beginning of the period, or (iii) approval by stockholders
of a merger, consolidation or similar transaction (as to which those
stockholders immediately prior to such transaction are not the owners of more
than 75% of the resulting corporation's outstanding voting stock after such
event) or the sale of all or substantially all of the Company's consolidated
assets.

If, during the term of Mr. Cote's Change in Control Agreements, a Change of
Control occurs, and within a two year period from the date of such Change of
Control, either (i) Mr. Cote's employment with the Company is terminated by
the Company other than for cause or on account of his death, permanent
disability or retirement, or (ii) Mr. Cote resigns for good reason, then the
Company is required to pay to Mr. Cote a severance payment. The severance
payment would be equal to one and one-third times base salary for Mr. Cote,
for the year in which termination occurs; provided that in no event may the
total amount of the severance payment exceed 2.99 times the five year average
W-2 income of Mr. Cote. The severance payment is payable in a single lump sum
payable within 30 days of the termination of employment or resignation.

In addition to the severance payment, the Company is required to provide
health, disability and life insurance in accordance with the plans maintained
by the Company for Mr. Cote for a period of one year from the date of
termination of Mr. Cote's employment, provided that health, disability and
life insurance benefits cease if Mr. Cote becomes employed during such period
and receives similar benefits in connection with such employment.

39
<PAGE>

During employment and for a period of one year after the termination of
employment for any reason, Mr. Cote may not enter into, be connected with, or
work for an individual, firm or corporation which is then in substantial
competition with the Company in the United States.

Letter Agreements

On July 24, 1998, the Company entered into letter agreements (the "Letter
Agreements") with the following executive officers of the Company: Messrs.
David V. LaRusso, Richard L. Rohn, Timothy W. Kirk, Craig A. Ahlstrom and Jay
Buehler, former Vice President--Operations of the Company. The Letter
Agreements each provide that if the employment of the covered executive
officer is terminated by the Company without cause, as defined in the Letter
Agreement, prior to July 24, 2001, the terminated executive officer will be
entitled to a severance payment equal to one year's base salary then in effect
plus the amount of the target bonus under the Incentive Bonus Plan for the
year in which termination occurs. Mr. Buehler's employment terminated in
November 1998 and the Company made a severance payment of $232,132 to Mr.
Buehler.

Indemnification Agreements

At various times, the Company has entered into Indemnification Agreements
("Indemnification Agreements") with various executive officers and directors
(each an "Indemnitee"). On June 20, 1990, the Company entered into an
Indemnification Agreement with each of Charles M. Brennan, III, Darius W.
Gaskins, Jr. and Ruth McMullin. On November 22, 1995, the Company entered into
an Indemnification Agreement with Gene Locks. These Indemnification Agreements
provide that the Company shall indemnify, and advance expenses (as defined
therein) to, each Indemnitee to the fullest extent permitted by law.

Directors' Compensation

The Company employees who serve as directors of the Company receive no
compensation for such services. Non-employee directors of the Company are paid
compensation at an annual rate of $30,000 (the Chairman receives $50,000),
payable in quarterly installments. Non-employee directors have the right to
receive all or part of their annual compensation in shares of restricted
Company common stock. Non-employee directors receive $1,000 for each Board
meeting of a committee of the Board which they attend in person or by
telephone. Directors are also reimbursed for their out-of-pocket expenses
incurred in connection with such meetings.

40
<PAGE>

Item 12. Security Ownership of Certain Beneficial Owners and Management.

The following table sets forth information as of March 22, 1999 (except as
otherwise indicated) regarding the beneficial ownership of Company common
stock by: (i) each person or group that has reported beneficial ownership of
more than five percent of the Company common stock outstanding, (ii) the
Company's current directors and certain of its current executive officers, and
(iii) all of the Company's current directors and officers as a group.
<TABLE>
<CAPTION>
Common Stock
--------------------------
Amount and
Nature of
Beneficial Percent
Beneficial Owner Ownership (1) of Class (2)
- ---------------- ------------- ------------
<S> <C> <C>
Principal Stockholders
UNR Asbestos-Disease Claims Trust (3)............... 29,348,051 55.5%
100 North Lincolnway
North Aurora, IL 60542

Portfolio Q Investors, L.P. (4)..................... 3,189,000 6.0
201 Main Street
Fort Worth, TX 76102

Directors and Executive Officers
Craig Ahlstrom (5).................................. 46,500 *

Charles M. Brennan, III............................. 25,690 *

James R. Cote (5)................................... 70,000 *

Darius W. Gaskins, Jr............................... 57,190 *

David V. LaRusso (5)................................ 76,500 *

Gene Locks.......................................... 28,650 *

Ruth R. McMullin.................................... 46,235 *

Brian B. Pemberton (5).............................. 455,000 *

Richard L. Rohn (5)................................. 210,344 *

All directors and officers as a group (10 persons)
(6)................................................ 1,069,409 2.0%
</TABLE>
- --------
(1) Unless otherwise noted, the persons listed beneficially own all shares set
forth opposite their respective names with sole power to vote and dispose
of such shares, except Mr. Pemberton (5,000 shares) wherein voting or
investment power is shared with others. Mrs. McMullin's total also
includes 8,700 shares held by her spouse and 3,325 shares held in a trust.
(2) Percentage ownership is not shown for directors or officers owning less
than one percent of the outstanding common stock.
(3) The Trustees of the Trust are John H. Laeri, Jr., Chairman, Michael E.
Levine, and David S. Schrager. The Trustees are deemed to share beneficial
ownership of the 29,348,051 Trust shares because they collectively possess
the power to vote and dispose of the Trust shares on behalf of the Trust,
except that the United States Bankruptcy Court for the Northern Division
of Illinois must approve sales of Trust shares. Pursuant to a Trust Voting
Agreement between the Trust and PiRod, the Trust has granted PiRod the
right to vote the Company shares held by the Trust (i) in favor of the
Merger and for adoption and approval of the Merger Agreement, (ii) against
any action or agreement that would result in a breach in any material
respect of any representation, warranty or covenant of the Company in the
Merger Agreement, and (iii) against any action or agreement that would
impede, interfere with, or delay, postpone or attempt to discourage the
Merger. PiRod has disclaimed beneficial ownership of the Company shares
held by the Trust.
(4) According to a Schedule 13D filed by Portfolio Q Investors with the SEC on
December 23, 1998, it and its affiliates had sole voting and dispositive
power over such the Company shares.

41
<PAGE>

(5) Includes 16,500, 30,000, 46,500, 250,000 and 34,650 shares subject to
stock options exercisable within 60 days of March 22, 1999 for Messrs.
Ahlstrom, Cote, LaRusso, Pemberton and Rohn, respectively, and 405,950
shares subject to stock options exercisable within 60 days of March 22,
1999 for all current directors and executive officers as a group.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who own more than 10% of the
Company's common stock, to file reports of ownership and changes in ownership
with the Securities and Exchange Commission. The Company believes that during
1997 and 1998 its executive officers, directors and greater than 10%
stockholders have complied with applicable requirements.

Item 13. Certain Relationships and Related Transactions.

See "Item 11. Executive Compensation--Employment Contracts and other
Agreements" above.

PART IV

Item 14. Exhibits, Financial Statement Schedule and Reports on Form 8-K.

(a) 1. Financial Statements:

The information required by this item is included in Item 8 of this
Report.

2. The following financial schedule for the years 1998, 1997 and 1996 is
submitted herewith:
Schedule II--Allowance for Doubtful Accounts.

3. Exhibits:

The following list sets forth the exhibits to this Form 10-K as required by
Item 601 of Regulation S-K. Certain exhibits are filed herewith, while the
balance are incorporated by this reference to documents previously filed with
the Securities and Exchange Commission.

<TABLE>
<CAPTION>
Number Description
------ -----------
<C> <S>
2 (a) Agreement and Plan of Merger dated as of December 22, 1998,
between ROHN Industries, Inc. ("ROHN") and PiRod Holdings, Inc.
(incorporated by reference to Exhibit 99.1 to ROHN's Current
Report on Form 8-K filed December 28, 1998).

(b) Plan of Reorganization (incorporated herein by reference to
Exhibit A to ROHN's 1989 first quarter Form 10-Q).

3 Amended and Restated Certificate of Incorporation of ROHN dated
December 17, 1997 (incorporated herein by reference to Exhibit A
to ROHN's Current Report on Form 8-K filed on December 19, 1997).

4 (a) Loan Agreement dated March 9, 1998 by and among LaSalle
National Bank and ROHN (incorporated herein by reference to
Exhibit 4 to ROHN's 1997 Annual Report on Form 10-K).

(b) PiRod Shareholders Voting Agreement among ROHN, the UNR
Asbestos-Disease Claims Trust and the stockholders of PiRod
Holdings, Inc., dated December 22, 1998 (incorporated by
reference to Exhibit 99.2 to ROHN's Current Report on Form 8-K
filed December 28, 1998).

</TABLE>

42
<PAGE>

<TABLE>
<CAPTION>
Number Description
------ -----------
<C> <S>
(c) Stockholders Agreement among ROHN Industries, Inc., the UNR
Asbestos-Disease Claims Trust, Bain Capital Fund V, L.P., Bain
Capital Fund V-B, L.P., BCIP Trust Associates, L.P., Bain Capital
V Mezzanine Fund, L.P., BCM Capital Partners, L.P., BCIP
Associates, and PH, Inc., dated December 22, 1998 (incorporated
herein by reference to Exhibit 14 to Schedule 13D filed on behalf
of UNR Asbestos-Disease Claims Trust on December 29, 1998).

10 (a) UNR Industries, Inc. 1992 Restricted Stock Plan (incorporated
herein by reference to Exhibit 10 to 1992 Form 10-K).

(b) Employment Agreement between the Company and Brian B.
Pemberton, effective April 14, 1997 (incorporated herein by
reference to Exhibit 10 to 1997 first quarter Form 10-Q).

(d) 1994 Executive Stock Purchase Plan (incorporated herein by
reference to Exhibit B to Proxy Statement dated October 11,
1994).

10.1 (a) Change of Control Agreement between the Company and James R.
Cote, dated November 30, 1996.

(b) Change of Control Agreement between the Company and David V.
LaRusso, dated September 2, 1997.

10.2 Letter agreement dated as of March 27, 1998 between UNR Asbestos-
Disease Claims Trust, Donaldson, Lufkin & Jenrette Securities
Corporation and ROHN Industries, Inc. (incorporated herein by
reference to Exhibit 11 to Amendment No. 11 to UNR Asbestos-
Disease Claims Trust's Schedule 13D).

10.3 (a) Letter agreement dated July 24, 1998 between ROHN Industries,
Inc. and David V. LaRusso.

(b) Letter agreement dated July 24, 1998 between ROHN Industries,
Inc. and Richard L. Rohn.

(d) Letter agreement dated July 24, 1998 between ROHN Industries,
Inc. and Craig A. Ahlstrom.

10.4 (a) Indemnification agreement dated June 20, 1990 between ROHN
Industries, Inc. and Charles M. Brennan III.

(b) Indemnification agreement dated June 20, 1990 between ROHN
Industries, Inc. and Darius W. Gaskins, Jr.

(d) Indemnification agreement dated November 22, 1995 between
ROHN Industries, Inc. and Gene Locks.

10.5 Termination Agreement dated March 30, 1999 between ROHN
Industries, Inc. and PiRod Holdings, Inc.

11 Computation can be determined from report.

23 Consent of Arthur Andersen LLP.

27 Financial Data Schedule.
</TABLE>

43
<PAGE>

Included in the exhibits listed above are the following exhibits which
constitute management contracts or compensatory plans or arrangements:

<TABLE>
<C> <S>
1 UNR Industries, Inc. 1992 Restricted Stock Plan.

2 Employment Agreement between the Company and Brian B. Pemberton,
effective April 14, 1997.

3 1994 Stock Option Plan.

4 1994 Executive Stock Purchase Plan.

5 Change of Control Agreement between the Company and David V.
LaRusso, dated September 2, 1997.

6 Change of Control Agreement between the Company and James R.
Cote, dated November 30, 1996.

7 Letter agreement dated July 24, 1998 between ROHN Industries,
Inc. and David V. LaRusso.

8 Letter agreement dated July 24, 1998 between ROHN Industries,
Inc. and Richard L. Rohn.

9 Letter agreement dated July 24, 1998 between ROHN Industries,
Inc. and Timothy W. Kirk.

10 Letter agreement dated July 24, 1998 between ROHN Industries,
Inc. and Craig A. Ahlstrom.

11 Indemnification agreement dated June 20, 1990 between ROHN
Industries, Inc. and Charles M. Brennan III.

12 Indemnification agreement dated June 20, 1990 between ROHN
Industries, Inc. and Darius W. Gaskins, Jr.

13 Indemnification agreement dated June 20, 1990 between ROHN
Industries, Inc. and Ruth McMullin.

14 Indemnification agreement dated November 22, 1995 between ROHN
Industries, Inc. and Gene Locks.

(b) A Form 8-K was filed on December 28, 1998, reporting that the
Company had entered into an Agreement and Plan of Merger with
PiRod Holdings, Inc., pursuant to which PiRod would be merged
with the Company.

(d) None.
</TABLE>

44
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SUPPLEMENTAL SCHEDULE

To the Stockholders and Board of Directors of ROHN Industries, Inc.:

We have audited in accordance with generally accepted auditing standards,
the consolidated financial statements of ROHN Industries, Inc. and
subsidiaries included in this Form 10-K, and have issued our report thereon
dated February 19, 1999, except with respect to the matters discussed in Note
23, as to which the date is March 31, 1999. Our audit was made for the purpose
of forming an opinion on the basic consolidated financial statements taken as
a whole. The supplemental Schedule II (Allowance for Doubtful Accounts)
included in this report is the responsibility of the Company's management and
is presented for purposes of complying with the Securities and Exchange
Commission's rules and is not part of the basic consolidated financial
statements. This schedule has been subjected to the auditing procedures
applied in the audit of the basic consolidated financial statements and, in
our opinion, fairly states in all material respects the financial data
required to be set forth therein in relation to the basic consolidated
financial statements taken as a whole.

ARTHUR ANDERSEN LLP

Chicago, Illinois
February 19, 1999

45
<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

ROHN INDUSTRIES, INC.

/s/ Brian B. Pemberton
_____________________________________
Brian B. Pemberton
Chief Executive Officer, President &
Director

March 31, 1999

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----

<S> <C> <C>
/s/ Brian B. Pemberton Chief Executive Officer, March 31, 1999
____________________________________ President & Director
Brian B. Pemberton

/s/ David V. LaRusso Vice President & Chief March 31, 1999
____________________________________ Financial and Accounting
David V. LaRusso Officer

/s/ Charles M. Brennan Director March 31, 1999
____________________________________
Charles M. Brennan

/s/ Darius W. Gaskins, Jr. Director March 31, 1999
____________________________________
Darius W. Gaskins, Jr.

/s/ Gene Locks Director, Chairman of the March 31, 1999
____________________________________ Board
Gene Locks

/s/ Ruth R. McMullin Director March 31, 1999
____________________________________
Ruth R. McMullin

</TABLE>

46
<PAGE>

Schedule II

Allowance for Doubtful Accounts (In Thousands)

Changes in the allowance for doubtful accounts for the three years ended
December 31 are as follows:

<TABLE>
<CAPTION>
1996 1997 1998
------- ------ ------
<S> <C> <C> <C>
Balance--beginning of year............................ $ 2,185 $1,136 $1,451
Add (deduct)
--Provision charged to income....................... 186 1,233 30
--Bad debts written-off............................. (1,235)* (918) (169)
--Other (reserve reversal).......................... -- -- (112)
------- ------ ------
Balance--end of year.................................. $ 1,136 $1,451 $1,200
======= ====== ======
</TABLE>
- --------
* The 1996 bad debts written-off include $1,009 related to the ancillary
hot dip galvanizing services, and are not related to the registrant's
operations in the telecommunications markets.

<PAGE>

10.1(a)

CHANGE OF CONTROL AGREEMENT
---------------------------

AGREEMENT made at Chicago, Illinois, on November 30, 1996, by and between
UNR Industries, Inc., (the "Company") and James Cote, (the "Executive").

Recitals
--------

A. The Executive is currently employed by the Company as Vice President,
Sales and Marketing UNR Rohn.

B. The Executive and the Company agree that it is desirable that the
Company provide greater employment security to the Executive, and, to
that end, the parties hereby enter into this Agreement.

In consideration of the mutual agreements herein set forth and for good and
valuable consideration, receipt of which is hereby acknowledged the parties
agree as follows:

1. Term of Agreement. Subject to the provisions of paragraphs 2 and 3 of
this Agreement, the term of this Agreement shall be for a three year term (the
"Three-Year Term") commencing on the date hereof.

2. Definitions. For purposes of this Agreement, the following definitions
apply:

(a) "Cause" shall mean (i) an act or acts of personal dishonesty by
Executive which results in personal enrichment of Executive at the expense of
the Company, (ii) violation by Executive of Executive's obligations under
paragraphs 5 or 6 of this Agreement which are willful on the Executive's part
and which are not remedied to the reasonable satisfaction of the Company in a
reasonable period of time after receipt of written notice from the Company, or
(iii) the conviction of the Executive of a felony. Any termination of this
Agreement for Cause shall be communicated by the Company to the Executive in a
notice of termination which shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of this Agreement.

(b) "Change of Control" shall mean the occurrence of any of the following
events:

(i) The "acquisition" after the date hereof by any "Person" (as such
term is defined below) of "Beneficial Ownership" (within the meaning of Rule
13d-3 promulgated under the Securities Exchange Act of 1934, as amended (the
"1934 Act"), as in effect on the date hereof) of any securities of the Company
which generally entitles the holder thereof to vote for the election of
directors of the Company (the "Voting Securities") which, when added to the
Voting Securities then "Beneficially Owned" by such Person, would result in such
Person "Beneficially Owning" 50% or more (the "Requisite Percentage") of the
combined voting power of the Company's then outstanding Voting Securities;
provided, however, that for purposes of this paragraph (a), a Person shall not
be deemed to have made an acquisition of Voting Securities if such deemed to
have made an acquisition of Voting Securities if such Person: (i) acquires
Voting Securities as a result of a stock split, stock dividend or other
corporate restructuring in
<PAGE>

which all securityholders of the class of such Voting Securities are treated on
a pro rata basis; (ii) acquires the Voting Securities directly from the Company;
(iii) becomes the Beneficial Owner of more than the Requisite Percentage of
Voting Securities solely as a result of the acquisition of Voting Securities by
the Company which, by reducing the number of Voting Securities outstanding,
increases the proportional number of shares Beneficially Owned by such Person;
(iv) is the Company or any corporation or other Person of which a majority of
its voting power or its equity securities or equity interest is owned directly
or indirectly by the Company (a "Subsidiary", (v) acquires Voting Securities in
connection with a "on-Control Transaction" (as defined in paragraph (iii) below)
or (vi) acquires Voting Securities upon the exercise or conversion of Voting
Securities of another class which does not increase the percentage of Voting
Securities Beneficially Owned by such Person; and provided further that the UNR
Asbestos Disease Claims Trust (the "Trust") may acquire the Beneficial Ownership
of additional Voting Securities to the extent that immediately prior to such
acquisition the Trust Beneficially Owned at least 50% of the outstanding Voting
Securities; or

(ii) The individuals who, as of the date of this Agreement, are
members of the Board (the "Incumbent Board"), cease for any reason to constitute
at least two thirds of the Board; provided, however, that if either the election
of any new director or the nomination for election of any new director by the
Company's stockholders was approved by (i) a vote of at least two-thirds of the
Incumbent Board or (ii) the Trust at such time as the Trust Beneficially Owns at
least 50% of the Voting Securities, such new director shall be considered as a
member of the Incumbent Board; provided further, however, that no individual
shall be considered a member of the Incumbent Board if such individual initially
assumed office as a result of either an actual or threatened "Election Contest"
(as described in Rule 14a-11 promulgated under the 1934 Act, as in effect on the
date hereof) or other actual or threatened solicitation of proxies or consents
by or on behalf of a Person other than the Board of Directors (a "Proxy
Contest"), including by reason of any agreement intended to avoid or settle any
Election Contest or Proxy Contest; or

(iii) Approval by securityholders of the Company of:

(a) A merger, consolidation or reorganization involving the
Company (a "Business Combination"), unless

(i) the securityholders of the Company, immediately before the
Business Combination, own, directly or indirectly immediately following the
Business Combination, at least 75% of the combined voting power for the election
of directors generally of the outstanding securities of the corporation
resulting from the Business Combination (the "Surviving Corporation") in
substantially the same proportion as their ownership of the Voting Securities
immediately before the Business Combination, and

(ii) the individuals who were members of the Incumbent Board
immediately prior to the execution of the agreement providing for the Business
Combination constitute at least two-thirds of the members of the Board of
Directors of the Surviving Corporation, and

2
<PAGE>

(iii) no Person (other than the Company or any Subsidiary, a trustee
or other fiduciary holding securities under one or more employee benefit plans
or arrangements (or any trust forming a part thereof maintained by the Company,
the Surviving Corporation or any Subsidiary, or any Person who, immediately
prior to the Business Combination, had Beneficial Ownership of the Requisite
Percentage of the then outstanding Voting Securities) upon consummation of the
Business Combination is the Beneficial Owner of the Requisite Percentage of the
combined voting power for the election of directors generally of the Surviving
Corporation's then outstanding securities (a transaction described in clauses
(i) through (iii) shall be referred to as a "Non-Control Transaction");

(b) A complete liquidation or dissolution of the Company; or

(c) An agreement for the sale or other disposition of all or
substantially all of the assets of the Company to any Person (other than a
transfer to a Subsidiary).

If any of the foregoing transactions are approved by securityhodlders and
not consummated within thirty (30) days after such approval is obtained (or such
longer period as may be determined by the then members of the Incumbent Board),
then the "Change of Control" shall be deemed void ab initio.

Voting Securities acquired by a Person that is not deemed to
constitute an "acquisition" of such Voting Securities by such Person by reason
or either of the provisos to paragraph (i) above shall nevertheless be deemed to
be Beneficially Owned by such person for purposes of determining whether the
"acquisition" of any additional Voting Securities by such Person (which
subsequent and, therefore, is considered to be an "acquisition" of Voting
Securities for purposes of paragraph (i)) would result in such Person exceeding
the Requisite Percentage of Voting Securities. The term "Person shall mean any
individual, firm corporation, partnership, joint venture, association, trust or
other entity as well as any "Affiliate" or "Associate" thereof (as such terms
are defined in the 1934 Act).

Notwithstanding the foregoing, a Change of Control shall not be deemed to
occur solely because the Requisite Percentage of the ten outstanding Voting
Securities is Beneficially Owned by (i) a trustee or other fiduciary holding
securities under one or more employee benefit plans or arrangements (or any
trust forming a part thereof) maintained by the Company or any Subsidiary or
(ii) any corporation which, immediately prior to its acquisition of such
interest, is owned directly or indirectly by the stockholders of the Company in
the same proportion as their ownership of stock in the Company immediately prior
to such acquisition. Furthermore, if the Executive's employment is terminated
and the Executive reasonable demonstrates that such termination (i) was at the
request of a third party who has indicated an intention or take steps reasonable
calculated to effect a Change of Control and who effectuates a Change of Control
or (ii) otherwise occurred in connection with, or in anticipation of, a Change
of Control which actually occurs, then for all purposes hereof, a Change of
Control shall be deemed to have occurred and the date of a Change of Control
with respect to the employment shall mean the date immediately prior to the
termination date.

3
<PAGE>

(c) A resignation for "Good Reason" shall mean the resignation of the
Executive from employment by the Company after (i) a material reduction or
adverse alteration in the nature of the Executive's position, responsibilities
or authorities, (ii) the Executive becoming the holder of a lesser office or
title than that held by him immediately prior to such change, (iii) any material
reduction of the Executive's compensation or benefits, (iv) the relocation of
the Executive's job more than thirty miles from his present location or (v) any
other material adverse change to the terms and conditions of the Executive's
employment or benefits, provided that, if the Executive shall consent in writing
to any event described in clauses (i) through (v) of this sentence, the
Executive'' subsequent resignation shall not be treated as a resignation for
Good Reason, unless a subsequent event described in such clauses to which
Executive did not consent occurs.

(d) "Permanent Disability" shall mean any physical or mental disability
which shall have rendered Executive unable to perform his duties hereunder for
120 consecutive days, or which, in the opinion of a licensed physician
reasonable satisfactory to the Company, is likely to render Executive unable to
perform his duties hereunder for such period.

(e) "Retirement" shall mean a termination of the Executive's employment
other than for Cause on or after the Executive's attainment of age 65.

3. Severance Benefit

If, during the term of this Agreement, (a) a Change of Control occurs, and
(b) within a two year period from the date of such Change of Control, either (i)
the Executive's employment with the Company and its subsidiaries is terminated
by the Company other than for Cause or on account of the Executive's death,
Permanent Disability or Retirement, or (ii) the Executive resigns for good
Reason, then the Company shall pay to the Executive a Severance Payment in an
amount equal to one and one-third (1-1/3) times the Executive's annual salary
for the year in which termination occurs. The Severance Payment shall be
payable in a single lump sum which shall be paid within thirty (30) days of the
termination of employment or resignation.

In addition to the Severance Payment, the Company shall provide health,
disability and life insurance in accordance with the plans maintained by the
Company for executives for a period of one (1) year from the date of termination
of the Executive's employment, provided that health, disability and life
insurance benefits shall cease if Executive becomes employed during such period
and receives similar benefits in connection with such employment.

Notwithstanding the foregoing, if there shall be a sale or disposition of
all or substantially all the assets of the Company and the Executive shall be
offered employment (at substantially the same level of Executive's authority,
responsibility, compensation and benefits with the Company before such sale),
with the purchaser or any of its affiliates ("Buyer") following such sale or
disposition, then the Executive shall not be entitled to a Severance Payment as
provided above. In that event, however, the Executive shall be entitled to a
Severance Payment if, within a twelve (12) month period, either (1) the
Executive's employment with the Buyer shall be terminated by the Buyer other
than for Cause or on account of the Executive's death, Permanent Disability or
Retirement, or 92) the Executive shall resign from the Buyer for Good Reason.
Such Severance Payment shall be computed on the basis of the Executive's salary
at the Company in the year in

4
<PAGE>

which Executive was last employed by the Company.
For purposes of this paragraph, the time of a termination of employment or
resignation and the definitions of "Permanent Disability", "Retirement",
resignation for "Good Reason" and "Cause" shall be construed with reference to
the Buyer instead of with reference to the Company.

4. No Reduction or Mitigation. The amounts payable pursuant to paragraph
3 of this Agreement shall be paid without reduction, other than as provided in
said paragraph, regarding less of any amounts of salary, compensation or other
amounts which the Executive could have obtained upon seeking other employment;
provided that the Company shall be permitted to make all such payments net of
any legally required tax withholdings.

5. Non-competition. The Executive agrees that during his employment and
for a period of one (1) year after the termination of his employment for any
reason, he shall not enter into or engage in or be connected with, or engage to
work for an individual, firm or corporation which is engaged in or connected
with, any business which is then in substantial competition with the Company in
the United States. The provisions of the last preceding sentence shall not
apply to the ownership of less than ten percent (10%) of the shares of any
corporation listed on any recognized exchange or traded over-the-counter. The
provisions of this paragraph shall survive a termination of this Agreement.

6. Non-Disclosure. The Executive agrees not to disclose either during the
period of his employment or at any time thereafter to any person, firm, or
corporation any information concerning the business or affairs of the Company
which he may have acquired in the course of, or as incident to, his employment
with the Company for his own benefit or to the detriment or intended detriment
of the Company. The provisions of this paragraph shall survive a termination of
this Agreement.

7. Binding Effect; Assignment. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and the Executive's heirs and
legal representatives and the Company's successors and assigns. This Agreement
is assignable by the Company to any corporate or other entity which acquires,
directly or indirectly, by merger, consolidation, purchase or otherwise, all or
substantially all of the assets of the Company. Upon any such assignment, and
the assumption by the assignee of all obligations hereunder, the Company shall
be released from all liability hereunder. This Agreement shall not be
assignable by the Executive.

8. Nonalienation of Benefits. Benefits payable under this Agreement shall
not be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, charge, garnishment, execution or levy of any
kind, either voluntary or involuntary, prior to actually being received by the
Executive; and any attempt to anticipate, alienate, sell, transfer, assign,
pledge, encumber, charge, garnish, execute on, levy or otherwise dispose of any
right to benefits payable hereunder, shall be void.

9. Severability. If all or any part of this Agreement is declared by any
court or governmental authority to be unlawful or invalid, such unlawfulness or
invalidity shall not serve to invalidate any portion of this Agreement not
declared to be unlawful or invalid. Any paragraph or part of a paragraph so
declared to be unlawful or invalid shall, if possible, be

5
<PAGE>

construed in a manner which will give effect to the terms of such paragraph or
part of a paragraph to the fullest extent possible while remaining lawful and
valid.

10. Entire Agreement; Amendment; Waiver. This Agreement represents the
entire agreement between the parties hereto with respect to the subject matter
hereof, and supersedes all prior or contemporaneous oral or written
negotiations, understandings and agreements between the parties hereto. This
Agreement shall not be altered, amended or modified except by written instrument
executed by the Company and Executive. A waiver of any term, covenant,
agreement or condition contained in this Agreement shall not be deemed a waiver
of any other tem, covenant, agreement or condition, and any waiver of any
default in any such term, covenant, agreement or condition shall not be deemed a
waiver of any later default thereof or of any other term, covenant, agreement or
condition.

11. Notices. all notices required by this Agreement shall be in writing
and delivered by hand or by first class registered or certified mail, postage
prepaid.

12. Legal Fees and Expenses. In the event that Executive undertakes legal
action against the Company to enforce its rights under the terms of this
Agreement and judgment is entered against the Company, the Company shall pay
legal fees and expenses incurred by the Executive.

13. Applicable Law. The provisions of this Agreement shall be interpreted
and construed in accordance with the laws of the State of Illinois, without
regard to its choice of law principles.

14. Extension. This Agreement shall be automatically extended for
additional Three-Year Terms if the Company does not give Executive written
notice of termination of this Agreement on or before 120 days prior to the
expiration of the Three Year Term then in effect.

IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.

UNR Industries, Inc.

By: Thomas Gildehaus
----------------

President

EXECUTIVE: James R. Cote
-------------

<PAGE>

10.1(b)

CHANGE OF CONTROL AGREEMENT
---------------------------

AGREEMENT made at Chicago, Illinois, on September 2, 1997, by and between
UNR Industries, Inc., (the "Company") and David LaRusso, (the "Executive").

Recitals
--------

A. The Executive is currently employed by the Company as Chief Financial
Officer UNR Rohn.

B. The Executive and the Company agree that it is desirable that the
Company provide greater employment security to the Executive, and, to
that end, the parties hereby enter into this Agreement.

In consideration of the mutual agreements herein set forth and for good and
valuable consideration, receipt of which is hereby acknowledged the parties
agree as follows:

1. Term of Agreement. Subject to the
provisions of paragraphs 2 and 3 of this Agreement, the term of this Agreement
shall be for a three year term (the "Three-Year Term") commencing on the date
hereof.

2. Definitions. For purposes of this
-----------
Agreement, the following definitions apply:

(b) "Change of Control" shall mean the occurrence of any of the following
events:

which all securityholders of the class of such Voting
Securities are treated on a pro rata basis; (ii) acquires the Voting Securities
directly from the Company; (iii) becomes the Beneficial Owner of more than the
Requisite Percentage of Voting Securities solely as a result of the acquisition
of Voting Securities by the Company which, by reducing the number of Voting
Securities outstanding, increases the proportional number of shares Beneficially
Owned by such Person; (iv) is the Company or any corporation or other Person of
which a majority of its voting power or its equity securities or equity interest
is owned directly or indirectly by the Company (a "Subsidiary", (v) acquires
Voting Securities in connection with a "on-Control Transaction" (as defined in
paragraph (iii) below) or (vi) acquires Voting Securities upon the exercise or
conversion of Voting Securities of another class which does not increase the
percentage of Voting Securities Beneficially Owned by such Person; and provided
further that the UNR Asbestos Disease Claims Trust (the "Trust") may acquire the
Beneficial Ownership of additional Voting Securities to the extent that
immediately prior to such acquisition the Trust Beneficially Owned at least 50%
of the outstanding Voting Securities; or

(iii) Approval by securityholders of the Company
of:

(a) A merger, consolidation or reorganization involving the
Company (a "Business Combination"), unless

(iii) no Person (other than the Company or any
Subsidiary, a trustee or other fiduciary holding securities under one or more
employee benefit plans or arrangements (or any trust forming a part thereof
maintained by the Company, the Surviving Corporation or any Subsidiary, or any
Person who, immediately prior to the Business Combination, had Beneficial
Ownership of the Requisite Percentage of the then outstanding Voting Securities)
upon consummation of the Business Combination is the Beneficial Owner of the
Requisite Percentage of the combined voting power for the election of directors
generally of the Surviving Corporation's then outstanding securities (a
transaction described in clauses (i) through (iii) shall be referred to as a
"Non-Control Transaction");

(b) A complete liquidation or dissolution of the Company; or

(c) An agreement for the sale or other disposition of all or
substantially all of the assets of the Company to any Person (other than a
transfer to a Subsidiary).

(e) "Retirement" shall mean a termination of the Executive's employment
other than for Cause on or after the Executive's attainment of age 65.

3. Severance Benefit
-----------------

4. No Reduction or Mitigation. The amounts
payable pursuant to paragraph 3 of this Agreement shall be paid without
reduction, other than as provided in said paragraph, regarding less of any
amounts of salary, compensation or other amounts which the Executive could have
obtained upon seeking other employment; provided that the Company shall be
permitted to make all such payments net of any legally required tax
withholdings.

5. Non-competition. The Executive agrees that
during his employment and for a period of one (1) year after the termination of
his employment for any reason, he shall not enter into or engage in or be
connected with, or engage to work for an individual, firm or corporation which
is engaged in or connected with, any business which is then in substantial
competition with the Company in the United States. The provisions of the last
preceding sentence shall not apply to the ownership of less than ten percent
(10%) of the shares of any corporation listed on any recognized exchange or
traded over-the-counter. The provisions of this paragraph shall survive a
termination of this Agreement.

6. Non-Disclosure. The Executive agrees not to
disclose either during the period of his employment or at any time thereafter to
any person, firm, or corporation any information concerning the business or
affairs of the Company which he may have acquired in the course of, or as
incident to, his employment with the Company for his own benefit or to the
detriment or intended detriment of the Company. The provisions of this
paragraph shall survive a termination of this Agreement.

7. Binding Effect; Assignment. This Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
the Executive's heirs and legal representatives and the Company's successors and
assigns. This Agreement is assignable by the Company to any corporate or other
entity which acquires, directly or indirectly, by merger, consolidation,
purchase or otherwise, all or substantially all of the assets of the Company.
Upon any such assignment, and the assumption by the assignee of all obligations
hereunder, the Company shall be released from all liability hereunder. This
Agreement shall not be assignable by the Executive.

8. Nonalienation of Benefits. Benefits payable
under this Agreement shall not be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, charge,
garnishment, execution or levy of any kind, either voluntary or involuntary,
prior to actually being received by the Executive; and any attempt to
anticipate, alienate, sell, transfer, assign, pledge, encumber, charge, garnish,
execute on, levy or otherwise dispose of any right to benefits payable
hereunder, shall be void.

9. Severability. If all or any part of this
Agreement is declared by any court or governmental authority to be unlawful or
invalid, such unlawfulness or invalidity shall not serve to invalidate any
portion of this Agreement not declared to be unlawful or invalid. Any paragraph
or part of a paragraph so declared to be unlawful or invalid shall, if possible,
be
<PAGE>

construed in a manner which will give effect to the terms of such paragraph
or part of a paragraph to the fullest extent possible while remaining lawful and
valid.

10. Entire Agreement; Amendment; Waiver. This
Agreement represents the entire agreement between the parties hereto with
respect to the subject matter hereof, and supersedes all prior or
contemporaneous oral or written negotiations, understandings and agreements
between the parties hereto. This Agreement shall not be altered, amended or
modified except by written instrument executed by the Company and Executive. A
waiver of any term, covenant, agreement or condition contained in this Agreement
shall not be deemed a waiver of any other tem, covenant, agreement or condition,
and any waiver of any default in any such term, covenant, agreement or condition
shall not be deemed a waiver of any later default thereof or of any other term,
covenant, agreement or condition.

11. Notices. all notices required by this
Agreement shall be in writing and delivered by hand or by first class registered
or certified mail, postage prepaid.

12. Legal Fees and Expenses. In the event that
Executive undertakes legal action against the Company to enforce its rights
under the terms of this Agreement and judgment is entered against the Company,
the Company shall pay legal fees and expenses incurred by the Executive.

13. Applicable Law. The provisions of this
Agreement shall be interpreted and construed in accordance with the laws of the
State of Illinois, without regard to its choice of law principles.

14. Extension. This Agreement shall be
automatically extended for additional Three-Year Terms if the Company does not
give Executive written notice of termination of this Agreement on or before 120
days prior to the expiration of the Three Year Term then in effect.

IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.

UNR Industries, Inc.

By: Brian B. Pemberton
------------------

Brian B. Pemberton, President
and CEO

EXECUTIVE: David V. LaRusso
----------------

<PAGE>

10.1(c)
- --------------------------------------------------------------------------------
ROHN Industries, Inc.

6718 W. Plan Road
P.O. Box 2000
Peoria, IL 61656
- --------------------------------------------------------------------------------

July 24, 1998

Mr. Brian B. Pemberton
President & CEO
ROHN Industries, Inc.
6718 W. Plank Road
Peoria, IL 61604

Re: Employment terms

Dear Brian:

This letter is to confirm our mutual agreement to terminate the attached
Change of Control Agreement, dated September 2, 1998, that was a part of my
prior employment terms with ROHN Industries, Inc. This mutual termination is in
exchange for the new employment terms that are set forth in your letter to me
dated July 24, 1998, a copy of which is also attached.

I look forward to providing continuing service to ROHN.

Very truly yours,

/s/ David V. LaRusso
----------------------------------------
David V. LaRusso
Vice President & Chief Financial Officer

TWK/ms1444
Attachments

<PAGE>

10.3(a)
- --------------------------------------------------------------------------------
ROHN Industries, Inc.

6718 W. Plan Road
P.O. Box 2000
Peoria, IL 61656
July 24, 1998
- --------------------------------------------------------------------------------

By Hand Delivery
- ----------------

Mr. David V. LaRusso
12511 Triple Oaks Drive
St. Louis, MO 63128

Dear Dave:

This letter is to confirm the conversation that we had today pertaining to
compensation issues.

I have agreed with the Chairman of the Compensation Committee not to
request an increase in the base salary for any of the Executive Officers of the
Company, including myself, until on or after January 1, 2001. The opportunity
for increased earnings until January 1, 2001, will relate to our combined and
individual performances under the bonus plan, which as you know was modified in
March of this year to provide you with greater bonus earnings potential.

In consideration of the above, and your continued service to the Company, I
am pleased to extend to you an additional term of your employment with ROHN
Industries, Inc. ("ROHN"). As you know, your employment is at-will and either
party may terminate the employment relationship at any time for any reason.
However, in the event that your employment were to be terminated by ROHN without
cause during the next three years, you will be entitled to a severance payment
equal to one year's base salary then in effect plus the amount of the target
bonus for the year in which termination occurred. In the event you are
terminated for cause at any time, no severance or termination payment shall be
made. The term "cause" as used herein shall mean an act or acts of dishonesty in
the course of employment, the conviction of a felony or the failure to perform
duties or responsibilities reasonably assigned by me or the Board of Directors.

We appreciate all that you do for ROHN and we look forward to your
continued service.

Very truly yours,

/s/ Brian B. Pemberton
----------------------
Brian B. Pemberton
President & CEO

BP/tk1419

<PAGE>
10.3(b)
- --------------------------------------------------------------------------------
ROHN Industries, Inc.

6718 W. Plan Road
P.O. Box 2000
Peoria, IL 61656
July 24, 1998
- --------------------------------------------------------------------------------

July 24, 1998

By Hand Delivery
- ----------------

Mr. Richard L. Rohn
6092 Brookhill Circle
Birmingham, AL 35242

Dear Richard:

This letter is to confirm the conversation that we had today pertaining to
compensation issues.

We appreciate all that you do for ROHN and we look forward to your
continued service.

Very truly yours,

/s/ Brian B. Pemberton
----------------------
Brian B. Pemberton
President & CEO

BP/tk1419

<PAGE>
10.3(c)
- --------------------------------------------------------------------------------
ROHN Industries, Inc.

6718 W. Plan Road
P.O. Box 2000
Peoria, IL 61656
July 24, 1998
- --------------------------------------------------------------------------------

July 24, 1998

By Hand Delivery
- ----------------

Mr. Timothy W. Kirk
340 E. Maywood
Morton, IL 61550

Dear Tim:

This letter is to confirm the conversation that we had today pertaining to
compensation issues.

We appreciate all that you do for ROHN and we look forward to your
continued service.

Very truly yours,

/s/ Brian B. Pemberton
----------------------
Brian B. Pemberton
President & CEO

BP/tk1419

<PAGE>
10.3(d)
- --------------------------------------------------------------------------------
ROHN Industries, Inc.

6718 W. Plan Road
P.O. Box 2000
Peoria, IL 61656
July 24, 1998
- --------------------------------------------------------------------------------

July 24, 1998

By Hand Delivery
- ----------------

Mr. Craig A. Ahlstrom
6718 W. Plank Road
Peoria, IL 61604

Dear Craig:

This letter is to confirm the conversation that we had today pertaining to
compensation issues.

We appreciate all that you do for ROHN and we look forward to your
continued service.

Very truly yours,

/s/ Brian B. Pemberton
----------------------
Brian B. Pemberton
President & CEO

BP/tk1419

<PAGE>

10.4(a)

INDEMNIFICATION AGREEMENT

THIS AGREEMENT, made and entered into this 20th day of June, 1990
("Agreement"), by and between UNR INDUSTRIES, INC., a Delaware corporation
("Corporation", which term shall include any one or more of its subsidiaries
where appropriate), and CHARLES M. BRENNAN III ("Indemnitees"):

WHEREAS, highly competent persons are becoming more reluctant to serve
corporations as directors or officers or in other capacities unless they are
provided with adequate protection through insurance or adequate indemnification
against inordinate risks of claims and actions against them arising out of their
service to, and activities on behalf of, such corporations; and

WHEREAS, the current impracticability of obtaining adequate insurance and
the uncertainties relating to indemnification have increased the difficulty of
attracting and retaining such persons;

WHEREAS, the Board of Directors of the Corporation (the "Board") has
determined that the difficulty in attracting and retaining such persons is
detrimental to the best interests of the Corporation's stockholders and that the
Corporation should act to assure such persons that there will be increased
certainty of such protection in the future;

WHEREAS, it is reasonable, prudent and necessary for the Corporation
contractually to obligate itself to indemnify such persons to the fullest extent
permitted by applicable law so that they will serve or continue to serve the
Corporation free from undue concern that they will not be so indemnified; and

WHEREAS, Indemnitee is willing to serve, continue to serve and/or to
undertake additional service for or on behalf of the Corporation on the
condition that he be so indemnified;

NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Corporation and Indemnitee do hereby covenant and agree as
follows:

1. Services by Indemnitee. Indemnitee agrees to serve or continue to
serve as a director and/or officer of the Corporation. This Agreement shall not
impose any obligation on the Indemnitee or the Corporation to continue the
Indemnitee's position with the Corporation beyond any period otherwise
applicable.

2. General. The Corporation shall indemnify, and shall advance Expenses
(as hereinafter defined) to, Indemnitee as provided in this Agreement and to the
fullest extent permitted by law.

3. Proceedings other Than Proceedings by or in the Right of the
Corporation. Indemnitee shall be entitled to the rights of indemnification
provided in this Section 3 if, by
<PAGE>

reason of his Corporate Status (as hereinafter
defined), he is, or is threatened to be made, a party to any threatened, pending
or completed Proceeding (as hereinafter defined), other than a Proceeding by or
in the right of the Corporation. Pursuant to this Section 3, Indemnitee shall
be indemnified against Expenses, judgements, fines and amounts paid in
settlement actually and reasonably incurred by him or on his behalf in
connection with such Proceeding or any claim, issue or matter therein, 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 Proceeding, had no reasonable cause to believe his conduct was
unlawful.

4. Proceedings by or in the Right of the Corporation. Indemnitee shall be
entitled to the rights of indemnification provided in this Section 4 if, by
reason of his Corporate Status, he is, or is threatened to be made, a party to
any threatened, pending or completed Proceeding brought by or in the right of
the Corporation to procure a judgment in its favor. Pursuant to this Section 4,
Indemnitee shall be indemnified against Expenses actually and reasonably
incurred by him or on his behalf in connection with such 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. Notwithstanding the foregoing, no
indemnification against such Expenses shall be made in respect of any claim,
issue or matter as to which Indemnitee shall have been adjudged to be liable to
the Corporation if such indemnification is not permitted by Delaware or other
applicable law; provided, however, that indemnification against Expenses shall
nevertheless be made by the Corporation in such event to the extent that the
Court of Chancery of the State of Delaware, or the court in which such
proceeding shall have been brought or is pending, shall determine.

5. Indemnification for Expenses of a Party who is Wholly or Partly
Successful. Notwithstanding any other provision of this Agreement, to the
extent that Indemnitee is, by reason of his Corporate Status, a party to and is
successful, on the merits or otherwise, in any Proceeding, he shall be
indemnified against all Expenses actually and reasonably incurred by him or on
his behalf in connection therewith. If Indemnitee is not wholly successful in
such Proceeding but is successful, on the merits or otherwise, as to one or more
but less than all claims, issues or matters in such Proceeding, the Corporation
shall indemnify Indemnitee against all Expenses actually and reasonably incurred
by him or on his behalf in connection with each successfully resolved claim,
issue or matter. For purposes of this Section 5 and without limitation, the
termination of any claim, issue or matter in such a Proceeding by dismissal or
withdrawal with or without prejudice, shall be deemed to be a successful result
as to such claim, issue or matter.

6. Advance of Expenses. The Corporation shall advance all reasonable
Expenses incurred by or on behalf of Indemnitee in connection with any
Proceeding within twenty (20) days after the receipt by the Corporation of a
statement or statements from Indemnitee requesting such advance or advances from
time to time, whether prior to or after final disposition of such Proceeding.
Such statement or statements shall reasonably evidence the Expenses incurred by
Indemnitee and shall include or be preceded or accompanied by an undertaking by
or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately
be determined that Indemnitee is not entitled to be indemnified against such
Expenses. Unpaid expenses shall bear

2
<PAGE>

interest accruing at the prime rate of interest from the twenty-first (21) day
after receipt by the Corporation of such statement until said expenses are paid.

7. Procedure for Determination of Entitlement to Indemnification.

(a) To obtain indemnification under this Agreement, Indemnitee shall
submit to the Corporation a written request, including therein or therewith such
documentation and information as is reasonably available to Indemnitee and is
reasonably necessary to determine whether and to what extent Indemnitee is
entitled to indemnification. The Secretary of the Corporation shall, promptly
upon receipt of such a request for indemnification, advise the Board and counsel
for the Corporation in writing that Indemnitee has requested indemnification.

(b) Upon written request by Indemnitee for indemnification pursuant to
Section 7(a) hereof, a determination, if required by applicable law, with
respect to Indemnitee's entitlement thereto shall be made in the specific case:
(i) if a Change in Control (as hereinafter defined) shall have occurred, by
Independent Counsel (as hereinafter defined) in a written opinion to the Board,
a copy of which shall be delivered to Indemnitee (unless Indemnitee shall
request that such determination be made by the Board or the stockholders, in
which case the determination shall be made in the manner provided below in
clause (ii) or (iii); (ii) if a Change of Control shall not have occurred, (A)
by the Board by a majority vote of a quorum consisting of Disinterested
Directors (as hereinafter defined), (B) if a quorum of the Board consisting of
Disinterested Directors is not obtainable or, even if obtainable, such quorum of
Disinterested Directors so directs, by Independent Counsel in a written opinion
to the Board, a copy of which shall be delivered to Indemnitee, or (C) by the
stockholders of the Corporation; or (iii) as provided in Section 8(b) of this
Agreement; and, if it is so determined that Indemnitee is entitled to the
indemnification, payment to Indemnitee shall be made within ten (10) days after
such determination. Indemnitee shall cooperate with the person, persons or
entity making such determination with respect to Indemnitee's entitlement to
indemnification, including providing to such person, persons or entity upon
reasonable advance request any documentation or information that is not
privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such determination. Any
costs or expenses (including attorneys' fees and disbursements) incurred by
Indemnitee in so cooperating shall be borne by the Corporation "irrespective of
the determination as to Indemnitee's entitlement to indemnification) and the
Corporation hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

(c) If the determination of entitlement to indemnification is to be
made by Independent Counsel pursuant to Section 7(b) of this Agreement, the
Independent Counsel shall be selected as provided in this Section 7(c). If a
Change of Control shall not have occurred, the Independent Counsel shall be
selected by the Board, and the Corporation shall give written notice to
Indemnitee advising him of the identity of the Independent Counsel so selected.
If a Change of Control shall have occurred, the Independent Counsel shall be
selected by Indemnitee (unless Indemnitee shall request that such selection be
made by the Board, in which event the preceding sentence shall apply), and
Indemnitee shall give written notice to the Corporation advising it of the
identity of the Independent Counsel so selected. In either event, Indemnitee or

3
<PAGE>

the Corporation, as the case may be, may, within seven (7) days after such
written notice of selection shall have been given, deliver to the Corporation or
to Indemnitee, as the case may be, a written objection to such selection. Such
objection may be asserted only on the ground that the Independent Counsel so
selected does not meet the requirement of "Independent Counsel" as defined in
Section 14 of this Agreement, and the objection shall set forth with
particularity the factual basis of such assertion. If such written objection is
made, the Independent Counsel so selected may not serve as Independent Counsel
unless and until a court has determined that such objection is without merit.
If, within twenty (20) days after submission by Indemnitee of a written request
for indemnification pursuant to Section 7(a) of this Agreement, no Independent
Counsel shall have been selected or, if selected, shall have been objected to,
in accordance with this Section 7(c), either the Corporation or Indemnitee may
petition the Court of Chancery of the State of Delaware or other court of
competent jurisdiction for resolution of any objection that shall have been made
by the Corporation or Indemnitee to the other's selection of Independent Counsel
and/or for the appointment as Independent Counsel of-a person selected by the
Court or by such other person as the Court shall designate, and the person with
respect to whom an objection is favorably resolved or the person as so appointed
shall act as Independent Counsel under Section 7(b) of this Agreement. The
Corporation shall pay any and all reasonable fees and expenses of Independent
Counsel incurred by such Independent Counsel in connection with acting pursuant
to Section 7(b) of this Agreement, and the Corporation shall pay all reasonable
fees and expenses incident to the procedures of this Section 7(c), regardless of
the manner in which such Independent Counsel was selected or appointed. Upon
the due commencement of any judicial proceeding or arbitration pursuant to
Section 9(a)(iii) of this Agreement, Independent Counsel shall be discharged and
relieved of any further responsibility in such capacity (subject to the
applicable standards of professional conduct then prevailing).

8. Presumptions and Effect of Certain Proceedings.

(a) If a Change of Control shall have occurred, in making a
determination with respect to entitlement to indemnification hereunder, the
person, persons or entity making such determination shall presume that
Indemnitee is entitled to indemnification under this Agreement if Indemnitee has
submitted a request for indemnification in accordance with Section 7(a) of this
Agreement, and the Corporation shall have the burden of proof to overcome that
presumption in connection with the making by any person, persons or entity of
any determination contrary to that presumption.

(b) If the person, persons or entity empowered or selected under
Section 7 of this Agreement to determine whether Indemnitee is entitled to
indemnification shall not have made such determination within sixty (60) days
after receipt by the Corporation of the request therefor, the requisite
determination of entitlement to indemnification shall be deemed to have been
made and Indemnitee shall be entitled to such indemnification, absent (i) a
misstatement by Indemnitee of a material fact, or an omission of a material fact
necessary to make Indemnitee's statement not materially misleading, in
connection with the request for indemnification, or (ii) a prohibition of such
indemnification under applicable law; provided, however, that such sixty-day
period may be extended for a reasonable time, not to exceed an additional thirty
(30) days, if the person, persons or entity making the determination with
respect to entitlement to indemnification

4
<PAGE>

in good faith requires such additional time for the obtaining or evaluating of
documentation and/or information relating thereto; and provided, further, that
the foregoing provisions of this Section 8(b) shall not apply (i) if the
determination of entitlement to indemnification is to be made by the
stockholders pursuant to Section 7(b) of this Agreement and if (A) within
fifteen (15) days after receipt by the Corporation of the request such
determination the Board has resolved to submit such determination to the
stockholders for their consideration at an annual meeting thereof to be held
within seventy-five (75) days after such receipt and such determination is made
threat, or (B) a special meeting of stockholders is called within fifteen (15)
days after such receipt for the purpose of making such determination, such
meeting is held for such purpose within sixty (60) days after having been so
called and such determination of entitlement is made thereat, or (ii) if the
determination of entitlement to indemnification is to be made by Independent
Counsel pursuant to Section 7(b) of this Agreement.

(c) The termination of any Proceeding or of any claim, issue or matter
therein by judgment, order, settlement or conviction, or upon a plea of nolo
contendere or its equivalent, shall not (except as otherwise expressly provided
in this Agreement) of itself adversely affect the right of Indemnitee to
indemnification or create a presumption that Indemnitee did not act in good
faith and in a manner that he reasonably believed to be in or not opposed to the
best interests of the Corporation or, with respect to any criminal Proceeding,
that Indemnitee had reasonable cause to believe that his conduct was unlawful.

9. Remedies and Indemnitee.

(a) If (i) a determination is made pursuant to Section 7 of this
Agreement that Indemnitee is not entitled to indemnification under this
Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 6
of this Agreement, (iii) the determination of entitlement to indemnification is
to be made by Independent Counsel pursuant to Section 7(b) of this Agreement and
such determination shall not have been made and delivered in a written opinion
within ninety (90) days after receipt by the Corporation of the request for
indemnification, (iv) payment of indemnification is not made pursuant to Section
5 of this Agreement within ten (10) days after receipt by the Corporation of a
written request therefor or (v) payment of indemnification or such determination
is deemed to have been made pursuant to Section 8 of this Agreement, Indemnitee
shall be entitled to an adjudication in an appropriate court of the State of
Delaware, or in any other court of competent jurisdiction, of his entitlement to
such indemnification or advancement of Expenses. Alternatively, Indemnitee, at
his option, may seek an award in arbitration to be conducted by a single
arbitrator, which arbitrator shall be a member of the bar in the State of
Illinois, pursuant to the rules of the American Arbitration Association.
Indemnitee shall commence such proceeding seeking an adjudication or an award in
arbitration within 180 days following the date on which Indemnitee first has the
right to commence such proceeding pursuant to this Section 9(a). The
Corporation shall not oppose Indemnitee's right to any such adjudication or
award in arbitration.

(b) In the event that a determination shall have been made pursuant to
Section 7 of this Agreement that Indemnitee is not entitled to indemnification,
any judicial proceeding or arbitration commenced pursuant to this Section 9
shall be conducted in all respects as a de novo

5
<PAGE>

trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by
reason of that adverse determination. If a Change of Control shall have
occurred, in any judicial proceeding or arbitration commenced pursuant to this
Section 9 the Corporation shall have the burden of proving that Indemnitee is
not entitled to indemnification or advancement of Expenses, as the case may be.

(c) If a determination shall have been made or deemed to have been
made pursuant to Section 7 or 8 of this Agreement that Indemnitee is entitled to
indemnification, the Corporation shall be bound by such determination in any
judicial proceeding or arbitration commenced pursuant to this Section 9, absent
(i) a misstatement by Indemnitee of a material fact, or an omission of a
material fact necessary to make Indemnitee's statement not materially
misleading, in connection with the request for indemnification or (ii) a
prohibition of such indemnification under applicable law.

(d) The Corporation shall be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to this Section 9 that the
procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court or before any such arbitrator
that the Corporation is bound by all the provisions of this Agreement.

(e) If Indemnitee, pursuant to this Section 9, seeks a judicial
adjudication of or an award in arbitration to enforce his rights under, or to
recover damages for breach of, this Agreement, Indemnitee shall be entitled to
recover from the Corporation, and shall be indemnified by the Corporation
against, any and all expenses (of the types described in the definition of
Expenses in Section 14 of this Agreement) actually and reasonably incurred by
him in such judicial adjudication or arbitration, but only if he prevails
therein. If it shall be determined in said judicial adjudication or arbitration
that Indemnitee is entitled to receive part but not all of the indemnification
or advancement of Expenses sought, the expenses incurred by Indemnitee in
connection with such judicial adjudication or arbitration shall be appropriately
prorated.

10. Security.

(a) To the extent requested by the Indemnitee and approved by the
Board, the Corporation may at any time and from time to time provide security to
the Indemnitee for the Corporation's obligations hereunder through an
irrevocable bank line of credit, funded trust or other collateral. Any such
security, once provided to the Indemnitee, may not be revoked or released
without the prior written consent of Indemnitee.

(b) For each Proceeding in which Indemnitee is entitled to
indemnification, the Corporation, at the time such Proceeding is commenced,
shall deposit a minimum of One Million Dollars ($1,000,000) in an escrow account
to fund any Expenses, judgments or fines imposed in such Proceeding or any
amount paid or payable pursuant to an agreement of settlement of such
Proceeding, for or on behalf of Indemnitee pursuant to this Agreement. In the
event a single Proceeding involves more than one Indemnitee, only one such
escrow account shall be established with respect to such Proceeding. The
Corporation shall maintain a minimum

6
<PAGE>

balance in each such escrow account of One Million Dollars ($1,000,000) and
shall increase such amount from time to time as it shall deem necessary or
desirable to meet the Corporation's anticipated obligations in connection with
such Proceeding, pursuant to this Agreement. The amount deposited by the
Corporation in any such escrow account shall not limit the Corporation's
liability under this Agreement. At the termination of any such Proceeding, after
payment of all Expenses, judgments, fines or settlement amounts, the balance of
funds remaining in the escrow account established for such Proceeding shall be
returned to the Corporation for its general purposes and such escrow account
shall be closed.

11. Non-Exclusivity; Duration of Agreement; Insurance; Subrogation.

(a) The rights of indemnification and to receive advancement of
Expenses as provided by this Agreement shall not be deemed exclusive of any
other rights to which Indemnitee may at any time be entitled under applicable
law, the Corporation's certificate of incorporation or bylaws, any other
agreement, a vote of stockholders or a resolution of directors, or otherwise.
This Agreement shall continue until and terminate upon the latter of: (a) ten
(10) years after the date that Indemnitee shall have ceased to serve as a
director and officer of the Corporation or fiduciary of any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise
that Indemnitee served at the request of the Corporation; or (b) the final
termination of all pending Proceedings in respect of which Indemnitee is granted
rights of indemnification or advancement of Expenses hereunder and of any
proceeding commenced by Indemnitee pursuant to Section 9 of this Agreement
relating thereto. This Agreement shall be binding upon the Corporation and its
successors and assigns and shall inure to the benefit of Indemnitee and his
heirs, executors and administrators.

(b) If the Corporation maintains an insurance policy or policies
providing liability insurance for directors or officers of the Corporation or
fiduciaries of any other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise that such person serves at the request
of the Corporation, Indemnitee shall be covered by such policy or policies in
accordance with the terms thereof to the maximum extent of the coverage
available for any such director or officer under such policy or policies.

(c) If any payment is made under this Agreement, the Corporation shall
be subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee, who shall execute all papers required and take all action necessary
to secure such rights, including execution of such documents as are necessary to
enable the Corporation to bring suit to enforce such rights.

(d) The Corporation shall not be liable under this Agreement to make
any payment of amounts otherwise indemnifiable hereunder if and to the extent
that Indemnitee has otherwise actually received such payment under any insurance
policy, contract, agreement or otherwise.

12. Severability. If any provision or provisions of this Agreement shall
be held to be invalid, illegal or unenforceable for any reason whatsoever (a)
the validity, legality and

7
<PAGE>

enforceability of the remaining provisions of this Agreement (including, without
limitation, each portion of any Section of this Agreement containing any such
provision held to invalid, illegal or unenforceable, that is not itself invalid,
illegal or unenforceable) shall not in any way be affected or impaired thereby;
and (b) to the fullest extent possible, the provisions of this Agreement
(including, without limitation, each portion of any Section of this Agreement
containing any such provision held to be invalid, illegal or unenforceable, that
is not itself invalid, illegal or unenforceable) shall be construed so as to
give effect to the intent manifested by the provision held invalid, illegal or
unenforceable.

13. Exception to Right of Indemnification or Advancement of Expenses.
Notwithstanding any other provision of this Agreement, Indemnitee shall not be
entitled to indemnification or advancement of Expenses under this Agreement with
respect to any Proceeding, or any claim, issue or matter therein, brought or
made by him against the Corporation, except as may be provided in Section 9(e)
of this Agreement.

14. Definitions. For purposes of this Agreement:

(a) "Change in Control" means a change in control of the Corporation
of a nature that would be required to be reported in response to Item 5(f) of
Schedule 14A of Regulation 14A (or in response to any similar item or any
similar schedule or form) promulgated under the Securities Exchange Act of 1934,
as amended (the "Act"), whether or not the Corporation is then subject to such
reporting requirement; provided, however, that, without limitation, such a
Change in Control shall be deemed to have occurred if (i) any "person" (as such
term is used in Sections 13(d) and 14(d) of the Act) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Act), directly or
indirectly, of securities of the Corporation representing 20% or more of the
combined voting power of the Corporation's then outstanding securities without
the prior approval of at least two-thirds of the members of the Board in office
immediately prior to such person attaining such percentage interest; (ii) the
Corporation is a party to a merger, consolidation, sale of assets or other
reorganization, or a proxy contest, as a consequence of which members of the
Board in office immediately prior to such transaction or event constitute less
than a majority of the Board thereafter; or (iii) during any period of two (2)
consecutive years, individuals who at the beginning of such period constituted
the Board (including for this purpose any new director whose election or
nomination for election by the Corporation's stockholders was approved by a vote
of at least two-thirds of the directors then still in office who were directors
at the beginning of such period) cease for any reason to constitute at least a
majority of the Board.

(b) "Corporate Status" describes the status of a person who is or was
or has agreed to become a director of the Corporation, or is or was an officer,
employee, agent or fiduciary of the Corporation or of any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise
that such person is or was serving at the request of the Corporation.

8
<PAGE>

(c) "Disinterested Director" means a director of the Corporation who
is not and was not a party to the Proceeding in respect of which indemnification
is sought by Indemnitee.

(d) "Expenses" shall include all reasonable attorneys' fees,
retainers, court costs, transcript costs, fees of experts and witnesses, travel
expenses, duplicating costs, printing and binding costs, telephone charges,
postage, delivery service fees, and all other disbursements or expenses of the
type customarily incurred in connection with prosecuting, defending, preparing
to prosecute or defend or investigating a Proceeding.

(e) "Independent Counsel" means a law firm, or a member of a law firm,
that is experienced in matters of corporation law and neither at the time of
designation is, nor in the five years immediately preceding such designation
was, retained to represent: (i) the Corporation or Indemnitee in any matter
material to either such party or (ii) any other party to the Proceeding giving
rise to a claim for indemnification hereunder. Notwithstanding the foregoing,
the term "Independent Counsel" shall not include any person who, under the
applicable standards of professional conduct then prevailing, would have a
conflict of interest in representing either the Corporation or Indemnitee in an
action to determine Indemnitee's rights under this Agreement arising on or after
the date of this Agreement, regardless of when the Indemnitee's act or failure
to act occurred.

(f) "Proceeding" includes any action, suit, arbitration, alternate
dispute resolution mechanism, investigation, administrative hearing an any other
proceeding (including any appeals from any of the foregoing) whether civil,
criminal, administrative or investigative, except one initiated by an Indemnitee
pursuant to Section 9 of this Agreement to enforce his rights under this
Agreement

15. Headings. The headings of the Sections of this Agreement are inserted
for convenience of reference only and shall not be deemed to constitute part of
this Agreement or to affect the construction thereof.

16. Modification and Waiver. This Agreement may be amended from time to
time to reflect changes in Delaware law or for other reasons. No supplement,
modification or amendment of this Agreement shall be binding unless executed in
writing by both of the parties hereto. No waiver of any of the provisions of
this Agreement shall be deemed or shall constitute a waiver of any other
provision hereof (whether or not similar) nor shall waiver constitute a
continuing waiver.

17. Notice by Indemnitee. Indemnitee agrees promptly to notify the
Corporation in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document relating to any Proceeding
or matter that may be subject to indemnification or advancement of Expenses
covered hereunder; provided, however, that the failure to give any such notice
shall not disqualify the Indemnitees from indemnification hereunder.

9
<PAGE>

18. Notices. All notices requests, demands, and other communications
hereunder shall be in writing and shall be deemed to have been duly given (i) if
delivered by hand and receipted for by the party to whom said notice or other
communication shall have been directed, at the time of delivery, or (ii) if
mailed by certified mail (return receipt requested) with postage prepaid, on the
third business day after the date on which it is so mailed, and addressed:

(a) if to Indemnitee, to:

C.M. Brennan III
Wolcott Farm
Little St. Mary's Road
Mettawa, IL 60048

(b) if to the Corporation, to:

UNR INDUSTRIES, INC.
332 South Michigan Avenue
Suite 300
Chicago, Illinois 60604
Attention: Secretary

or to such other address as may have been furnished by like notice to Indemnitee
by the Corporation or to the Corporation by Indemnitee, as the case may be.

19. Governing Law. The parties agree that this Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the
State of Delaware applicable to contracts made and to be performed in such state
without giving effect to the principles of conflicts of laws.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above set forth.

By: /s/ William Andrews
-------------------
President

INDEMNITEE:

/s/ C.M. Brennan III
--------------------

<PAGE>

10.4(b)

INDEMNIFICATION AGREEMENT

WHEREAS, the current impracticability of obtaining adequate insurance and
the uncertainties relating to indemnification have increased the difficulty of
attracting and retaining such persons;

WHEREAS, Indemnitee is willing to serve, continue to serve and/or to
undertake additional service for or on behalf of the Corporation on the
condition that he be so indemnified;

NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Corporation and Indemnitee do hereby covenant and agree as
follows:

2. General. The Corporation shall indemnify, and shall advance Expenses
(as hereinafter defined) to, Indemnitee as provided in this Agreement and to the
fullest extent permitted by law.

3. Proceedings other Than Proceedings by or in the Right of the
Corporation. Indemnitee shall be entitled to the rights of indemnification
provided in this Section 3 if, by
<PAGE>

interest accruing at the prime rate of
interest from the twenty-first (21) day after receipt by the Corporation of such
statement until said expenses are paid.

7. Procedure for Determination of Entitlement to
Indemnification.

8. Presumptions and Effect of Certain Proceedings.

9. Remedies and Indemnitee.

trial, or arbitration, on the
merits and Indemnitee shall not be prejudiced by reason of that adverse
determination. If a Change of Control shall have occurred, in any judicial
proceeding or arbitration commenced pursuant to this Section 9 the Corporation
shall have the burden of proving that Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be.

10. Security.

balance in each such escrow account of One
Million Dollars ($1,000,000) and shall increase such amount from time to time as
it shall deem necessary or desirable to meet the Corporation's anticipated
obligations in connection with such Proceeding, pursuant to this Agreement. The
amount deposited by the Corporation in any such escrow account shall not limit
the Corporation's liability under this Agreement. At the termination of any
such Proceeding, after payment of all Expenses, judgments, fines or settlement
amounts, the balance of funds remaining in the escrow account established for
such Proceeding shall be returned to the Corporation for its general purposes
and such escrow account shall be closed.

11. Non-Exclusivity; Duration of Agreement; Insurance;
Subrogation.

12. Severability. If any provision or provisions of this Agreement shall
be held to be invalid, illegal or unenforceable for any reason whatsoever (a)
the validity, legality and
<PAGE>

enforceability of the remaining provisions of this
Agreement (including, without limitation, each portion of any Section of this
Agreement containing any such provision held to invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable) shall not
in any way be affected or impaired thereby; and (b) to the fullest extent
possible, the provisions of this Agreement (including, without limitation, each
portion of any Section of this Agreement containing any such provision held to
be invalid, illegal or unenforceable, that is not itself invalid, illegal or
unenforceable) shall be construed so as to give effect to the intent manifested
by the provision held invalid, illegal or unenforceable.

14. Definitions. For purposes of this Agreement:

(c) "Disinterested Director" means a director of the Corporation who
is not and was not a party to the Proceeding in respect of which indemnification
is sought by Indemnitee.

Darius W. Gaskins, Jr.

130 County Road

Ipswich, MA 01938

(d) if to the Corporation, to:

UNR INDUSTRIES, INC.

332 South Michigan Avenue

Suite 300

Chicago, Illinois 60604

Attention: Secretary

or to such other address as may have been furnished by like notice to Indemnitee
by the Corporation or to the Corporation by Indemnitee, as the case may be.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above set forth.

By: /s/ William Andrews
-------------------
President

INDEMNITEE:

/s/ Darius W. Gaskins, Jr.
--------------------------

<PAGE>

10.4(c)

INDEMNIFICATION AGREEMENT

WHEREAS, the current impracticability of obtaining adequate insurance and
the uncertainties relating to indemnification have increased the difficulty of
attracting and retaining such persons;

WHEREAS, Indemnitee is willing to serve, continue to serve and/or to
undertake additional service for or on behalf of the Corporation on the
condition that he be so indemnified;

NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Corporation and Indemnitee do hereby covenant and agree as
follows:

2. General. The Corporation shall indemnify, and shall advance Expenses
(as hereinafter defined) to, Indemnitee as provided in this Agreement and to the
fullest extent permitted by law.

3. Proceedings other Than Proceedings by or in the Right of the
Corporation. Indemnitee shall be entitled to the rights of indemnification
provided in this Section 3 if, by
<PAGE>

reason of his Corporate Status (as hereinafter defined), he is, or is threatened
to be made, a party to any threatened, pending or completed Proceeding (as
hereinafter defined), other than a Proceeding by or in the right of the
Corporation. Pursuant to this Section 3, Indemnitee shall be indemnified against
Expenses, judgements, fines and amounts paid in settlement actually and
reasonably incurred by him or on his behalf in connection with such Proceeding
or any claim, issue or matter therein, 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 Proceeding, had no reasonable
cause to believe his conduct was unlawful.

2
<PAGE>

interest accruing at the prime rate of
interest from the twenty-first (21) day after receipt by the Corporation of such
statement until said expenses are paid.

7. Procedure for Determination of Entitlement to
Indemnification.

3
<PAGE>

8. Presumptions and Effect of Certain Proceedings.

4
<PAGE>

in good faith requires such additional
time for the obtaining or evaluating of documentation and/or information
relating thereto; and provided, further, that the foregoing provisions of this
Section 8(b) shall not apply (i) if the determination of entitlement to
indemnification is to be made by the stockholders pursuant to Section 7(b) of
this Agreement and if (A) within fifteen (15) days after receipt by the
Corporation of the request such determination the Board has resolved to submit
such determination to the stockholders for their consideration at an annual
meeting thereof to be held within seventy-five (75) days after such receipt and
such determination is made threat, or (B) a special meeting of stockholders is
called within fifteen (15) days after such receipt for the purpose of making
such determination, such meeting is held for such purpose within sixty (60) days
after having been so called and such determination of entitlement is made
thereat, or (ii) if the determination of entitlement to indemnification is to be
made by Independent Counsel pursuant to Section 7(b) of this Agreement.

9. Remedies and Indemnitee.

5
<PAGE>

trial, or arbitration, on the
merits and Indemnitee shall not be prejudiced by reason of that adverse
determination. If a Change of Control shall have occurred, in any judicial
proceeding or arbitration commenced pursuant to this Section 9 the Corporation
shall have the burden of proving that Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be.

10. Security.

6
<PAGE>

balance in each such escrow account of One
Million Dollars ($1,000,000) and shall increase such amount from time to time as
it shall deem necessary or desirable to meet the Corporation's anticipated
obligations in connection with such Proceeding, pursuant to this Agreement. The
amount deposited by the Corporation in any such escrow account shall not limit
the Corporation's liability under this Agreement. At the termination of any
such Proceeding, after payment of all Expenses, judgments, fines or settlement
amounts, the balance of funds remaining in the escrow account established for
such Proceeding shall be returned to the Corporation for its general purposes
and such escrow account shall be closed.

11. Non-Exclusivity; Duration of Agreement; Insurance;
Subrogation.

12. Severability. If any provision or provisions of this Agreement shall
be held to be invalid, illegal or unenforceable for any reason whatsoever (a)
the validity, legality and

7
<PAGE>

enforceability of the remaining provisions of this
Agreement (including, without limitation, each portion of any Section of this
Agreement containing any such provision held to invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable) shall not
in any way be affected or impaired thereby; and (b) to the fullest extent
possible, the provisions of this Agreement (including, without limitation, each
portion of any Section of this Agreement containing any such provision held to
be invalid, illegal or unenforceable, that is not itself invalid, illegal or
unenforceable) shall be construed so as to give effect to the intent manifested
by the provision held invalid, illegal or unenforceable.

14. Definitions. For purposes of this Agreement:

8
<PAGE>

(c) "Disinterested Director" means a director of the Corporation who
is not and was not a party to the Proceeding in respect of which indemnification
is sought by Indemnitee.

9
<PAGE>

(e) if to Indemnitee, to:

Ruth McMullin

17 Woodside Lane

Westport, CT 06880

(f) if to the Corporation, to:

UNR INDUSTRIES, INC.

332 South Michigan Avenue

Suite 300

Chicago, Illinois 60604

Attention: Secretary

or to such other address as may have been furnished by like notice to Indemnitee
by the Corporation or to the Corporation by Indemnitee, as the case may be.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above set forth.

By: /s/ William Andrews
-------------------
President

INDEMNITEE:

/s/ Ruth R. McMullin
--------------------

<PAGE>

10.4(d)

INDEMNIFICATION AGREEMENT

THIS AGREEMENT, made and entered into this 22nd day of November, 1995
("Agreement"), by and between UNR INDUSTRIES, INC., a Delaware corporation
("Corporation", which term shall include any one or more of its subsidiaries
where appropriate), and GENE LOCKS ("Indemnitees"):

WHEREAS, the current impracticability of obtaining adequate insurance and
the uncertainties relating to indemnification have increased the difficulty of
attracting and retaining such persons;

WHEREAS, Indemnitee is willing to serve, continue to serve and/or to
undertake additional service for or on behalf of the Corporation on the
condition that he be so indemnified;

NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Corporation and Indemnitee do hereby covenant and agree as
follows:

2. General. The Corporation shall indemnify, and shall advance Expenses
(as hereinafter defined) to, Indemnitee as provided in this Agreement and to the
fullest extent permitted by law.

3. Proceedings other Than Proceedings by or in the Right of the
Corporation. Indemnitee shall be entitled to the rights of indemnification
provided in this Section 3 if, by

<PAGE>

2
<PAGE>

interest accruing at the prime rate of
interest from the twenty-first (21) day after receipt by the Corporation of such
statement until said expenses are paid.

7. Procedure for Determination of Entitlement to
Indemnification.

3
<PAGE>

8. Presumptions and Effect of Certain Proceedings.

4
<PAGE>

in good faith requires such additional
time for the obtaining or evaluating of documentation and/or information
relating thereto; and provided, further, that the foregoing provisions of this
Section 8(b) shall not apply (i) if the determination of entitlement to
indemnification is to be made by the stockholders pursuant to Section 7(b) of
this Agreement and if (A) within fifteen (15) days after receipt by the
Corporation of the request such determination the Board has resolved to submit
such determination to the stockholders for their consideration at an annual
meeting thereof to be held within seventy-five (75) days after such receipt and
such determination is made threat, or (B) a special meeting of stockholders is
called within fifteen (15) days after such receipt for the purpose of making
such determination, such meeting is held for such purpose within sixty (60) days
after having been so called and such determination of entitlement is made
thereat, or (ii) if the determination of entitlement to indemnification is to be
made by Independent Counsel pursuant to Section 7(b) of this Agreement.

9. Remedies and Indemnitee.

5
<PAGE>

trial, or arbitration, on the
merits and Indemnitee shall not be prejudiced by reason of that adverse
determination. If a Change of Control shall have occurred, in any judicial
proceeding or arbitration commenced pursuant to this Section 9 the Corporation
shall have the burden of proving that Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be.

10. Security.

6
<PAGE>

balance in each such escrow account of One
Million Dollars ($1,000,000) and shall increase such amount from time to time as
it shall deem necessary or desirable to meet the Corporation's anticipated
obligations in connection with such Proceeding, pursuant to this Agreement. The
amount deposited by the Corporation in any such escrow account shall not limit
the Corporation's liability under this Agreement. At the termination of any
such Proceeding, after payment of all Expenses, judgments, fines or settlement
amounts, the balance of funds remaining in the escrow account established for
such Proceeding shall be returned to the Corporation for its general purposes
and such escrow account shall be closed.

11. Non-Exclusivity; Duration of Agreement; Insurance;
Subrogation.

12. Severability. If any provision or provisions of this Agreement shall
be held to be invalid, illegal or unenforceable for any reason whatsoever (a)
the validity, legality and

7
<PAGE>

enforceability of the remaining provisions of this
Agreement (including, without limitation, each portion of any Section of this
Agreement containing any such provision held to invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable) shall not
in any way be affected or impaired thereby; and (b) to the fullest extent
possible, the provisions of this Agreement (including, without limitation, each
portion of any Section of this Agreement containing any such provision held to
be invalid, illegal or unenforceable, that is not itself invalid, illegal or
unenforceable) shall be construed so as to give effect to the intent manifested
by the provision held invalid, illegal or unenforceable.

14. Definitions. For purposes of this Agreement:

8
<PAGE>

(c) "Disinterested Director" means a director of the Corporation who
is not and was not a party to the Proceeding in respect of which indemnification
is sought by Indemnitee.

9
<PAGE>

(g) if to Indemnitee, to:

Gene Locks

700 Washington Square

Philadelphia, PA 19106

(h) if to the Corporation, to:

UNR INDUSTRIES, INC.

332 South Michigan Avenue

Suite 300

Chicago, Illinois 60604

Attention: Secretary

or to such other address as may have been furnished by like notice to Indemnitee
by the Corporation or to the Corporation by Indemnitee, as the case may be.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above set forth.

By: /s/ Victor E. Grimm
-------------------
President

INDEMNITEE:

/s/ Gene Locks
--------------

<PAGE>

10.5

TERMINATION AGREEMENT

TERMINATION AGREEMENT, dated as of March 30, 1999 (this "Termination
Agreement"), between ROHN Industries, Inc., a Delaware corporation ("ROHN"), and
PiRod Holdings, Inc., a Delaware Corporation ("PIROD").

WHEREAS, ROHN and PIROD have entered into an Agreement and Plan of
Merger dated as of December 22, 1998 (the "Merger Agreement");

WHEREAS, the boards of directors of ROHN and PIROD have determined that
the transactions contemplated by the Merger Agreement cannot reasonably be
expected to be effected on the terms set forth in the Merger Agreement and that
it is in the best interests of ROHN and PIROD, respectively, to terminate the
Merger Agreement.

WHEREAS, the Merger Agreement provides it may be terminated by the
mutual written consent of the boards of directors of ROHN and PIROD; and

WHEREAS, upon such termination of the Merger Agreement, the ROHN
Stockholders Agreement, the Trust Voting Agreement and the PiRod Shareholders
Voting Agreement (as such terms are defined in the Merger Agreement) shall
automatically terminate in accordance with their respective terms.

Now, therefore, in accordance with Section 8.1.1. of the Merger
Agreement, ROHN and PIROD, and the boards of directors of ROHN and PIROD, by the
signatures hereto of their duly authorized officers and designees, hereby
mutually consent and agree to the termination of the Merger Agreement in
accordance with its terms as of the date first above written.

In WITNESS WHEREOF, the undersigned have duly executed this Termination
Agreement as of the date first above written.

<PAGE>

ROHN INDUSTRIES, INC.

By /s/ Brian B. Pemberton
-------------------------------------
Brian B. Pemberton, its President,
and as designee of its Board of
Directors

PIROD HOLDINGS, INC.

By /s/ Marc Wolpow
-------------------------------------
Marc Wolpow, its Prsident,
and as designee of its Board of
Directors

<PAGE>
EXHIBIT 23

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation
of our reports included in this Form 10-K, into the Company's previously filed
Registration Statement No. 33-51732.

ARTHUR ANDERSEN LLP

Chicago, Illinois
March 31, 1999

<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS EXTRACTED FROM THE REGISTRANT'S ANNUAL REPORT
ON FORM 10-K AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 19,690
<SECURITIES> 0
<RECEIVABLES> 29,788
<ALLOWANCES> 1,200
<INVENTORY> 27,444
<CURRENT-ASSETS> 80,116
<PP&E> 48,024
<DEPRECIATION> 21,394
<TOTAL-ASSETS> 114,192
<CURRENT-LIABILITIES> 29,286
<BONDS> 0
0
0
<COMMON> 535
<OTHER-SE> 72,044
<TOTAL-LIABILITY-AND-EQUITY> 114,192
<SALES> 174,153
<TOTAL-REVENUES> 174,153
<CGS> 131,121
<TOTAL-COSTS> 149,917
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,045
<INCOME-PRETAX> 23,483
<INCOME-TAX> 8,900
<INCOME-CONTINUING> 14,043
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 14,043
<EPS-PRIMARY> 0.27
<EPS-DILUTED> 0.27

</TABLE>