NEW JERSEY STEEL CORP, 10-K, 1997-02-28

NEW JERSEY STEEL CORP
10-K, 1997-02-28
STEEL WORKS, BLAST FURNACES & ROLLING MILLS (COKE OVENS)

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

FORM 10-K

(Mark one)

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

For the fiscal year ended November 30, 1996
-----------------------------

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period from to
--------------- ---------------

Commission file number: 0-15838

NEW JERSEY STEEL CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)

Delaware 22-2137967
- -------------------------------- -----------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)

North Crossman Road, Sayreville, New Jersey 08872
- --------------------------------------------- -----------------------
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (908) 721-6600

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

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

Common Stock, $ .01 par value
------------------------------------------------
(Title of Class)

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 (or for such shorter period that the
Registrant was required to file such reports), 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. [ ]

Aggregate market value of voting stock held by nonaffiliates: $28,122,375
based on the last sales price of such common stock on February 14, 1997 as
reported on the NASDAQ National Market System.

Number of shares of Common Stock, par value $.01 per share, outstanding at
February 14, 1997: 5,920,500.

DOCUMENTS INCORPORATED BY REFERENCE: None

PART I

Item 1. Business.

General.

New Jersey Steel Corporation (the "Company") owns and operates a
steel mini-mill located in Sayreville, New Jersey. The mill produces steel
and steel products, principally concrete reinforcing bar, used in the
construction industry. A mini-mill recycles ferrous scrap and produces steel
and steel products at low cost. The Company is the largest producer of rebar
in the northeastern United States.

The Sayreville mill consists of a melt shop with an annual capacity of
approximately 675,000 per year tons of steel billets, a rolling mill with a
capacity of approximately 525,000 tons per year of rolled steel products and
related infrastructure and support systems.

The Company's operating strategy is to achieve significant operating cost
reductions to reestablish its position as a low cost producer, to optimize
productivity at its manufacturing facility and to explore opportunities for
increased production of higher-margin coated and merchant products to
increase profitability.

In the 1994-1996 period, the Company embarked on an approximately $60
million project to upgrade equipment in its melt shop, improve operating
efficiency and expand melt shop capacity. The rebuilt melt shop consists of
an electric arc furnace employing the Consteel continuous scrap feed process,
a modern pollution control system and a new six-strand continuous caster.
Other major elements of the program included a new ladle furnace and upgraded
infrastructure, including water and electrical distribution systems.

The Consteel Process continuously feeds steel scrap preheated by flue
gases into the furnace through a side opening. It uses a melting process
different from conventional electric arc furnaces and its specifications
indicated reduced electricity usage in the melt process and reduced
generation of dust. However, the Company has experienced substantial
difficulties in getting the new installation on line, working smoothly and
realizing its operational efficiencies. As a consequence, the Company has
experienced excessive production costs which reduced profits in 1994 and 1995
and contributed to a significant loss in 1996. The modernization program
was completed with the commissioning of the new 6-strand continuous caster
in September 1996.

The Company's air emissions permit from the New Jersey Department of
Environmental Protection ("NJDEP") was issued in September 1994 based on the
emissions levels of conventional electric arc furnaces and the Consteel
system manufacturer's representations concerning Consteel's performance.
However, the Company's experience has shown that the Consteel continuous
scrap feed process produces certain air emissions at levels in excess of
those which were anticipated and, consequently, in excess of the emissions
limits contained in the Company's emissions permit. The Company has applied
for a modification of its permit limits, and that application is currently
pending before the NJDEP, but in the meantime certain of the mill's emissions
are exceeding the limits in its 1994 permit. See "Air Permit Issues."

The modernization program was undertaken to achieve cost savings from
reduced power and electrode consumption, decreased labor, maintenance and
dust disposal costs, compliance with all air emissions requirements and an
increase in melting capacity. However, the Company has encountered a high
level of production delays related to the new equipment, has realized only
limited electrical savings, has experienced increased dust disposal costs
and flux consumption and has expended substantial amounts on engineering to
improve the performance of the system and reduce emissions. The Company also
spent substantial amounts on legal fees to address the regulatory issues
related to the permit problems.

The Company occasionally sells billets directly to others, and in 1996
billet sales accounted for approximately 10% of the billets produced by the
Company's melt shop. In 1996, the Company had committed to certain customers
to provide billets because it anticipated having melting capacity in excess
of the capacity of its rolling mill. Production problems, however, reduced
melt shop production during fiscal 1996 to the point where such billet sales,
rather than being excess capacity, were core capacity and the Company
realized lower margins on billet sales. Likewise, the amount of billets
available to the rolling mill were limited, so rebar production
was restricted and the Company experienced shortages of rebar product to meet
its customers' needs.

The Company believes that it has adequately addressed the production and
other problems it has encountered and that anticipated production levels will
be achieved in fiscal 1997. The Company is also aggressively addressing the
cost issues which have contributed to its loss in fiscal 1996. As a
consequence, barring unanticipated market developments, the Company
anticipates returning to profitability in fiscal 1997.

The Company.

The Company is a Delaware corporation formed in 1978 to succeed to the
businesses of New Jersey Steel and Structural Corporation, founded in 1967,
Capitol Steel Corporation and Fireproof Products Co., Inc.

The Company spent approximately $17,240,000 in fiscal 1996 on
improvements to the Sayreville Mill. These expenditures were incurred
primarily in connection with the installation of the new 6-strand caster and
other equipment installed as part of the modernization program.

The Company is engaged in only one industry segment, the ownership and
operation of a mini-mill.

Steel Manufacturing Operations.

The Company's mini-mill melts ferrous scrap -- junked automobiles,
railroad cars and track materials, structural steel recovered from demolition
of bridges and other obsolete structures, machines and household appliances
- -- to produce a limited range of rebar and merchant steel products.
Operations commence with the melting of scrap steel in an electric arc
furnace. The molten steel is then funneled through a continuous caster from
which it emerges as continuous rectangular strands of steel which are cut
into predetermined lengths. These semi-finished steel bars are referred to
as billets. The billets are subsequently reheated to 2300 degrees Fahrenheit
in a billet reheat furnace and processed in a rolling mill for size reduction,
and then rolled into finished reinforcing bars or other steel products.
Products emerge from the rolling mill onto a cooling bed where they are cooled
uniformly. They are then cut into standard lengths, passed through bundling
equipment for packaging and transferred to the storage yard where they are
loaded on trucks or railroad cars for shipment to customers.

Rebar is a bar of steel used to increase the strength of poured concrete.
Reinforced concrete is produced when poured concrete is formed with rebar
embedded in it. Rebar is manufactured with a ribbed surface which allows
concrete to adhere to the rebar, giving reinforced concrete the tensile
strength of the rebar and the compression and shear resistance of concrete.
Reinforced concrete is used in the construction of highways, bridges, sewage
and water treatment plants, buildings, subways, tunnels, dams and other
public works. Rebar is manufactured by the Company to standard specification
and ranges in diameter from 3/8" to 1-3/8". The Company also produces a
limited range of merchant bars which currently consists of rounds and squares
and hand rails.

Customers and Marketing.

The Company's customers are primarily fabricators and steel service
centers. During fiscal 1996, sales to the Company's top four customers
accounted, respectively, for 15%, 15%, 15% and 12% of the Company's net
sales. Due to the commodity nature of rebar and the fact that regional
demand is closely related to levels of activity in the construction industry,
the Company does not believe that the loss of any significant customer would
have a material adverse effect on the Company.

The Company primarily markets rebar in the northeastern United States,
which includes New York, New Jersey, Pennsylvania, Maryland, Delaware,
Washington D.C. and New England. The Company is the only significant
producer of rebar with a manufacturing facility in the northeastern United
States. The Company's facilities are strategically located near its
important market areas of Boston, Philadelphia, New York and Washington, D.C.,
enabling the Company to benefit from lower transportation costs to customers
in these markets as compared with competitors who must ship rebar longer
distances to serve such customers.

Substantially all of the Company's sales are made through its own sales
force. The Company maintains finished products in inventory based on
historical patterns of usage in order to offer immediate shipment to
customers whenever possible. The Company transports its products by common
carrier, truck, rail and water transportation. The Sayreville Mill is served
by an on-site railroad siding.

Competition and Other Market Factors.

Construction Industry. Demand for the Company's principal product,
rebar, is closely related to levels of construction activity in the Company's
market area. The level of construction activity in the Company's market
depends on a variety of economic and political factors, including the general
level of economic activity, interest rates, the availability of financing,
population trends and government policy. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations".

Competition. The Company experiences substantial competition in the sale
of its products from a number of domestic companies in its geographic markets,
including Birmingham Steel Corporation (Kankakee, Illinois), Ameristeel
Corporation (Charlotte, North Carolina) and Auburn Steel Co., Inc. (Auburn,
New York). With the exception of Auburn Steel Co., Inc., which, although a
rebar producer, primarily produces merchant bar, there are no rebar
manufacturers in the northeastern United States other than the Company. The
mini-mill steel industry currently has excess production capacity, which has
resulted in competitive product pricing and pressures on industry profit
margins. The high fixed costs of operating a mini-mill encourages mill
operators to maintain high levels of output even during periods of reduced
demand, which exacerbates the pressures on profit margins. In this
environment, efficient production and cost controls are important to mini-
mill steel producers. Competing companies in the industry may have more
capital and substantially greater manufacturing, marketing and human
resources capabilities and may constitute significant long-term competition.

The Company is a major seller of rebar in the northeastern United States
market. Rebar and merchant bar are commodity steel products, making price
the primary competitive factor. Additional important competitive factors
governing the sale of rebar are product availability, quality and mill
location. Due to the high cost of freight relative to the value of the
Company's steel products, competition from any one non-regional producer is
limited; and rebar deliveries are generally concentrated within a 300 mile
radius of a mini-mill, while merchant bar deliveries are generally
concentrated within a 500 mile radius. Except in unusual circumstances, the
customer's delivery expense is limited to freight charges from the nearest
competitive mini-mill and any incremental freight charges must be absorbed by
the supplier. The rebar market is highly competitive.

Foreign Competition. The worldwide steel industry is characterized
by excess mill capacity. A number of foreign governments subsidize their
countries' steel production enabling that country's steel to be sold at
prices lower than the cost of production. However, domestic transportation
and port costs and the lack of local distribution centers have limited
foreign producers' inroads into the Company's rebar market. Various Federal
and state laws and the "Buy America" programs, prohibit the use of foreign
steel in publicly funded construction. The Company could be adversely
affected if the Buy America programs were discontinued or substantially cut
back. While the Company believes that foreign competition currently does not
have a material adverse effect upon the Company's operations, there can be
no assurance that this will continue to be so.

Domestic Overcapacity. The domestic steel industry is characterized by
overcapacity. The Company believes, however, that its geographic location,
production cost, and the low selling price of rebar relative to other steel
products insulate it, to a certain extent, from the competitive effects of
this overcapacity.

Seasonality. The Company's normal operations are subject to a seasonal
period of reduced sales during November through January, when winter weather
impacts the construction market. To partially offset such seasonal
effects, the Company markets rebar to the Puerto Rican market and to the
mining industry. During the winter, the Company generally operates the
Sayreville Mill at full capacity to build inventory, which is sold during the
balance of the year. These increased inventory levels have historically been
funded by cash generated by operations and available bank borrowings.

Backlog. The commodity nature of the mill rebar market is generally not
characteristic of a long lead time order cycle. Orders are generally filled
within 45 days and are cancelable. The Company does not believe backlog is a
significant factor in its business.

Raw Materials.

Scrap Steel. The principal raw material used in the Company's mini-mill
is scrap steel. The market for scrap steel is highly competitive and its
price volatility is influenced by periodic shortages, freight costs,
speculation by scrap brokers and other conditions largely beyond the control
of the Company. Fluctuations in the supply and demand for scrap may result
in increased prices and production costs. Fluctuations in scrap market
conditions have an industry-wide impact on manufacturing costs and selling
prices of finished goods. During periods of scrap price escalation, the
mini-mill industry seeks to maintain profit margins and the Company has
generally been able to pass along increased raw material costs to customers.
However, temporary reductions in profit margin spreads frequently occur due
to a timing lag between the escalation of scrap prices and the markets
acceptance of higher selling prices for finished steel products. There can
be no assurance that the Company will continue to be able to pass on scrap
cost increases to its customers.

The Company purchases scrap through outside brokers, principally Tube City
Iron and Metal Company, through which the Company purchased approximately 97%
of its total scrap purchases in fiscal 1996. The Company believes that
adequate sources of the scrap and other raw materials it uses are readily
available, although the increasing prevalence of mini-mills producing a
variety of steel products traditionally produced only by integrated steel
mills has caused the scrap market to become more competitive in recent years.

The Company uses various other materials in producing its steel. All of
the Company's raw materials are available from a number of sources.

Electricity and Natural Gas. The Company's mini-mill operations consume
large amounts of energy in the form of electricity and natural gas. The
Company purchases its electrical energy under a contract which provides for
economical electricity rates in return for the utility's right to interrupt
the service during peak demand periods. The number and duration of the
service interruptions are contractually limited. The Company believes that
the savings in the cost of electricity more than offsets any production which
might be lost as a result of such interruptions.

In 1992, the State of New Jersey Board of Regulatory Commissioners
approved a revised tariff for electrical service provided by the Company's
electric utility, Jersey Central Power & Light, which decreased the rate
charged for service to the Sayreville Mill. The full savings from this rate
change became effective retroactive to April 1, 1994.

Air Permit Issues.

The Company's mill is classified, in the same manner as similar steel
mills in the industry, as generating hazardous waste due to the production
of dust that contains lead, cadmium and chromium. The Company collects the
dust resulting from its melting operation through an emissions control system
and manages it through a waste recycling firm.

In September 1994, NJDEP issued a permit covering installation of the
Consteel Process at the Sayreville Mill, including a Continuous Emissions
Monitoring System ("CEMS") equipment and a stack test.

The CEMS equipment was started in April, 1995 and the stack test was
conducted in February, 1996 and the results were submitted to the NJDEP on
March 8, 1996. The CEMS data and the stack test results indicate that
operation of the plant involves emissions of CO, NOx and VOC's which exceed
the levels contained in the permit. In conjunction with the submission of
the stack test results, the Company applied for a modification of its permit
to reflect the actual operation of the Consteel Process. Until such time as
a new permit is issued, there is a question as to whether the Company is in
violation of the temporary permit and, as a consequence, is subject to fines
and penalties the amounts of which are subject to the discretion of the NJDEP.
It is the Company's position that the mill's emissions meet applicable
federal and state requirements and that the ultimate outcome of this matter
will not have a material adverse effect on the Company's financial position
or results of operations.

In March 1996, the Natural Resources Defense Council ("NRDC") and the
Public Interest Research Group of New Jersey, Inc. ("PIRG"), commenced a
lawsuit against the Company in the United States District Court for the
District of New Jersey (Civil Action No. 96-1060 (JAG)). The lawsuit is
based on the Company's CEMS reports submitted to the NJDEP and claims that
the alleged exceedances since April 1995 constitute violations of the Clean
Air Act which are not being pursued by the NJDEP. The complaint seeks
unspecified fines and penalties for the alleged violations and for an
injunction mandating operation of the Sayreville Mill in accordance with its
permit. The State of New Jersey has intervened in the litigation. The
Company believes that the ultimate outcome of this matter will
not have a material adverse effect on the Company's financial position or
results of operations.

Other than the issues raised in the foregoing matters, management
believes the Company is in compliance in all material respects with
applicable environmental requirements. Management does not anticipate any
substantial increase in its costs for environmental remediation or that any
such remediation costs will have an adverse effect on the Company's
competitive position, operations or results. However, additional capital
expenditures on engineering improvements to the mill may be required to
resolve the open permit issues. The Company can not anticipate what may be
required or how costly any such improvements may be, although it does not
believe that they will have a long-range adverse effect on the Company's
financial position or results of operations.

Total expenditures incurred by the Company in fiscal 1996 in relation to
environmental matters was approximately $2.8 million.

Employees.

As of November 30, 1996, the Company employed 331 people, none of whom
are parties to collective bargaining agreements with the Company.

Item 2. Properties.

The Company owns approximately 116.5 acres of real estate in Sayreville,
New Jersey, upon which are located a 235,000 square foot steel mill, an 8,000
square foot executive office building, a 30,000 square foot epoxy coating
plant and training center, storage and repair facilities. The Sayreville
property is generally fully utilized and is suitable for its use in the
Company's business.

The Company owns approximately 8.5 acres in Bowie, Maryland, on which
its 21,000 square foot fabrication facility, closed in 1996, was located.
It is not currently utilized in the Company's business and is for sale.

The Company owns 27 acres in Keasbey, New Jersey, which has 94,000 square
feet of industrial buildings and dock facilities. While the Company rents
out a portion of the space at the Keasbey property, the balance of the
property is not utilized in the Company's business. The Company is currently
seeking a buyer for the property.

Item 3. Legal Proceedings; Other Matters.

The Company, Von Roll Holding AG ("Von Roll"), and various present and
former officers and directors of the Company (Walter H. Beebe, Heinz Frech,
H. Georg Hahnloser, Harvey L. Karp, Robert J. Pasquarelli, Thomas W. Jackson
and Paul Roik) are defendants in an action in the United States District
Court for the Southern District of New York entitled GARY LUTIN V. NEW JERSEY
STEEL CORPORATION, ET AL. (Case No. 93 CIV 6612), which was originally
commenced in a West Virginia state court in 1991. The plaintiff has alleged
that the defendants conspired to destroy the business of Advanced Mining
Systems, Inc., a company which manufactured roof support systems for
underground coal mines. In 1995, the same plaintiff filed a second action
in the same court against the same parties under the Federal RICO statutes.
The plaintiff seeks unspecified damages in both actions which he claims to be
in excess of $50,000,000.

In October 1996, the court rendered a decision dismissing the complaints
in the two actions. The RICO claims were dismissed with prejudice. The
claims for tortious conspiracy were dismissed without prejudice to the
plaintiff's right to replead. Plaintiff has filed an appeal from the
decision dismissing his RICO claim and filed an amended complaint in the
first action. The Company has moved to dismiss that amended complaint.

A related action entitled NEW JERSEY STEEL CORPORATION AND VON ROLL
HOLDING A.G. v. GARY LUTIN, pending in the Supreme Court of the State of New
York, County of New York (Index No. 96-103400), involves a claim by the
Company and Von Roll against Mr. Lutin for libel in connection with a letter
written by Mr. Lutin. In July, 1996, Mr. Lutin filed his answer with
counterclaims asserting essentially the same claims as were made in the two
federal actions. The court dismissed the counterclaims on the ground that
there was another action pending for essentially the same claims in federal
court. Mr. Lutin has filed an appeal from the Court's decision.

The Company has been advised by its counsel that, based on the
information available to it, the claims of Mr. Lutin in these matters are
without merit.

In March 1994, Novo-Plez SA ("Novo") and NASCO Brokers, Inc. ("NASCO")
(Novo and NASCO, collectively the "Claimants"), steel brokers, commenced an
arbitration against the Company in the International Court of Arbitration of
the International Chamber of Commerce (the "Swiss Arbitration") seeking
damages for steel purchased from the Company which the Claimants assert was
of inferior quality. Upon conclusion of the arbitration hearings in March
1996, the Arbitrator issued an award in favor of the Company denying all of
the Claimants' claims for losses and damages. The Company was also awarded
its fees and expenses associated with the arbitration.

Egyptian Metals Company, the customer of the Claimants in the Swiss
Arbitration, is pursuing a related claim against the Company, Novo and NASCO
in the United States District Court for the District of New Jersey (Case No.
CIV. 95 823 (DRD)) based on the same transactions as the Swiss Arbitration
seeking damages in the amount of $5,050,000 against the Company (Novo and
NASCO were dropped as defendants). Trial is scheduled to begin March 11,
1997. The Company believes it will ultimately prevail in its defense of
this action.

From time to time the Company is involved in litigation relating to
claims arising out of its operations in the normal course of business. Such
claims against the Company are generally covered by insurance. There can be
no assurance that insurance, including product liability insurance, will be
available in the future at reasonable rates.

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

Not applicable.

PART II

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

The Company's Common Stock is traded on the NASDAQ National Market System
under the symbol NJST. On February 14, 1997, there were approximately 1,398
holders of record of the Company's Common Stock. The Company is not
currently paying dividends and has not paid cash dividends since 1991. The
Company periodically reviews reinstating the cash dividend but it has no
present intention to do so. The range of high and low closing sale prices
of the Common Stock for the last two fiscal years by quarter is presented
below:
<TABLE>
FIRST SECOND THIRD FOURTH

HIGH LOW HIGH LOW HIGH LOW HIGH LOW

<S> <C> <C> <C> <C> <C> <C> <C> <C>
FISCAL
1996 10-1/2 7-3/4 9 6-1/2 9 6 7-1/2 3-3/4

FISCAL
1995 14-3/4 12-5/8 12-3/4 11-3/4 12-1/4 9-3/4 10-1/2 9-1/4

</TABLE>
Item 6. Selected Financial Data.

The selected financial data shown below for the five year period ended
November 30, 1996 should be read in conjunction with the Financial Statements
and related Notes thereto which are included elsewhere in this Report.
<TABLE>

Year Ended November 30
1996 1995 1994 1993 1992
(In thousands, except per share data)

<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA
Net Sales $145,209 $137,236 $137,755 $119,462 $111,746
Gross (loss) profit (4,236) 7,983 9,022 7,129 7,159
(Loss) earnings before
extraordinary credit and
cumulative effect of
change in accounting
for income taxes (14,922) 705 2,599 (3,702) 697
Net (loss) earnings(1) (14,922) 705 2,599 1,198 2,064

PER SHARE DATA(2)
(Loss) earnings before
extraordinary credit and
cumulative effect of
change in accounting
for income taxes $(2.52) .12 $.44 $(.63) $.12
Net (loss) earnings (2.52) .12 .44 .20 .35
Cash dividends declared - - - - -

BALANCE SHEET DATA
Working capital $ 1,251 $ 3,030 $ 3,656 $ 18,126 $ 34,249
Total assets 151,250 146,243 136,236 113,306 105,515
Long-term debt (including
current portion) 37,764 19,400 10,536 - -
Total stockholders' equity 75,399 90,321 89,450 86,623 85,425

</TABLE>
- ------------------

(1) The Company adopted the provisions of Statement of Financial
Accounting Standards No. 109 "Accounting for Income Taxes" effective
December 1, 1992. The cumulative effect of this change in accounting
for income taxes was a credit of $4,900,000 in fiscal 1993.

(2) The weighted average number of shares of common stock and common
stock equivalents where applicable is approximately 5,921,000,
5,903,000, 5,883,000, 5,874,000 and 5,868,000 shares for the years
ended November 30, 1996, 1995, 1994, 1993, and 1992, respectively.

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

General.

The steel industry is cyclical in nature. The Company's sales are
primarily derived from products sold to the construction industry, which
also has been cyclical and directly affected by, among other things, the
level of consumer confidence and prevailing economic conditions.

Substantially all of the Company's revenues are comprised of rebar sales.
Rebar is a commodity the price of which is determined by supply and demand.
Supply, i.e., rebar production capacity, is fairly constant. Demand is
determined, in large part, by levels of activity in the construction industry.
The principal variable in production costs is the cost of scrap steel. Scrap
is also a commodity the price of which is determined by supply and demand.
Scrap supply is fairly constant and demand for scrap is influenced by the
level of activity in the worldwide steel industry.

Scrap steel is the principal raw material used in the Company's products
and accounted for approximately 43% of the Company's total cost of product
sold in fiscal 1996. Scrap demand, and therefore scrap prices, are affected
by cyclical, seasonal and other market factors. These fluctuations in scrap
prices affect the Company's revenues, cost and earnings.

The Company began a modernization program in 1993 designed to increase
its melt shop capacity and reduce operating costs. The major elements of the
modernization program included upgrading equipment, the installation of a new
production technology known as the Consteel Process and a new continuous
casting machine. Each of the elements of the modernization program have been
completed.

The Company is not aware of any material remediation contingencies
associated with the real estate or industrial facilities owned and operated
by it. The Sayreville Mill operates pursuant to permits issued by various
regulatory agencies, including the NJDEP. Should the respective regulatory
agencies impose substantially more restrictive operating conditions on
renewal of the permits, the Company's operations could be substantially and
adversely affected. See "Business - Air Permit Issues".

Results of Operations.

The following table sets forth for the periods indicated the relative
percentages selected items in the Consolidated Statements of Operations bear
to net sales:
<TABLE>
Year Ended November 30,
1996 1995 1994
<S> <C> <C> <C>
Net Sales 100% 100% 100%

Gross (Loss) Profit (2.9) 5.8 6.5

Selling, General &
Administrative Expenses 6.1 5.2 5.0

Other (Expense) Income (1.0) (.4) .4

(Loss) Earnings Before Provision
for Income Taxes, And Equity in
Operations of Investee (10.0) .2 1.9

Provision for Income Taxes -- -- --

Equity in Operations of Investee (.3) .3 --

Net (Loss) Earnings (10.3) .5 1.9
</TABLE>

Year ended November 30, 1996 compared
to the year ended November 30, 1995

Net sales for the fiscal year ended November 30, 1996 rose 6% to
$145,209,000 from $137,236,000 for fiscal 1995 primarily on the strength of
higher finished goods and billet shipments. The Company's total shipments
rose 17% to 514,000 tons in fiscal 1996 from 439,000 tons in fiscal 1995.
While rebar pricing recovered in the second half of 1996, it did not offset
the negative pricing environment in the first half of 1996. As a result,
the benefit of higher 1996 shipment levels was offset by lower average
finished goods selling prices which fell 7% to $291 from $313 per ton in
fiscal 1995.

Gross profit margin declined to a negative 2.9% in fiscal 1996 from a
positive 5.8% in 1995. The decline in average finished goods selling prices
was primarily responsible for this margin decline. Despite higher production
levels in both the melt shop and rolling mill as well as lower scrap prices,
total product costs did not change materially. Higher production levels
reflected higher operating hours which were offset by lower productivity in
both the melt shop and rolling mill.

While scrap costs dropped to $110 from $113 in fiscal 1995, the Company
experienced an increase in billet conversion costs because of operating
problems with its old caster and start-up difficulties with its new caster in
the fourth quarter.

Selling, general and administrative expense increased $1,729,000 to
$8,894,000 in fiscal 1996 from $7,165,000 in 1995. This increase in 1996 was
primarily the result of increased legal and professional fees due to
regulatory and environmental matters.

Total other expense for the 1996 fiscal year increased $735,000
to $1,313,000 from $578,000 in fiscal 1995. This was primarily the result
of an increase in interest expense of $1,107,000 and a decrease in other
expense of $96,000. Rental income increased $34,000 in fiscal 1996 to
$185,000 from $151,000 in fiscal 1995.

The Company's share of equity in operations of investee contributed a
loss of $479,000 for the 1996 fiscal year as compared to income of $465,000
for the 1995 fiscal year.

Year ended November 30, 1995 compared
to the year ended November 30, 1994.

Net Sales for the fiscal year ended November 30, 1995 remained flat at
$137,236,000 as compared to $137,755,000 for the 1994 fiscal year, reflecting
a 2% decline in shipment levels and a small increase in selling prices.
Annual shipment levels for fiscal 1995 were 439,000 tons, as compared to
446,000 tons in fiscal 1994. While rebar prices remained flat year to year,
overall pricing edged up slightly because of higher epoxy pricing and a
higher mix of merchant bar. Rebar pricing remained strong during the first
half of fiscal 1995, but experienced a deep decline during the second half of
the year. This decline reflected aggressive price discounting by mills in
response to high inventory levels at both mill and customer locations.
Overall average selling prices rose to $313 per ton in fiscal 1995 and $309
per ton in fiscal 1994.

Gross profit margins decreased to 5.8% in the 1995 fiscal year from 6.5%
in 1994. The decrease in gross profit margins in 1995 resulted from higher
average scrap costs, higher other material costs and higher depreciation
charges. Average scrap costs increased to $113 per ton in fiscal 1995 from
$104 per ton in fiscal 1994. These negative factors were partially offset
by the benefit of slightly higher selling prices in 1995.

Selling, general and administrative expense increased $168,000 to
$7,165,000 in fiscal 1995 from $6,997,000 in 1994. This increase in 1995 was
primarily the result of increased legal and various expense categories.

Total other income (expense) for the 1995 fiscal year decreased
$1,152,000 to $578,000 of expense from $574,000 of income in fiscal 1994.
This was primarily the result of an increase in interest expense of $676,000
and a decrease in rental income of $380,000.

The Company's equity in operations of investee contributed $465,000 to
earnings for the 1995 fiscal year.

Liquidity and Capital Resources.

In June 1996, the Company entered into an Amended and Restated Loan and
Security Agreement (the "loan agreement") with its bank to increase the
maximum amount available under its revolving credit facility from $17,500,000
to $20,000,000 and to extend the maturity date from April 30, 1997 to May 1,
1998. The maturity dated on the Company's $7,500,000 term loan was also
extended from December 31, 2000 to May 1, 2001. The loan agreement also
amended certain financial covenants. Borrowings under the revolving credit
facility and term loan are secured by substantially all of the Company's
assets. Principal repayments under the term loan are due in monthly
installments of $125,000 beginning December 1, 1996 with a final payment of
$875,000 due at maturity. Interest on the term loan and outstanding amounts
under the revolving credit facility are payable at the prime rate plus one
percent. At November 30, 1996, the Company was not in compliance with
certain of the financial covenants, such non-compliance was waived by the
bank. On February 27, 1997, the bank amended the loan agreement with respect
to the financial statement covenants. Covenants amended include tangible
net worth, working capital, capital expenditures and the cash coverage ratio,
as defined.

Concurrently with the execution and delivery of the loan agreement, the
Company entered into a Credit Agreement (the "credit agreement") with Von
Roll, its majority stockholder. The credit agreement provided a $15,000,000
revolving credit facility to the Company which matures May 1, 1998. The
credit agreement was amended in September 1996 increasing the amount
available under the revolving credit facility to $17,000,000. Repayment of
borrowings under this revolving credit facility is subordinated to the bank
borrowing referred to above and is secured by subordinate liens on
substantially all of the Company's assets. Interest on outstanding amounts
under the credit agreement is payable monthly at the prime rate plus one
percent. In December 1996, the Board of Directors of the Company authorized
an amendment to the credit agreement with Von Roll increasing the maximum
amount available under the revolving credit facility to $19,000,000 and
subsequently the Company increased its borrowings by $2,000,000.

Von Roll has also guaranteed the Company's payment obligations under the
Company's scrap brokerage and service agreements. The guaranty is for a
maximum of $5,000,000 and will expire 30 days after termination of the scrap
brokerage and service agreements.

The year ended November 30, 1996, reflects reduced liquidity as
compared to earlier periods. This was primarily a result of funding capital
improvements, primarily related to the modernization program. Capital
expenditures during fiscal 1996, 1995 and 1994 were $17,240,000, $14,634,000
and $32,891,000, respectively. In fiscal 1997, the Company expects to be
profitable and for capital expenditures to decline. At November 30, 1996,
the Company had total outstanding indebtedness (bank and Von Roll) of
$37,764,000. Remaining availability under the bank revolving credit facility
is $6,736,000. At the present time, liquidity to fund the Company's
operations and capital expenditures depends on outside financing.

On February 27, 1997, the bank agreed to a temporary increase in the maximum
amount available inder its credit facility from $20,000,000 to $23,500,000.
The increase in availability is only in effect through May 31, 1997.
In addition, the Company anticipates that with the continued support from
its majority stockholder, it will be able to secure additional borrowings to
meet its anticipated liquidity requirements.

Net cash used in operating activities was $1,172,000 in fiscal 1996 as
compared to cash provided by operations of $5,328,000 in fiscal 1995,
primarily as a result of an operating loss for fiscal 1996. Offsetting the
decrease in cash flows was a decrease in other assets of $4,401,000 and an
increase in accounts payable of $3,056,000. As a result, working
capital decreased by $1,779,000 for fiscal 1996.

Net cash used in investing activities increased $2,606,000 to $17,240,000
in fiscal 1996 as compared to $14,634,000 for fiscal 1995, reflecting an
increase in capital expenditures. Capital expenditures for 1994 were
$32,891,000. Capital expenditures for fiscal 1997 are anticipated to be
$6,800,000 primarily for the melt shop. There were no significant cash
flows from investing activities other than capital expenditures in fiscal
1996, 1995 and 1994.

In fiscal 1994, cash flows from financing activities were $10,764,000 and
in fiscal 1995, cash flows from financing activities decreased $1,734,000 to
$9,030,000 primarily from the Company's bank borrowings to fund the
modernization program. In fiscal 1996, cash flows provided by financing
activities increased $9,334,000 to $18,364,000 primarily from borrowings from
its parent to fund the modernization program.

Recently Issued Accounting Standards

The Company has not adopted Statement of Financial Accounting Standards No.
121, "Accounting for the Impairment of Long-lived Assets and for Long-lived
Assets to Be Disposed Of" (SFAS 121). SFAS 121 was issued in March 1995 and
is effective for fiscal years beginning after December 15, 1995. The Company
believes that the adoption of this accounting standard will not have a
material effect on the Company's consolidated financial position or results
of operations. The Company has not adopted Statement of Financial Accounting
Standards No. 123, "Accounting for Stock-based Compensation" (SFAS 123).
SFAS 123 was issued in October 1995 and is effective for financial statements
for fiscal years beginning after December 15, 1995. SFAS 123 allows for
alternative methods of accounting for stock-based compensation arrangements
with employees. The Company currently anticipates remaining on APB Opinion
No. 25 and will provide supplemental pro-forma net (loss) earnings and per
share data giving consideration to the fair value of stock options as an
expense.

Environmental.

Future Trends Commentary.

While the Company has not yet fully realized all the anticipated savings
from its modernization program, the Company believes these savings are
achievable. Much of the Company's future profitability improvement will
depend on the timing of achieving such savings and on the spread between
scrap prices and the Company's selling prices. The Company has also
instituted an aggressive cost reduction effort to reduce its product cost.
Preliminary reviews have shown this is achievable and is aggressively
pursuing additional cost reductions. The Company's ability to pass through
scrap cost increases in its selling prices will also be an important element
in any improvement in the Company's future profitability.

Net Operating Loss Carryforwards.

At November 30, 1996 the Company had net operating loss ("NOL")
carryforwards for Federal income tax purposes of $50,090,000, which expire
in the years 1997-2011.

Management believes that it is more likely than not that certain of its
NOL carryforwards will be utilized prior to their expiration. This belief is
based upon the factors discussed in the following paragraph.

In fiscal 1993, the Company commenced a modernization program which
included a new technology for making steel called the Consteel Process. The
Company completed this program in September 1996 with the installation of
its new caster. Delays upon transitioning to the new caster resulted in
inefficiencies and cost overruns. Management is addressing such issues and
expects to realize the anticipated efficiencies and achieve the previously
anticipated cost savings beginning in fiscal 1997. Additionally,
implementation of a cost reduction program in the early part of fiscal 1997
is projected to reduce costs. Also, the Company operates in a highly
cyclical industry and consequently has a history of generating and
subsequently utilizing significant amounts of NOL carryforwards.

The Tax Reform Act of 1986 contains provisions materially limiting the
use, INTER ALIA, of NOL carryforwards after an "ownership change" (as
defined). In general, an ownership change will occur only if there has been
a change in the stock ownership of a corporation of more than 50 percentage
points during a three-year "testing period", generally the three-year period
preceding the date of the change in stock ownership in question. Transactions
involving stockholders individually holding less than 5% of the voting stock
generally are not taken into account, however, in determining whether there
has been such a change. Transactions which may result in an ownership change
can arise in any number of ways including sales or other transfers by
existing stockholders, new issuances of shares, issuance of options, and
redemptions. See Item 12 "Security Ownership of Certain Beneficial Owners
and Management."

There can be no assurance that future transactions involving shares of
stock in the Company including, without limitation, issuances of certain
types of preferred stock, will not result in a more than 50 percentage point
ownership change within the meaning of the Internal Revenue Code which might
therefore result in a material curtailment of the ability of the Company to
avail itself of its NOL carryforwards.

Item 8. Financial Statements and Supplementary Data.

See Index on Page F-1.

NEW JERSEY STEEL CORPORATION
AND SUBSIDIARY

Index to Consolidated Financial Statements and Schedule

Page
Number

Independent Auditors' Report F-2

Consolidated Financial Statements:
Consolidated Balance Sheets - November 30, 1996 and 1995 F-3
Consolidated Statements of Operations - Years ended
November 30, 1996, 1995 and 1994 F-4
Consolidated Statements of Stockholders' Equity - Years
ended November 30, 1996, 1995 and 1994 F-5
Consolidated Statements of Cash Flows - Years ended
November 30, 1996, 1995 and 1994 F-6
Notes to Consolidated Financial Statements F-7

Schedule II - Valuation and Qualifying Accounts - Years ended
November 30, 1996, 1995 and 1994 F-21

Schedules other than that listed above are omitted as the required
information is either not applicable or is included in the
consolidated financial statements or notes thereto.

Independent Auditors' Report

The Board of Directors and Stockholders
New Jersey Steel Corporation:

We have audited the consolidated financial statements of New Jersey Steel
Corporation and subsidiary as listed in the accompanying index. In
connection with our audits of the consolidated financial statements, we
also have audited the financial statement schedule as listed in the
accompanying index. These consolidated financial statements and financial
statement schedule are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements and financial statement schedule 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 consolidated financial position
of New Jersey Steel Corporation and subsidiary as of November 30, 1996 and
1995, and the results of their operations and their cash flows for each of
the years in the three-year period ended November 30, 1996 in conformity with
generally accepted accounting principles. Also in our opinion, the related
financial statement schedule, when considered in relation to the basic
consolidated financial statements taken as a whole, presents fairly, in all
material respects, the information set forth therein.

KPMG Peat Marwick LLP

Short Hills, New Jersey
January 10, 1997, except as to note 8,
which is as of February 27, 1997

F-2
- -----------------------------------------------------------------------------

NEW JERSEY STEEL CORPORATION
AND SUBSIDIARY

Consolidated Balance Sheets

November 30, 1996 and 1995

(Dollars in Thousands, Except Per Share Data)
<TABLE>

Assets 1996 1995
-----------------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 13 61

Receivables:
Trade, less allowance for
doubtful receivables of $2,307
and $2,147 in 1996 and 1995,
respectively 21,273 22,164
Trade - affiliate 2,458 1,538
Other 542 293
-----------------------
Net receivables 24,273 23,995

Inventories 15,990 15,276
Prepaid expenses and other current assets 412 508
Deferred income taxes 270 837
-----------------------
Total current assets 40,958 40,677

Property, plant and equipment, net 91,607 82,365
Other assets 1,422 5,691
Deferred income taxes 4,630 4,063
Real estate held for sale 12,753 13,447
-----------------------
$151,370 146,243
=======================
Liabilities and Stockholders' Equity

Current liabilities:
Current installments of long-term debt 1,500 1,125
Accounts payable - trade 32,020 28,514
Due to parent 2,035 789
Accrued expenses 4,152 7,219
-----------------------
Total current liabilities 39,707 37,647
-----------------------
Note payable - bank 13,264 11,900
Long-term debt, less current installments 6,000 6,375
Note payable - parent 17,000 -

Stockholders' equity:
Preferred stock, $.01 par value.
Authorized 5,000,000 shares; none issued - -
Common stock, $.01 par value.
Authorized 15,000,000 shares; issued and
outstanding 5,920,500 shares in 1996
and 1995 59 59
Additional paid-in capital 134,070 134,070
Accumulated deficit (58,730) (43,808)
-----------------------
Total stockholders' equity 75,399 90,321

Commitments and contingencies
-----------------------

$151,370 146,243
=======================
</TABLE>
See accompanying notes to consolidated financial statements.

F-3
- --------------------------------------------------------------------------

NEW JERSEY STEEL CORPORATION
AND SUBSIDIARY

Consolidated Statements of Operations

Years ended November 30, 1996, 1995 and 1994

(Dollars in Thousands, Except Per Share Data)

<TABLE>

1996 1995 1994
---------------------------
<S> <C> <C> <C>
Net sales $137,560 128,319 128,605
Net sales - affiliate 7,649 8,917 9,150
Cost of sales 149,445 129,253 128,733
---------------------------
Gross (loss) profit (4,236) 7,983 9,022

Selling, general and administrative expenses,
including management and technical
consulting fees to Von Roll Ltd. of
$450 in 1996, 1995 and 1994 8,894 7,165 6,997
---------------------------
Operating (loss) income (13,130) 818 2,025
---------------------------
Other (expense) income:
Interest (expense) income (1,498) (633) 43
Rental income 185 151 531
Other expense - (96) -
---------------------------
(1,313) (578) 574
---------------------------
(Loss) earnings before
provision for income
taxes and equity in
operations of investee (14,443) 240 2,599

Provision for income taxes - - -
---------------------------
(Loss) earnings before
equity in operations
of investee (14,443) 240 2,599

Equity in operations of investee (479) 465 -
---------------------------
Net (loss) earnings $(14,922) 705 2,599
===========================
Net (loss) earnings per common share $ (2.52) .12 .44
===========================
Weighted average number of common
shares outstanding 5,921 5,903 5,883
===========================
</TABLE>
See accompanying notes to consolidated financial statements.

F-4
- ---------------------------------------------------------------------------

NEW JERSEY STEEL CORPORATION
AND SUBSIDIARY

Consolidated Statements of Stockholders' Equity

Years ended November 30, 1996, 1995 and 1994

(Dollars in Thousands, Except Per Share Data)
<TABLE>
Capital Stock
----------------------------------
Preferred stock Common Stock
----------------------------------
$.01 $.01 Addi- Total
par par tional Accum- stock
value value paid-in ulated holders
shares Amount shares Amount capital deficit equity
---------------------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balances at
November 30,
1993 - $ - 5,873,870 $ 59 133,676 (47,112) 86,623

Common stock
options
exercised - - 19,500 - 228 - 228
Net earnings - - - - - 2,599 2,599
---------------------------------- -------------------------
Balances at
November 30,
1994 - - 5,893,370 59 133,904 (44,513) 89,450

Common stock
options
exercised - - 27,130 - 166 - 166
Net earnings - - - - - 705 705
---------------------------------- -------------------------
Balances at
November 30,
1995 - - 5,920,500 59 134,070 (43,808) 90,321

Net loss - - - - - (14,922)(14,922)
---------------------------------- -------------------------
Balances at
November 30,
1996 - $ - 5,920,500 $ 59 134,070 (58,730) 75,399
================================== =========================
</TABLE>
See accompanying notes to consolidated financial statements.

F-5
- ------------------------------------------------------------------------------

NEW JERSEY STEEL CORPORATION
AND SUBSIDIARY

Consolidated Statements of Cash Flows

Years ended November 30, 1996, 1995 and 1994

(Dollars in Thousands)

<TABLE>

1996 1995 1994
------------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net (loss) earnings $(14,922) 705 2,599
Adjustments to reconcile net (loss)
earnings to net cash (used in) provided
by operating activities:
Depreciation 8,026 6,703 5,556
Provision for losses on trade receivables 160 330 742
Loss on sale of fixed assets 175 - -
Loss (income) from equity investment 479 (465) -
Changes in assets and liabilities:
Increase in net receivables (438) (1,229) (4,613)
(Increase) decrease in inventories (714) (423) 7,216
Decrease (increase) in prepaid
expenses and other current assets 96 730 (699)
Decrease (increase) in other assets 4,521 (1,295) (440)
Increase in accounts payable - trade 3,506 690 6,349
(Decrease) increase in due to parent
and accrued expenses (2,061) (418) 3,218
------------------------
Net cash (used in) provided by
operating activities (1,172) 5,328 19,928
------------------------
Cash flows from investing activities
- capital expenditures (17,240)(14,634)(32,891)
------------------------
Cash flows from financing activities:
Net borrowings from bank credit facility 1,364 1,364 10,536
Proceeds from Parent credit agreement 17,000 - -
Proceeds from long-term debt - 7,500 -
Proceeds from exercise of stock options - 166 228
------------------------
Net cash provided by financing
activities 18,364 9,030 10,764
------------------------
Net decrease in cash and cash
equivalents (48) (276) (2,199)

Cash and cash equivalents at beginning of year 61 337 2,536
------------------------
Cash and cash equivalents at end of year $ 13 61 337
========================
</TABLE>
See accompanying notes to consolidated financial statements.

F-6
- ---------------------------------------------------------------------------

NEW JERSEY STEEL CORPORATION
AND SUBSIDIARY

Notes to Consolidated Financial Statements

November 30, 1996, 1995 and 1994

(Dollars in Thousands, Except Per Share Data)

(1) Ownership and Summary of Significant Accounting Policies

Ownership and Nature of Operations

New Jersey Steel Corporation (the Company) and subsidiary are majority owned
by Von Roll Holding Ltd. (Von Roll), a company based in Switzerland. The
Company has one subsidiary, N.J.S.C. Investment Co., Inc., and operates in
one industry segment, the manufacture and sale of steel products. The
Company is a steel mini-mill which is designed to convert scrap metal into
steel, operating at a high capacity utilization and employing modern
technology to produce steel reinforcing bars (rebar) which are sold primarily
to rebar fabricators, mine roof bolt manufacturers and steel service centers.
The Company's steel reinforcing bars are used primarily in the construction
industry.

Business and Other Risk

The Company grants trade credit to customers, substantially all of which are
located in the Northeastern United States. During the year ended November 30,
1996, the Company generated sales to four customers representing 15%, 15%,
15% and 12% of net sales. During the year ended November 30, 1995, the
Company generated sales to three customers representing 17%, 13% and 12% of
net sales. During the year ended November 30, 1994, the Company generated
sales to three customers representing 21%, 11% and 10% of net sales. At
November 30, 1996 and 1995, the Company's ten largest customer trade
receivable accounts aggregated approximately 93% and 92%, respectively, of
trade receivables.

The principal raw material used in the Company's mini-mill is scrap steel.
The Company purchases scrap through outside brokers, principally one broker
through which the Company purchased approximately 97%, 98% and 87% of its
total scrap purchases in 1996, 1995 and 1994, respectively. The purchase
prices for scrap are dependent upon market conditions, as is the ultimate
sales price of the Company's finished rebar. The Company's operating results
will be affected by the changing conditions affecting the current prices of
scrap and rebar. Due to the impact of the winter weather in the Northeast on
the construction market, the Company typically experiences a seasonal period
of lower sales in winter months, when inventory levels are built.

The Company's manufacturing processes consume large amounts of electricity
provided by Jersey Central Power & Light Company under a contract which
allows the Company to purchase its electricity at a reduced cost in return
for the utility's right to periodically interrupt service. The number and
duration of the service interruptions are contractually limited. The Company
believes that the savings in the cost of electricity more than offsets any
production which might be lost as a result of such interruptions.

F-7
- ------------------------------------------------------------------------------

The Company's mill is classified, in the same manner as similar steel mills
in the industry, as generating hazardous waste due to the production of dust.
The Company collects the dust resulting from its melting operation through
an emissions control system and manages it through a waste recycling firm.

The mill operates pursuant to permits issued by various regulatory agencies.
Should the respective regulatory agencies impose substantially more
restrictive operating conditions upon the renewal of the permits, the
Company's operations could be substantially and adversely affected. For
additional information with respect to environmental matters see note 10.

The Company has substantially completed a plant modernization program which
included the installation of the Consteel continuous scrap feed process,
pollution control system and a new continuous caster. The Company has
experienced substantial difficulties in getting the new equipment on line
and working smoothly. The future profitability of the Company is contingent
upon, among other factors, the ability to correct such difficulties and
realize operational efficiencies expected from the new equipment.

The steel industry is cyclical in nature. The Company's sales are primarily
derived from products sold to the construction industry, which is also
cyclical and affected by, among other factors, the level of consumer
confidence and prevailing economic conditions.

Revenue Recognition

The Company recognizes revenue upon product shipment.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiary. All significant intercompany balances and
transactions have been eliminated in consolidation.

Inventories

Inventories are stated at the lower of cost or market value. Cost is
determined using the first-in, first-out method.

Property, Plant and Equipment

Property, plant and equipment is stated at cost.

Depreciation of plant and equipment is calculated using the straight-line
method over the estimated useful lives of the assets ranging from 5 to 18
years. Repairs and maintenance are expensed as incurred.

Real Estate Held for Sale

Real estate held for sale, which had been held for investment, consists
principally of land, bulkhead and buildings and is stated at net depreciated
cost of $12,753 and $13,447 at November 30, 1996 and 1995, respectively.
Accumulated depreciation amounted to $3,113 and $2,607 as of November 30, 1996
and 1995, respectively. The carrying value of these assets approximates the
estimated net realizable value, less estimated costs to sell. Depreciation
has been calculated using the straight-line method over the estimated useful
lives of the bulkhead and buildings ranging from 18 to 25 years.

In December 1995 the Board of Directors approved the closure of the Company's
fabrication operations in Bowie, Maryland. This matter did not have a
material adverse effect on the Company's consolidated financial position or
results of operations. The related land and land improvements were
reclassified as held for sale in fiscal 1996.

Equity Investment

The Company accounts for its ownership interest in an investee using the
equity method.

Supplemental Cash Flow Information

The Company paid no cash for income taxes during the years ended November 30,
1996, 1995 and 1994. Total interest paid totaled approximately $3,437,
$2,035 and $1,602 for the years ended November 30, 1996, 1995 and 1994,
respectively. Total interest capitalized totaled approximately $1,697,
$1,402 and $1,602 for the years ended November 30, 1996, 1995 and 1994,
respectively.

Per Common Share Amounts

Net (loss) earnings per common share is computed by dividing net (loss)
earnings by the weighted average number of common shares outstanding during
the year. The effect on earnings per common share resulting from the
assumed exercise of outstanding stock options is antiludilutive in 1996 and
immaterial in 1995 and 1994.

Income Taxes

The Company accounts for income taxes pursuant to Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS 109), which
utilizes the asset and liability method of accounting for income taxes.
Under the asset and liability method, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of
a change in tax rates is recognized in income in the period that includes
the enactment date. A valuation allowance has been recorded to estimate the
portion of net deferred tax assets which management does not presently
consider more likely than not to be realized.

Financial Instruments

The carrying amounts of cash, receivables, and other current assets and
liabilities approximate fair value due to the short-term maturity of these
instruments. The fair value of the Company's long-term debt approximates
fair value due to the variable rate of interest on such debt.

Recently Issued Accounting Standards

Use of Estimates

In conformity with generally accepted accounting principles, management of
the Company has made a number of estimates and assumptions relating to the
reporting of assets and liabilities and the disclosure of contingent assets
and liabilities to prepare these consolidated financial statements. Actual
results could differ from those estimates.

(2) Transactions with Von Roll Holding Ltd.

In accordance with a technical services and management consulting agreement
with Von Roll, during each of the years ended November 30, 1996, 1995 and
1994, the Company charged $450 to selling, general and administrative
expenses for management and technical consulting services provided by Von
Roll. The agreement is on a year-to-year basis. The fee payable under the
agreement is renegotiated annually. The Company has agreed to a fee of $450
under this agreement for the year ending November 30, 1997.

Von Roll has also guaranteed the Company's payment obligations under the
Company's scrap brokerage and service agreements. The guaranty is for a
maximum of $5 million and will expire 30 days after termination of the scrap
brokerage and service agreements. In addition, during 1996, the Company
entered into a credit agreement with Von Roll (see Footnote 8).

(3) Inventories

Inventories at November 30, 1996 and 1995 consist of the following:

1996 1995
----------------
Finished goods $ 5,070 5,709
Work in process 1,933 341
Raw materials, spare parts
and supplies 8,987 9,226
----------------
$ 15,990 15,276
================

(4) Property, Plant and Equipment

Property, plant and equipment at November 30, 1996 and 1995 consists of
the following:

1996 1995
------------------
Land and land improvements $ 1,641 1,944
Steel mill and related facilities 62,861 62,717
Machinery and equipment 116,821 89,698
Construction in progress 4,240 18,706
------------------
185,563 173,065
Less accumulated depreciation 93,956 90,700
------------------
$ 91,607 82,365
==================

(5) Investments and Transactions with Related Parties

The Company has an investment in Excel Mining Systems, Inc. (Excel), a mine
roof bolt manufacturer and a customer of the Company. The investment, with
an original cost and carrying value at November 30, 1996 of $750, is
represented by 750 shares of non-voting 9% cumulative preferred stock and
approximately 31% of Excel's outstanding common stock. The preferred stock
is redeemable on December 31, 1998 or earlier, if a certain earned surplus
level is reached, as defined. The preferred stock has a redemption price of
one thousand dollars per share plus accrued but unpaid dividends, plus a
final dividend, as defined, which, in substance, represents a 50% share of
Excel's earned surplus at the redemption date. Upon redemption of the
preferred stock, the Company's common stock investment in Excel will be
entitled to participate in the earnings of Excel. Through November 30, 1994,
the effect of the investment on the Company's consolidated financial
position and results of operations was immaterial. However, as described in
the following paragraph, during fiscal 1995 Excel acquired another mine roof
bolt business and expanded its operations significantly.

During 1995, the Company agreed to guarantee up to $7,000 of Excel's revolving
credit facility in connection with Excel's acquisition of a mine roof bolt
business. The guarantee expired on November 30, 1995. In exchange for such
guarantee, the Company received an additional common equity interest in Excel
to bring its aggregate common ownership interest to 31%. Receivables due
from Excel are included in trade - affiliates in the accompanying
consolidated balance sheets and amount to $2,458 and $1,538 at November 30,
1996 and 1995, respectively. Receivables from Excel carry trade terms
consistent with its other customers.

Excel's fiscal year ends on December 31, with its accounts being audited
annually. Summary unaudited financial information for Excel as of and for
the year ended November 30, 1996 is as follows:

1996 1995
-------------------------
Current assets $ 10,827 12,396
Current liabilities 11,597 11,292
-------------------------
Working capital deficit (770) 1,104

Property, plant and equipment, net 13,504 19,025
Other assets 5,674 1,153
Long-term debt and other liabilities (17,556) (19,472)
Mandatory redeemable preferred stock (750) (750)
-------------------------
Stockholders' equity $ 102 1,060
=========================
Sales $ 69,112 71,494
=========================
Net (loss) earnings $ (958) 930
=========================

Under the terms of a 1990 agreement, the Company purchased from a
significant customer land and buildings located in Keasby, New Jersey which
are included in the accompanying consolidated balance sheets as real estate
held for sale. The agreement also provided that the Company lease the
property back to the Customer under a two-year operating lease which expired
in November 1992, at which point the Customer leased the property on a
month-to-month basis. During fiscal 1994, the Customer stopped leasing the
property; however, an affiliate of a stockholder of the Customer leased a
portion of the property on a month-to-month basis. Rental income from the
Customer and an affiliate of the Customer for the year ended November 30,
1994 was approximately $480.

(6) Income Taxes

The components of the deferred income tax assets and liabilities arising
under SFAS 109 at November 30, 1996 and 1995 are as follows:

1996 1995
-------------------
Deferred tax assets:
Federal and state net operating loss carryforwards $ 18,422 11,670
Other tax credit carryforwards 4,842 4,585
Equity investment 800 799
Deferred compensation 12 1,186
Other deductible temporary differences 2,684 1,839
Valuation allowances (13,185) (7,468)
-------------------
$ 13,575 12,611
===================
Deferred tax liabilities:
Fixed asset basis differences 7,579 6,718
Other taxable temporary differences 1,096 993
-------------------
$ 8,675 7,711
===================

For tax purposes, the Company has available at November 30, 1996 net
operating loss (NOL) carryforwards available to offset future taxable income
for regular federal income tax purposes, which expire as follows:

1997 $ 1,912
1998 11,524
1999 4,601
2006 2,969
2008 4,608
2009 1,611
2010 5,002
2011 17,863
-------
$ 50,090
=======

The Company also has investment tax credit carryforwards totaling
approximately $856, which expire as follows: $52 in 1997; $347 in 1998;
$217 in 1999; and $240 thereafter. Additionally, in conjunction with the
Alternative Minimum Tax (AMT) rules, the Company has available AMT credit
carryforwards of approximately $1,091, which may be used indefinitely to
reduce regular federal income taxes. The Company has also received approval
for $4,315 of recycling credits which are available to offset certain state
income taxes ($2,848, net of federal benefit). These credits are subject
to certain limitations, with an unlimited carryforward. A valuation
allowance has been recorded at November 30, 1996 and 1995 for that portion
of deferred tax assets which is not presently considered more likely than
not to be realized. The amount of the deferred tax asset considered
realizable, however, could be reduced in the near term if estimates of
future taxable income during the NOL loss carryforward periods previously
described are reduced. The valuation allowance increased $5,717 in fiscal
1996 and decreased $114 and $1,446 in fiscal 1995 and 1994, respectively.

Even though the Company incurred a significant loss during 1996, management
believes that it is more likely than not that it will generate taxable
income sufficient to realize a portion of the tax benefit associated with
future deductible temporary differences, NOL carryforwards and tax credit
carryforwards prior to their expiration. This belief is based upon the
factors discussed below:

(i) The Company commissioned the new continuous casting machine in
September 1996. Delays upon transitioning to the new caster
negatively impacted productivity in the melt shop and caused higher
billet costs. The Company believes that it has adequately addressed
the production and other problems it has encountered and that
anticipated production levels will be achieved in fiscal 1997.

(ii) The Company has instituted a cost reduction effort to reduce product
cost. Management believes that such cost savings should begin to be
realized in the latter half of fiscal 1997. In addition, the Company
operates in a highly cyclical industry which has contributed to
earnings or loss results in prior years. There is no assurance,
however, that net earnings will be achieved in future years.

The provision for income taxes for the years ended November 30, 1996, 1995
and 1994 differs from the expected (benefit) provision for federal income
taxes as follows:

1996 1995 1994
---------------------------
Computed expected (benefit) provision for
federal income taxes $(4,911) 82 884
Change in the beginning-of-the year balance of
the valuation allowance for deferred
tax assets allocated to the provision
for income taxes 5,717 (114) (1,446)
Expenses (loss) with no tax benefit 16 15 222
State income tax (benefit) expense before
change in valuation allowance (net of
federal income tax benefit) (787) 17 117
Other (35) - 223
---------------------------
$ - - -
===========================

(7) Stockholders' Equity

Under the terms of the New Jersey Steel Corporation's Incentive Stock Option
Plan (ISOP) and 1996 Stock Option Plan, certain key employees may be granted
options to purchase up to 503,000 and 300,000 shares, respectively, of
common stock. Options are issued at prices equal to the fair market value
of the Company's common stock at the date of grant. Options become
exercisable ratably over a five-year period. Options which expire or are
canceled become available for future grants. The ISOP was terminated by its
terms in 1995, and no additional options may be granted thereunder.

Information on common stock options is as follows:

Incentive stock options
------------------------
Price
Shares per share
------------------------
Outstanding at November 30, 1993 129,130 $ 3.00-14.00
Granted - -
Exercised (19,500) 11.50-11.75
--------- -----------
Outstanding at November 30, 1994 109,630 3.00-14.00

Granted - -
Exercised (27,130) 6.10
--------- -----------
Outstanding at November 30, 1995 82,500 3.00-14.00

Granted 150,000 8.00-8.375
Exercised - -
--------- -----------
Outstanding at November 30, 1996 232,500 $ 3.00-14.00
========= ===========
Exercisable 82,500 $ 3.00-14.00
========= ===========

(8) Bank Borrowings

On June 6, 1996, the Company entered into an Amended and Restated Loan and
Security Agreement (the loan agreement) with its bank to increase the maximum
amount available under its credit facility from $17,500 to $20,000 and to
extend the maturity date from April 30, 1997 to May 1, 1998. The maturity
date on the Company's $7,500 term loan was also extended from December 31,
2000 to May 1, 2001. The loan agreement also amended certain financial
covenants. Borrowings under the credit facility and term loan are secured by
substantially all of the Company's assets. Principal payments under the term
loan are due in monthly installments of $125 beginning December 1, 1996 with
a final payment of $875 due at maturity. Interest on the term loan and
outstanding amounts under the credit facility are payable at the prime rate
plus 1% (9.25% at November 30, 1996).

The bank requires the Company to meet certain financial covenants such as
minimum working capital, current ratio, maximum total liabilities to tangible
net worth, and certain profitability, as defined, and net worth requirements.
At November 30, 1996 the Company was not in compliance with its working
capital, tangible net worth and capital expenditures provisions. On February
7, 1997 the Company obtained from the bank a waiver of noncompliance as of and
for the year ended November 30, 1996. On February 27, 1997, the bank amended
the loan agreement with respect to the financial statement covenants.
Covenants amended include tangible net worth, working capital, capital
expenditures and cash coverage ratio, as defined.

On February 27, 1997, the bank agreed to a temporary increase in the maximum
amount available under its credit facility from $20,000 to $23,500. The
increase in availability is only in effect through May 31, 1997.

Concurrently with the execution and delivery of the loan agreement, the
Company entered into a credit agreement dated as of June 6, 1996 (the credit
agreement) with Von Roll Holding AG, the Company's majority stockholder. The
credit agreement provides a $15,000 revolving credit facility to the Company
which matures May 1, 1998. In September 1996, the Board of Directors of the
Company authorized an amendment to the credit agreement increasing the
maximum amount available under the credit agreement facility to $17,000.
Repayments of borrowings under this credit facility are subordinated to the
loan agreement and are secured by subordinate liens on substantially all of
the Company's assets. Interest on outstanding amounts under the credit
agreement is payable monthly at the prime rate plus 1% (9.25% at November 30,
1996). At November 30, 1996, $17,000 is outstanding under the credit
agreement. Accrued interest payable to Von Roll was approximately $849 at
November 30, 1996.

In December 1996, the Board of Directors of the Company authorized an
amendment to the credit agreement with the parent increasing the maximum
amount available under the revolving credit facility to $19,000 and
subsequently the Company increased its borrowings by $2,000. The Company
anticipates that with the continued support from its parent, it will be able
to secure additional borrowings in fiscal 1997.

The aggregate maturities of the Company's outstanding borrowings under the
for each of the four years subsequent to November 30, 1996 are as follows:
1997: $1,500; 1998: $31,764; 1999: $1,500; and 2000: $1,500.

(9) Benefit Plans

The Company has a 401(k) plan which allows employees, upon meeting eligibility
requirements, to make contributions to the plan, and under various conditions
allows the Company to contribute to the plan at percentages specified in the
plan agreement. Company contributions to the plan amounted to $186, $178 and
$175 in 1996, 1995 and 1994, respectively.

The Company had a voluntary, nonqualified plan of deferred compensation
covering a select group of key employees. Under the terms of the plan, key
employees were eligible to defer specific percentages of their compensation
until their retirement or other termination of employment. On December 12,
1995, the Company's Board of Directors approved the termination of this plan
effective as of the close of business on December 31, 1995. The assets of
the plan were distributed to the participants in January 1996. Company
contributions to the plan amounted to $28, $528 and $261 in 1996, 1995 and
1994, respectively.

During the years ended November 30, 1995 and 1994, the Company charged $97
and $189, respectively, to operations for amounts paid under a profit-sharing
plan for hourly and salaried employees, as authorized by the Board of
Directors.

(10) Commitments and Contingencies

In September 1994, the New Jersey Department of Environmental Protection
(NJDEP) issued a "Permit to Construct, Install or Alter Control Apparatus or
Equipment" a "Temporary Certificate to Operate" and a "Prevention of
Significant Deterioration Permit" (the NJDEP Permit). The NJDEP Permit
authorized the Company to install the Consteel Process at the Sayreville Mill,
including a Continuous Emissions Monitoring System (CEMS) equipment and
directed that there be a stack test. The CEMS equipment was started in
April 1995 and the stack test was conducted in February 1996 with the results
submitted to the NJDEP in March 1996. The CEMS data and stack test results
indicated that certain emissions exceed the levels contained in the permit.
In conjunction with the submission of these results, the Company applied for
a modification of its permit to reflect actual operations. Until such time
as a new permit is issued, there is a question as to whether the Company is
in violation of the NJDEP permit and, as a consequence, subject to fines and
penalties, the amounts of which are subject to the discretion of the NJDEP.
Discussions with the NJDEP regarding how to proceed in this matter and the
application process for a permit with revised limits are continuing. The
Company believes that the ultimate outcome of this matter will not have a
material adverse effect on the Company's financial position or results of
operations.

In March 1996, the Natural Resources Defense Council (NRDC) and the Public
Interest Research Group of New Jersey, Inc. (PIRG) commenced a lawsuit
against the Company in the United States District Court of New Jersey. The
lawsuit is based on the Company's CEMS reports submitted to the NJDEP and
claims that the exceedances since April 1995 constitute violations of the
Clean Air Act which are not being pursued by the NJDEP. The complaint seeks
unspecified fines and penalties for the alleged violations and for an
injunction mandating operation of the Sayreville Mill in accordance with its
permit. The Company filed an answer with the United States District Court
on April 10, 1996. Since that time, the State of New Jersey has intervened
in the litigation. The Company believes that the ultimate outcome of this
matter will not have a material adverse effect on the Company's financial
position or results of operations.

In March 1994, Novo-Plez SA and NASCO Brokers, Inc. (the Claimants), steel
brokers, commenced an arbitration against the Company in the International
Court of Arbitration of the International Chamber of Commerce (the Swiss
Arbitration) seeking damages for steel purchased from the Company which the
Claimants assert was of inferior quality. In March 1996, the Arbitrator
issued an award in favor of the Company denying all the Claimants claims for
losses and damages. The Company was also awarded its fees and expenses
associated with the arbitration.

Egyptian Metals Company (EMC), the customer of the Claimants in the Swiss
Arbitration, and its broker pursued a related claim before the Tribunal de
Commerce in Paris, France (the Paris Action), alleging that the Company was
liable to it for the sale of the defective billets. EMC claimed damages of
approximately $2,121 and an additional claim for payment of one hundred
thousand French francs under the French Code of Civil Procedure. The Company
has not entered an appearance in the Paris Action as, based on the advice of
legal counsel, management believes that the French court is without
jurisdiction over the Company, and that the litigation will ultimately be
dismissed or, if judgment is in fact entered, the Company will have
meritorious defenses against the enforceability of the judgment.

In February 1995, EMC filed a complaint against the Company, Novo-Plez SA
and NASCO Brokers, Inc. in the United States District Court for the District
of New Jersey based on the same transactions as the Paris Action and the
Swiss Arbitration seeking damages against the Company in the amount of
$5,050. Novo-Plez SA and NASCO Brokers, Inc. were dismissed as defendants
by stipulation. Management believes, based on the advice of legal counsel,
that the Company will ultimately prevail in its defense of these claims.

The Company and Von Roll are defendants in an action entitled GARY LUTIN v.
NEW JEREY STEEL CORPORATION, VON ROLL LTD. a/k/a VON ROLL A.G., and et al.
The action was originally commenced in a West Virginia state court in 1991.
The plaintiff has alleged that the defendants conspired to destroy the
business of Advanced Mining Systems, Inc., a company which manufactured roof
support systems for underground coal mines. In 1995, the same plaintiff
filed a second action in the same court against the same parties under the
Federal RICO statutes. The plaintiff seeks unspecified damages in both
actions which he claims to be in excess of $50,000.

A related action entitiled NEW JERSEY STEEL CORPORATION AND VON ROLL HOLDING
A.G. v. GARY LUTIN pending in the Supreme Court of the State of New York,
involves a claim by the Company and Von Roll against Mr. Lutin for libel in
connection with a letter written by Mr. Lutin. In July 1996, Mr. Lutin
filed his answer with counterclaims asserting essentailly the same claims
as were made the two federal actions. The court dismissed the counterclaims
on the ground that there was another action pending for essentially the same
claims in federal court. Mr. Lutin has filed an appeal from the court's
decision.

The Company has been advised by its counsel that, based on the
information available to it, the claims of Mr. Lutin in these matters are
without merit.

The Company is also involved in litigation relating to claims arising out
of its operations in the normal course of business. Such claims against the
Company are generally covered by insurance. In the opinion of management,
any uninsured or unindemnified liability resulting from existing litigation
would not have a material adverse effect on the Company's business or
consolidated financial position. The Company is not aware of any probable
liabilities or related recoveries which would have a material adverse effect
on the Company's consolidated financial position. There can be no assurance
that insurance, including product liability insurance, will be available in
the future at reasonable rates.

The Company is a party to several month-to-month operating leases, primarily
for equipment. Total rent expense in 1996, 1995 and 1994 was approximately
$559, $841 and $574, respectively.

Schedule II
NEW JERSEY STEEL CORPORATION
AND SUBSIDIARY

Valuation and Qualifying Accounts

Years ended November 30, 1996, 1995 and 1994
(Dollars in Thousands)
<TABLE>
Charged Write
Balance to offs
at be- costs net of Balance
ginning and ex- recov- at end
Description of year penses eries of year
- ----------- ------- ------- ------ -------
<S> <C> <C> <C> <C>
Allowance for doubtful accounts
Year ended November 30, 1996 $ 2,147 336 (176) 2,307
Year ended November 30, 1995 1,846 330 (29) 2,147
Year ended November 30, 1994 1,828 742 (724) 1,846
======= ======= ====== =======
Allowance for other receivables
and other assets
Year ended November 30, 1996 $ - 242 - 242
======= ======= ====== =======

</TABLE>
F-20
- -----------------------------------------------------------------------------

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

Not Applicable.

PART III

Item 10. Directors and Executive Officers of the Registrant.

The following table sets forth information regarding the directors and
executive officers of the Company.

Year First
Name of Directors Elected As Principal
and Officers Age A Director Occupation

Walter H. Beebe 56 1978 Partner in law firm of Jacobs
Director Persinger & Parker since
prior to 1992.

H. Georg Hahnloser 53 1978 Chief Operating Officer of Von
Director and Roll Holding Ltd. since
Chairman of February 1995; prior thereto
the Board Executive Vice Board President
and Chief Financial Officer
of Von Roll since prior to
1992.

Robert LeBuhn 64 1995 Private investor since 1995;
Director prior thereto Chairman of
Investor International (U.S.),
Inc. since 1993; prior
thereto President of Investor
International (U.S.), Inc.
since prior to 1992.

Hans G. Trosch 55 1995 Executive Vice President of
Director Von Roll Holding Ltd. and Von
Roll Isola Group Chief
Executive Officer since 1994;
prior thereto President of
Swiss Insulating Works Ltd.,
a subsidiary of Von Roll
Holding Ltd. since 1993; prior
thereto Manager, Electrical
Systems Division, Switzerland,
of Von Roll Isola since prior
to 1992.

Gary A. Giovannetti 46 1997 President and Chief Executive
Director Officer of the Company since
February 1997; prior thereto
Vice President-Sales and
Marketing of the Company
since prior to 1992.

Louis F. Hagan 48 N/A* Vice President-Operations of
the Company since September
1996; prior thereto General
Manager, Operations, of the
Lemont Division of Austeel
Corporation since 1994, prior
thereto, Works Manager of the
Youngstown Division of
Northstar Steel Corp. since
prior to 1992.

Paul Roik 45 N/A* Vice President-Finance and
Treasurer of the Company since
prior to 1992.

John R. Sullivan 51 N/A* Vice President-Human Resources
of the Company since prior to
1992.

- -------------
* Not a Director.

Each of the directors has served continuously since the year in which he
was first elected. Each director holds office until the next annual meeting
of stockholders and until his successor is elected and qualified.

Except for Mr. LeBuhn, none of the directors is a director of any company
(other than the Company) which is subject to the reporting requirements of the
Securities Exchange Act of 1934 or which is a registered investment company
under the Investment Company Act of 1940. Mr. LeBuhn is a director of USAIR
Group, Inc., Cambrex Corporation, Acceptance Insurance Cos., Inc. and Enzon,
Inc.

Each executive officer is appointed by the Board of Directors and holds
office until the first meeting of directors following the annual meeting of
stockholders and until his successor is duly chosen and qualified.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors to file initial reports of
ownership and reports of changes in ownership with the Securities and
Exchange Commission and the NASDAQ. Executive officers and directors are
required by SEC regulations to furnish the Company with copies of all Section
16(a) forms they file. Based on a review of the copies of such forms
furnished to the Company and written representations from the Company's
executive officers and directors, all reports were filed on a timely basis
except for the report of Louis F. Hagan, Vice President, Operations, of the
Company. Mr. Hagan did not file a Form 3 disclosing his status as a reporting
person when he joined the Company in September 1996, which disclosure was
subsequently reported in an untimely filed Form 5.

Item 11. Executive Compensation.

The Summary Compensation Table below sets forth individual compensation
information for each of the Company's last three fiscal years on the Chief
Executive Officer ("CEO") and the four other most highly paid executive
officers who were serving as such at the end of the Company's fiscal year
ended November 30, 1996 and whose total annual salary and bonus for such
fiscal year exceeded $100,000.

SUMMARY COMPENSATION TABLE
<TABLE>
Long Term
Compensation

Annual Compensation Awards

Name and Securities
Principal Fiscal Underlying All Other
Position Year Salary Bonus Options/SARs Compensation*
<S> <C> <C> <C> <C> <C>
Kenneth J. Leonard 1996 $145,833** $43,750 100,000 $111,653
CEO, President 1995 - - - -
1994 - - - -

Gary A. Giovannetti 1996 137,400 - 50,000 5,118
Vice President- 1995 132,100 - - 36,278
Sales and Marketing 1994 127,000 - - 26,849

Louis F. Hagan 1996 38,686*** - - 41,187
Vice President- 1995 - - - -
Operations 1994 - - - -

Paul Roik 1996 147,200 - - 8,930
Vice President- 1995 141,500 - - 31,403
Finance and Treasurer 1994 136,000 - - 28,109

John R. Sullivan 1996 120,200 - - 2,925
Vice President- 1995 115,500 - - 6,030
Human Resources 1994 112,000 - - 5,130
</TABLE>
- ------------------------

* (A) Includes amounts allocated under the Company's Executive Thrift
Plan. For the one month in fiscal 1996 prior to its termination, the amounts
allocated under the Company's Executive Thrift Plan were as follows: Gary A.
Giovannetti - $1,541 and Paul Roik - $1,541. The Executive Thrift Plan was
terminated effective December 31, 1995.

(B) Does not include interest accruing during 1996 aggregating
$48,042 on loans to Messrs. Giovannetti, Roik and Sullivan as follows:

G. Giovannetti $14,677
P. Roik $29,762
J. Sullivan $ 3,603

It has been the Company's policy not to require current payment of
such interest. See "Certain Relationships and Related Transactions.

** Mr. Leonard resigned as President, Chief Executive Officer and a
director effective February 21, 1997. Mr. Giovannetti was elected the
President, Chief Executive Officer and a director to fill the vacancies
created by Mr. Leonard's resignation. Under the terms of Mr. Leonard's
employment agreement, he will continue to receive his $250,000 annual salary
through April 30, 1998 and an amount equal to his incentive bonus had he
not resigned.

*** Reflects the amount earned for the period in which Louis Hagan was
employed by the Company. Under his employment agreement, Mr. Hagan receives
a salary of $170,000 per annum.

The above table does not include any amounts for personal benefits
because, in any individual case, such amounts do not exceed the lesser of
$50,000 or 10% of such individual's cash compensation.

The Company is negotiating an employment agreement with Gary A.
Giovannetti. While the agreement has not been finalized, it is expected
that the agreement will provide for an annual base salary of $250,000 and an
incentive bonus. The Company has entered into agreements with Mr. Giovannetti
and Paul Roik to become effective if their employment is terminated and such
termination is related to a "change of control" of the Company (defined in
such agreement to occur if Von Roll no longer control 50% of the voting stock
of the Company or if all or substantially all of the Company's assets are
sold). Upon such an occurrence, Mr. Giovannetti and Mr. Roik will receive
for a period of two years following such termination the salary and incentive
bonus they would have received had their employment not been terminated.

The Company has an employment agreement with Louis F. Hagan, Vice
President, Operations, of the Company. The agreement has a term of two years
and expires September 9, 1998. Mr. Hagan receives a salary of $170,000 per
annum under the agreement.

Option Tables.

The following table sets forth for the CEO and each of the executive
officers named in the Summary Compensation Table, information with respect
to grants of stock options made during the fiscal year ended November 30,
1996.

Option/SAR Grants in Last Fiscal Year
<TABLE>
Potential
Realizable Value
at Assumed Annual
Rates of Stock
Appreciation For
Individual Grants Stock Term
% of Total
Number of Options/
Securities SARs
Underlying Granted to
Options/ Employees Exercise
SARs in Fiscal or Base Expiration
Name Granted Year Price Date 5% ($) 10%($)
<S> <C> <C> <C> <C> <C> <C>
Kenneth Leonard* 100,000 66.7% $8.375 4/30/2006 $565,125 $1,355,725

Gary A.
Giovannetti 50,000 33.3% $8.00 4/10/2006 $252,000 $ 629,600

Louis F. Hagan -- -- -- -- -- --

Paul Roik -- -- -- -- -- --

John Sullivan -- -- -- -- -- --
</TABLE>
- ----------------
* Mr. Leonard has resigned as President and Chief Executive Officer
effective February 21, 1997 and in accordance with the terms of his Stock
Option Agreement with the Company, all unexercised options expire on the date
of termination.

The following table sets forth option exercise activity in the last fiscal
year and the fiscal year-end option values with respect to the CEO and each
of the executive officers named in the Summary Compensation Table.

Aggregated Option Exercises in the Fiscal
Year Ended November 30, 1996 and the
November 30, 1996 Option Values
<TABLE>
Values of
Number of Unexercised
Unexercised In-the-money
Options at Options at
11/30/96 11/30/96

Shares
Acquired Value Exercisable/ Exercisable/
Name On Exercise Realized Unexercisable Unexercisable
<S> <C> <C> <C> <C>
Kenneth J. Leonard* -- -- --/100,000 --/0

Gary A. Giovannetti -- -- 15,000/50,000 0/0

Louis F. Hagan -- -- --/-- --/--

Paul Roik -- -- --/-- --/--

John R. Sullivan -- -- --/-- --/--
</TABLE>
- ----------------
* Mr. Leonard has resigned as President and Chief Executive Officer
effective February 21, 1997 and in accordance with the terms of his Stock
Option Agreement with the Company, all unexercised options expire on the date
of termination.

Compensation of Directors

Mr. LeBuhn receives an annual director's fee of $30,000 and is paid
$1,000 per meeting attended plus reasonable travel expenses. Messrs.
Hahnloser and Trosch are employees of Von Roll and receive no director's fees
as such for serving as directors of the Company. Mr. Leonard, who was an
employee of the Company, received no director's fee as such for serving as a
director of the Company. Mr. Beebe, a member of Jacobs Persinger & Parker,
general counsel to the Company, receives no director's fee as such for serving
as a director of the Company.

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

The following table sets forth certain information regarding the
beneficial ownership as of January 27, 1997 of Common Stock of the Company by
the only persons who, to the knowledge of the Board of Directors, own more
than five percent of the outstanding shares:

Name and Address Amount Owned Percentage
of Beneficial Owner Beneficially of Class

Von Roll Holding Ltd. 3,561,500 60.2%
CH-4563, Gerlafingen
Switzerland

William D. Witter, Inc.* 376,889 6.4%
153 East 53rd Street
New York, New York

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

* As of December 31, 1996, based upon information received by the
Company from Vickers Corporation Reports which reports upon institutional
activity and holdings in the Company's common stock.

Von Roll has sole voting and investment power over the shares it owns.

The following table sets forth certain information regarding the
beneficial ownership as of January 27, 1997 of Common Stock of the Company
by the officers and directors of the Company:

Name of Amount Owned Percentage
Beneficial Owner Beneficially of Class

Walter H. Beebe -- --

H. Georg Hahnloser -- --

Robert LeBuhn 15,000 (1)

Hans G. Trosch -- --

Kenneth J. Leonard 100,000(2)(3) (1)

Gary A. Giovannetti 65,000(2) (1)

Louis F. Hagan -- --

Paul Roik 2,100 (1)

John Sullivan -- --

All directors and executive
officers as a group 207,200(2) (1)

(1) Less than one percent.
(2) Includes shares for which such person or persons holds options.
(3) Mr. Leonard's options expired coincident with his resignation on
February 21, 1997.

All persons listed have sole voting and investment power over the shares
they own. Mr. Hahnloser owns shares of common stock of Von Roll representing
less than .5% of the Von Roll common stock oustanding.

Item 13. Certain Relationships and Related Transactions.

In August 1991, the Company made an investment in Excel Mining Systems,
Inc. ("Excel"), which operates in a mining-related industry. The Company is
the holder of (i) all of Excel's outstanding preferred stock, and (ii)
approximately 31% of Excel's outstanding common stock. Holders of the
preferred stock have the right, as a class, to elect two directors to Excel's
board. Currently, Paul Roik, the Vice President, Finance, of the Company is
a director on Excel's board. Excel is a customer of the Company and purchased
$7,649,000 of rebar in fiscal 1996.

The Company has a Technical Services and Management Consulting Agreement
with Von Roll dated as of April 1, 1987 pursuant to which Von Roll provides
certain management and operational services to the Company. The fee payable
under the Agreement is to be renegotiated annually. The Company was charged
$450,000 in fiscal 1996 and has agreed to a fee of $450,000, based upon the
anticipated services for fiscal 1997. The terms of any extension, amendment
or modification of the Agreement will be no less favorable to the Company
than those that could be obtained from unaffiliated third parties. The
amount of the annual fee and the terms of any extension, amendment or
modification will be approved by the Board of Directors and a majority of
the directors who are not employees of the Company and Von Roll.

The Company on occasion makes loans to employees, including officers,
primarily in connection with purchases of housing. At November 30, 1996,
loans aggregating $846,537 (including accrued interest) were outstanding to
Messrs. Leonard, Giovannetti, Roik, Hagan, Lahita and Sullivan. Mr. Leonard
had a $60,400 interest free bridge loan granted in 1996 due on sale of his
former residence. Mr. Giovannetti had a $150,000 loan made in connection
with his original employment in 1991, to compensate for higher housing costs
in the Sayreville area. Mr. Giovannetti had the right to have the loan
forgiven after 5 years of continuous employment. In February 1997, the Board
of Directors acted to forgive the entire principal and accrued interest on Mr.
Giovannetti's loan, totalling $213,043 at January 31, 1997. Mr. Roik had
loans of $189,300 made at various times between 1985 and 1989. Mr. Hagan
had a $35,750 interest free bridge loan granted in 1996 due on sale of his
former residence. Mr. Sullivan had a $35,000 loan granted in 1993. Mr.
Lahita had a $51,000 loan made in 1989.

It has been the Company's policy not to require current payment of
interest on such loans. At November 30, 1996, the outstanding principal and
accrued interest on loans to the indicated officers (other than Mr.
Giovannetti) was as follows:

Mr. Leonard $ 60,400
Mr. Roik $426,591
Mr. Hagan $ 35,750
Mr. Sullivan $ 45,170
Mr. Lahita $ 68,263
Total $636,174

H. Georg Hahnloser and Hans G. Trosch, directors of the Company, are
executive officers of Von Roll, the majority stockholder of the Company.

Walter H. Beebe, a director, and Thomas W. Jackson, Secretary of the
Company, are partners in the law firm of Jacobs Persinger & Parker, general
counsel to the Company. Jacobs Persinger & Parker also provides legal
services to Von Roll. During the fiscal year ended November 30, 1996, the
Company made payments to that firm for services rendered and disbursements
incurred aggregating $592,888.

PART IV

Item 14. Exhibits, Financial Statements, Schedules, and Reports on Form 8-K.

1. The following financial statements are filed as part of this report:

See Index to Financial Statements and Schedules on page F-1 of this
Report.

2. The following financial statement schedules are filed as part of this
report:

See Index to Financial Statements and Schedules on page F-1 of this
Report.

Schedules other than those listed on the Index to Financial Statements
and Schedules are omitted as the required information is either not
applicable or is included in the financial statements or notes thereto.

3. Exhibits:

3(a) -- Restated Certificate of Incorporation, as amended--Incorporated
by reference to Exhibit 3(a) of the Company's Registration
Statement on Form S-1 (No. 33-13298).

3(b) -- By-laws, as amended--Incorporated by reference to Exhibit 3(b)
to the Company's Annual Report on Form 10-K for the year ended
November 30, 1993 (File No. 0-15838).

4(a) -- Form of Certificate for shares of Common Stock of the Company--
Incorporated by reference to Exhibit 4(a) of the Company's
Registration Statement on Form S-1 (No. 33-13298).

10(a) -- Technical Services and Management Consulting Agreement between
the Company and Von Roll Ltd. dated as of April 1, 1987--
Incorporated by reference to Exhibit 10(e) of the Company's
Registration Statement on Form S-1 (No. 33-13298).

10(b) -- Incentive Stock Option Plan of Company adopted October 2, 1987
with amendments--Incorporated by reference to Exhibit 10(f) of
the Company's Registration Statement on Form S-1 (No. 33-13298).

10(c) -- Form of Stock Option Agreement--Incorporated by reference to
Exhibit 4(b) of the Company's Registration Statement on Form S
-8 No. 33-17435).

10(d) -- Indemnity Agreement between the Company and Von Roll Ltd. dated
as of April 1, 1987--Incorporated by reference to Exhibit 10(g)
of the Company's Registration Statement on Form S-1
(No. 33-13298).

10(e) -- New Jersey Steel Corporation Thrift Savings Plan (as amended
1994) --Incorporated by reference to Exhibit 10(g) of the
Company's Annual Report on Form 10-K for the year ended
November 30, 1994 (File No. 0-15838).

10(f) -- New Jersey Steel Corporation Thrift Trust Savings Agreement
(as amended 1994)--Incorporated by reference to Exhibit 10(h)
of the Company's Annual Report on Form 10-K for the year ended
November 30, 1994 (File No. 0-15838).

10(g) -- Registration Agreement between the Company and Von Roll Ltd.
dated as of April 1, 1987--Incorporated by reference to
Exhibit 10(h) of the Company's Registration Statement on Form
S-1 (No. 33-13298).

10(h) -- Amended and Restated Loan and Security Agreement dated as of
June 6, 1996 between Midlantic Bank, National Association, and
the Company--Incorporated by reference to Exhibit 10(i) to the
Company's Quarterly Report on Form 10-Q for the quarter ended
May 31, 1996 (File No. 0-15838).

10(i) -- Credit Agreement dated as of June 6, 1996 between Von Roll
Holding AG and the Company--Incorporated by reference to
Exhibit 10(j) to the Company's Quarterly Report on Form 10-Q
for the quarter ended May 31, 1996 (File No. 0-15838).

10(j) -- 1996 Stock Option Plan--Incorporated by reference to Exhibit
A of the Company's Proxy Statement dated May 7, 1996 used in
connection with the meeting of stockholders held June 21, 1996
(File No. 0-15838).

10(k) -- Form of Stock Option Agreement used in connection with the
Company's 1996 Stock Option Plan--Incorporated by reference
to Exhibit 10(l) of the Company's Quarterly Report on Form
10-Q for the quarter ended May 31, 1996 (File No. 0-15838).

10(l) -- Employment Agreement dated as of May 1, 1996 between the
Company and Kenneth J. Leonard--Incorporated by reference to
Exhibit 10(m) of the Company's Quarterly Report on Form 10-Q
for the period ended May 31, 1996 (File No. 0-15838).

10(m) -- First Amendment of Revolving Loan and Security Agreement
dated February 27, 1997 between the Company and PNC Bank
-- Filed herewith.

10(n) -- Employment Agreement dated as of September 9, 1996 between
the Company and Louis F. Hagan--Filed herewith.

10(o) -- Form of Employment Agreement entered into among each of Gary A.
Giovannetti and Paul Roik and the Company effective upon a
"change in control"--Filed herewith.

10(p) -- Financial Statements of Excel Mining Systems, Inc.--To be
filed by amendment.

23 -- Consent of KPMG Peat Marwick LLP.

27 -- Financial Data Schedule.

SIGNATURES

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

February 28, 1997

NEW JERSEY STEEL CORPORATION

By: /s/ Gary A. Giovannetti
------------------------------
Gary A. Giovannetti, President

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:

Signature Title Date

/s/ Gary A. Giovannetti Director, President February 28, 1997
- ------------------------- and Chief Executive
Gary A. Giovannetti Officer (Principal
Executive Officer)

/s/ Paul Roik February 28, 1997
- ------------------------- (Principal Financial
Paul Roik and Accounting Officer)

/s/ H. Georg Hahnloser Director February 28, 1997
- -------------------------
H. Georg Hahnloser

Director February 28, 1997
- -------------------------
Hans G. Trosch

Director February 28, 1997
- -------------------------
Robert LeBuhn

/s/ Walter H. Beebe Director February 28, 1997
- -------------------------
Walter H. Beebe

EXHIBIT 10(m)

FIRST AMENDMENT TO REVOLVING LOAN AND SECURITY AGREEMENT

THIS FIRST AMENDMENT (this "Amendment") made this 27th day of February,
1997 to the Amended and Restated loan and Security Agreement dated June 6,
1996 between NEW JERSEY STEEL CORPORATION, a corporation organized under the
laws of the State of Delaware (hereinafter referred to as "Borrower"), having
its principal place of business at North Crossman Road, Sayreville, New Jersey
08872 and PNC Bank, National Association, successor by merger to Midlantic
Bank, N.A. (hereinafter referred to as "Lender", a banking association
organized and existing under the laws of the United States of America, having
offices at 2 Tower Center boulevard, East Brunswick, New Jersey 08816.

WITNESSETH:

WHEREAS, Lender and Borrower have previously entered into a commercial
lending relationship in accordance with the terms and conditions of an
Amended and Restated Loan and Security Agreement dated as of June 6, 1996
(the "Loan Agreement") pursuant to which Lender has advanced funds to the
Borrower on a secured basis and Borrower has agreed to repay same; and

WHEREAS, Lender and Borrower seek to amend some of the terms and conditions
of their amendments to the Loan Agreement by this writing.

NOW THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, the parties agree as follows:

1. Section 6., NEGATIVE COVENANTS, Subsections 6.18, Working Capital,
6.19 Tangible Net North, 6.20 Capital Expenditures, and 6.21 Cash
Coverage Ratio in the Loan Agreement are hereby amended and
changed to read as follows:

6.18 Working Capital. Cause or permit Working Capital to
increase by less than $2,000,000.00 over the prior actual
fiscal year-end Working Capital for the fiscal year ending
November 30, 1997, and for each fiscal year-end thereafter
Working Capital must be at least $2,000,000.00 greater than
the prior fiscal year-end's actual Working Capital. The
term Working Capital, meaning as of the time of any
determination thereof, the amount determined in accordance
with generally accepted accounting principles, applied
on a consistent basis, by which the current assets of
Borrower exceed its current liabilities, which calculation
shall, at all times include the principal amount outstanding
under the Von Roll Loan and the current installments due
under the Term Loan at the time of such calculation.

6.19 Tangible Net Worth. Cause or permit Tangible Net Worth to
be less than 105% of the prior fiscal year-end's Tangible
Net Worth for the fiscal year-end November 30, 1997, and
each fiscal year-end thereafter Tangible Net Worth cannot be
less than 105% of the actual Tangible Net Worth as at the
immediately preceeding fiscal year-end. The term Tangible
Net Worth meaning, as of the time of any determination
thereof, the difference between (a) the sum of (i) the par
value (or value stated on the books of Borrower) of the
capital stock of all classes of Borrower, plus (or minus in
the case of a deficit) (ii) the amount of Borrower's surplus
whether capital or earned, less (b) the sum of treasury
stock, unamortized debt discount and expense, good will,
trademarks, trade names, patents, deferred charges,
leasehold improvements and other intangible assets, and
any write-up of the value of any assets, all determined in
accordance with generally accepted accounting principles,
applied on a consistent basis.

6.20 Capital Expenditures. Enter into any agreement to purchase
or pay for, or become obligated to pay for, Capital
Expenditures including capitalized interest payments, long
term leases, capital leases or sale lease-backs, in an
amount, determined without duplication, aggregating in
excess of $7,500,000.00 for the fiscal year-ending November
30, 1997 and each fiscal year thereafter.

6.21 Cash Coverage Ratio. Cause or permit Borrower's Cash
Coverage Ratio to be less than (i) 6.5 as at August 31,
1997, and (ii) 7.0 as at November 30, 1997 and each fiscal
quarter-end thereafter. The term Cash Coverage Ratio means
the ratio of (i)(A) Borrower's net income plus depreciation
for the fiscal quarter, minus (B) capitalized interest and
unfinanced capital expenditures for such fiscal quarter, all
as determined in accordance with generally accepted
accounting principles, applied on a consistent basis.
Regular payments on the Revolving Loan and the Von Roll
Loan and mandatory prepayments from the permitted sale of
assets shall not, for purposes of this Section 6.21, be
deemed part of "Borrower's debt service requirment."

2. Inconsistency. This Amendment is deemed incorporated into the
Loan Agreement. To the extent that any terms or provision of this
Amendment is or may be deemed expressly inconsistent with any term
or provision in the Loan Agreement, the terms and provisions hereof
shall control.

3. Ratification of Agreement. The Borrower hereby represents and
warrants that (a) all of its representations and warranties in the
Loan Agreement are true and correct, (b) no default or Event of
Default exists under the Loan Agreement, and (c) this Amendment
has been duly authorized, executed and delivered and constitutes
its legal, valid and binding obligation, enforceable in accordance
with its terms.

4. Confirmation of Collateral. The Borrower hereby confirms that any
collateral for the Obligations, including but not limited to liens,
security interest, mortgages, and pledges granted by the Borrower
or third parties (if applicable), shall continue unimpaired and in
full force and effect.

5. Counterparts. This Amendment may be signed in any number of
counterpart copies and by the parties hereto on separate
counterparts, but all such copies shall constitute one and the same
instrument.

6. Successors and Assigns. This Amendment will be binding upon and
inure to the benefit of the Borrower and the Lender and the Bank
and their resepctive heirs, executors, administrators, successors
and assigns.

7. Amendment. Except as amended hereby, the terms and provisions of
the Loan Agreement remain unchanged and in full force and effect.
Except as expressly provided herein, this Amendment shall not
constitute an amendment, waiver, consent or release with respect
to any provision of the Loan Agreement, a waiver of any default or
Event of Default thereunder, or a waiver or release of any of
the Lender's rights and remedies (all of which are hereby
reserved). The Borrower expressly ratifies and confirms the waiver
of jury trial provision.

8. HEADINGS. The headings as used in this Amendment are inserted
solely for convenience of reference and shall not constitute a
part of this Amendment not affect its meaning, construction or
effect.

9. NO DEFENSES TO PAYMENT. Borrower waives and forever releases and
discharges Lender, it officers, directors, agents and employees,
successors and assigns from any and all claims, actions, causes of
action, suits, counterclaims, set-offs, rights and defenses
against Lender (its officers, directors, agents and employees,
successors and assigns), which Borrower its succcessors or assigns
have or hereafter can, shall or may have, for, upon, or by reason
of matter, cause or thing whatsoever up to and including the date
of this Amendment; and Borrower represents and warrants to Lender
that Borrower has no defenses to the repayment of any or all of
the Obligations and has no claims, rights or set-off or causes of
action against Lender.

IN WITNESS WHEREOF, the parties hereunto set their hands and seals or caused
these presents to be signed by thier proper corporate officers and their
proper corporate seals to be hereto affixed the 27th day of February, 1997.

(SEAL)
ATTEST NEW JERSEY STEEL CORPORATION

By: ________________________ By: ________________________________
Thomas W. Jackson Gary A. Giovannetti
Secretary President

By: _______________________________
Paul Roik
Vice President

PNC BANK, NATIONAL ASSOCIATION

By: _______________________________
Susan Graham
Vice President

EXHIBIT 10(n)

EMPLOYMENT AGREEMENT

AGREEMENT made as of this 9th day of September, 1996 by and
between NEW JERSEY STEEL CORPORATION (the "Company"), a Delaware corporation
with offices at North Crossman Road, Sayreville, New Jersey 08872, and LOUIS
F. HAGAN ("Executive"), an individual residing at 1109 Williamsburg Drive,
Naperville, IL 60540.

W I T N E S S E T H:

In consideration of the mutual covenants and agreements herein contained,
the parties hereby agree as follows:

1. Employment. The Company agrees to employ, and does hereby employ,
Executive, and Executive hereby accepts such employment, for the
term, with the duties and compensation and upon the terms and
conditions contained in this Agreement.

2. Term. The term of Executive's employment hereunder (the "Term")
shall be two (2) years beginning on the date of this Agreement and
ending two years thereafter, i.e., September 9, 1998, unless
earlier terminated as hereinafter provided.

3. Duties and Offices.

(a) Executive shall have the duties of a Vice President as
provided in the By-Laws of the Company and the title of
Vice President of Operation. Executive will perform his
services subject only to the direction and control of the
Company's President and Board of Directors and will report
only to the President and Board of Directors. Executive
shall not be required to perform any duties other than those
consistent with his status as Vice President of Operations.

(b) During the Term, Executive shall devote his full working
time and energies to the business and affairs of the Company.
Executive agrees during the Term to use his best efforts,
skill and abilities to promote the Company's interests; to
serve as a director and officer of any corporation which is
a subsidiary of the Company if elected by the stockholders
or Board of Directors of such subsidiary corporation; and,
subject to the provisions of paragraph (a) of this Section
3, to perform such duties as may be assigned to him by the
President or the Board of Directors of the Company.

(c) Unless Executive otherwise agrees in writing, the
headquarters for the performance of his services shall be
the principal executive offices of the Company in Sayreville,
New Jersey subject to such reasonable travel as the
performance of his duties in the business of the Company may
require.

4. Compensation.
(a) For his services during the Term, and except as otherwise
provided in this Agreement, the Company shall pay Executive
an annual salary (the "Salary").

(b) The initial Salary shall be at the rate of One Hundred and
Seventy Thousand ($170,000) Dollars per annum. The Board
of Directors in its sole discretion may increase such Salary.
In no event shall the Salary be reduced. The Salary shall
be payable in equal installments not less frequently than
monthly.

(c) To the extent that bonuses are paid to executives of the
Company generally, Executive shall also receive a bonus (the
"Bonus") with respect to each Year or portion thereof during
the term of this Agreement.

(d) The Bonus with respect to each fiscal year of the Company
shall be that portion of the incentive compensation bonus
pool of the Company assigned to Executive for such year by
the President of the Company, in such President's sole and
absolute discretion. The Bonus, if any, for a Year during
which the Term ends or for the initial Year shall reflect an
adjustment to reflect the ratio that the number of months
of the Term included in such Year bears to 12.

(e) As used herein the term "Year" means the fiscal year of the
Company.

5. Expenses, Benefits and Perquisites.

(a) The Company will pay or reimburse Executive for all travel
and other expenses reasonably incurred by Executive during
the Term in connection with the performance of his duties
hereunder.

(b) During the Term, Executive shall receive the benefits from
all retirement, group insurance, life insurance, medical and
similar programs, executive thrift, and stock option and
other benefit plans which are currently available to
executives of the Company generally.

(c) Executive shall be entitled to the use of a Company
automobile during the Term of this Agreement. The type and
cost of such automobile shall be subject to the approval of
the President but shall be generally consistent with a
$30,000 luxury automobile.

(d) The Company shall pay the reasonable expenses actually
incurred by Executive in relocating his family to the
northern New Jersey area.

6. Death of Executive. In the event Executive should die during
the Term, this Agreement and all benefits hereunder shall
terminate, except that the Company shall pay Executive's estate
the following: (a) Executive's Salary until the earlier of the
last day of the sixth month next following the month in which
Executive's death occurs or the Second Anniversary and (b) an
amount equal to a fraction of the Bonus which would have been
paid Executive for the Year in which death occurs had Executive
not died, the numerator of which fraction is the number of months
from December 1 of the Year in question to the end of the month
in which Executive died and the denominator of which is 12.
Such termination shall not affect any rights which Executive may
have at the time of his death pursuant to any insurance or other
death benefit, bonus retirement or stock award plans or
arrangements of the Company or any subsidiary, or any stock
option plan or any options granted thereunder, which rights shall
continue to be governed by the provisions of such plans and
arrangements.

7. Discharge for Cause. The President or the Board of Directors of
the Company may discharge Executive for cause at any time. Such
discharge shall be effected by written notice (the "Discharge
Notice") to Executive which shall specify the reasons for
Executive's discharge and the effective date thereof. As used
herein, the term "for cause" shall mean only criminal dishonesty,
chronic alcoholism, drug addiction or willful violation of
specific written directions from the President or the Board of
Directors of the Company, which directions are lawful and are
consistent with the provisions of this Agreement. Upon
termination pursuant to this Section 8, this Agreement and all
benefits hereunder shall terminate, except that such termination
shall not affect any rights which Executive may have at the time
of termination pursuant to any insurance or other death benefit,
bonus, retirement or stock award plans or arrangements of the
Company or any subsidiary, or any stock option plan or any
options granted thereunder, which rights shall continue to be
governed by the provisions of such plans and arrangements.

8. Disability. If Executive is unable to substantially perform his
services by reason of illness or incapacity for a period of more
than three (3) consecutive months, the Salary and Bonus thereafter
payable to him during the continued period of such illness or
incapacity shall be reduced by the amount of any disability
benefits payable to Executive under any disability program
provided by the Company. Executive's full Salary and Bonus
shall be reinstated upon his return to full employment and
discharge of his duties. Notwithstanding anything to the
contrary, the Company may terminate this Agreement at any time
after the Executive is absent or unable to substantially perform
his duties by reason of such illness or incapacity for six (6)
months in any twelve (12) month period. Upon termination
pursuant to this Section 8, this Agreement and all benefits
hereunder shall terminate, except that such termination shall
not affect any rights which Executive may have at the time of
termination pursuant to any insurance or other death benefit,
bonus, retirement or stock award plans or arrangements of the
Company or any subsidiary, or any stock option plan or any
options granted thereunder, which rights shall continue to be
governed by the provisions of such plans and arrangements.

9. Discharge Without Cause.

(a) The Company retains the right to discharge Executive without
cause at any time during the Term by written notice of
termination given to Executive.

(b) If the Company discharges Executive without cause, the
Company shall pay, as severance compensation and liquidated
damages, the Salary which Executive would have received,
and the benefits which he would have been entitled to
receive under Section 5(b) hereof, had Executive not been
so discharged, and the following provisions shall apply:

(i) Payment shall be made at the times and in the manner
such Salary would have been paid to Executive had he
not been discharged hereunder; and

(ii) In determining the other benefits which Executive would
have received under Section 5(b) during the Term had
such discharge not occurred, it shall be conclusively
presumed that Executive would have received benefits
(excluding stock awards) equal to those which he
received with respect to the last Year prior to the
Year in which the discharge occurs.

10. Indemnification and Legal Fees. The Company shall indemnify
Executive to the fullest extent permitted by law and the
Certificate of Incorporation and By-Laws of the Company from and
against any loss, claim, liability and/or expense incurred for,
or by reason of, or arising out of, acts of Executive as an
officer and/or director of the Company or any subsidiary.

11. Noncompetition and Confidentiality Agreement.

(a) During the Term, Executive will not, without the prior
written consent of the Company, directly or indirectly own,
manage, operate, control or participate in the ownership,
management, operation or control of, or be connected as a
stockholder, partner, joint venturer or otherwise with, or
accept employment of any kind with, any business which, or
any business or organization any part of which, competes
with the businesses of the Company or any of its
subsidiaries as such businesses are now conducted, in any
geographical area in which such businesses are conducted.
However, nothing herein contained shall prevent Executive
from investing solely as a passive investor in any
securities of a corporation, partnership, trust, or other
entity. For the purposes of this Agreement, Executive
shall be deemed to be a "passive investor" if he does not
control, or does not become part of any control group of,
the issuer of securities acquired by Executive.

(b) Executive acknowledges that during his employment with the
Company or any of its subsidiaries, he may have had, or may
have, access to secret and confidential information with
respect to some or all of the following: (i) product and
business plans, budgets, sales forecasts, design plans,
research and engineering data, inventions, methods,
systems and processes, (ii) customers and (iii) trade
secrets (all such information is hereinafter referred to
as "Confidential Information"). Executive agrees that
(except as authorized in writing by the Company or required
pursuant to legal or administrative process) he will not
reveal, divulge or make known to any person, firm or
corporation any Confidential Information. Executive
further agrees that if after the cessation of his
employment by the Company, he discovers any Confidential
Information in his possession, he shall forthwith deliver
the same to the Company. The provisions of this Section
11(b) shall survive the end of the Term of this Agreement.

12. Fiscal Year. If the Company shall change its fiscal year,
appropriate adjustments shall be made in the provisions of this
Agreement to reflect such change.

13. Arbitration. Any controversy or claim arising out of or
relating to this Agreement, or the breach thereof, shall be
settled by arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, and
judgment upon the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof.

14. Miscellaneous.

(a) This Agreement contains the entire understanding between
the parties hereto with respect to the subject matter hereof.
This Agreement may only be amended by an instrument in
writing executed by the party to be bound.

(b) This Agreement and the rights and obligations of the parties
hereto shall bind and inure to the benefit of the successor
or successors of the Company, whether by merger,
consolidation or otherwise.

(c) Any notice to be given pursuant to the terms of this
Agreement shall be in writing and delivered by hand or sent
by registered or certified mail, if to the Company, to the
President of the Company, New Jersey Steel Corporation, P.O.
Box 96, North Crossman Road, New Jersey 08872, and if to
Executive, to his address set forth above or to such other
address or to the attention of such other person as either
party has specified by prior written notice to the other
party.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.

NEW JERSEY STEEL CORPORATION

By:
- - - - - - - - - - - - - - - - -
President and CEO

- - - - - - - - - - - - - - - - -
Louis F. Hagan

Exhibit 10(o)

EMPLOYMENT AGREEMENT

Agreement by and between New Jersey Steel Corporation (the "Company") and
(the "Executive"), dated as of the day of August, 1996.

Whereas, the Board of Directors of the Company (the "Board"), has determined
that it is in the best interests of the Company and its shareholders to
assure that the Company will have the continued dedication of Executive,
notwithstanding the possibility, threat or occurrence of a Change of Control
(as defined below) of the Company, and;

Whereas, The Board believes it is imperative to diminish the inevitable
distraction of Executive by virtue of the personal uncertainties and risks
created by a pending or threatened Change of Control and to encourage
Executive's full attention and dedication to the Company currently and in
the event of any threatened or pending Change of Control, and to provide
Executive with compensation and benefits arrangements upon a Change of
Control which ensure that the compensation and benefits expectations of
Executive will be satisfied and which are competitive with those of other
corporations, and;

Whereas, in order to accomplish these objectives, the Board has authorized
the Company to enter into this Agreement.

Now, Therefore, It Is Hereby Agreed:

1. Certain Definitions.

(a) The "Effective Date" shall mean the first day during the Change
of Control Period (as defined in Section 1(b)) on which a Change
of Control (as defined in Section 2) occurs.

(b) The "Change of Control Period" shall mean the period commencing
on the date hereof and ending on the second anniversary of the
date hereof; provided, however, that commencing on the date one
month after the date hereof, and on each monthly anniversary of
such date (such date and each monthly anniversary thereof shall
be hereinafter referred to as the "Renewal Date"), unless
previously terminated, the Change of Control Period shall be
automatically extended so as to terminate two years from such
Renewal Date, unless at least 30 days prior to the Renewal Date
the Company shall give notice to Executive that the Change of
Control Period shall not be so extended.

(c) Anything in this Agreement to the contrary notwithstanding, if a
Change of Control occurs and if Executive's employment with the
Company is terminated prior to the date on which the Change of
Control occurs, and if it is reasonably demonstrated by Executive
that such termination of employment (i) was at the request of a
third party who has taken steps reasonably calculated to effect
a Change of Control or (ii) otherwise arose in connection with or
anticipation of a Change of Control, then for all purposes of
this Agreement the "Effective Date" shall mean the date
immediately prior to the date of such termination of employment.

2. Change of Control. For the purpose of this Agreement, a "Change of
Control" shall mean:

(a) A sale or merger transaction with a third party following which
Von Roll Holding AG no longer controls, directly or indirectly,
fifty (50%) percent or more of the voting stock of the Company,
or, if the transaction involves the sale of all or substantially
all of the Company's assets, Von Roll Holding AG does not control
at least fifty (50%) percent of the voting stock of the purchasing
entity. A "third party" as used in the preceding sentence means
an entity in which Executive has no direct or indirect interest;
or

(b) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.

3. Employment Period. The Company hereby agrees to continue Executive
in its employ, and Executive hereby agrees to remain in the employ of
the Company subject to the terms and conditions of this Agreement,
for the period commencing on the Effective Date and ending on the
second anniversary of such date (the "Employment Period").

4. Terms of Employment.

(a) Position and Duties.

(i) During the Employment Period, (A) Executive's position,
authority, duties and responsibilities shall be at least
commensurate in all material respects with the most
significant of those held, exercised and assigned at any
time during the 120-day period immediately preceding the
Effective Date and (B) Executive's services shall be
performed within 25 miles of the location where Executive
was employed immediately preceding the Effective Date.

(ii) During the Employment Period, Executive agrees to devote
his entire business attention and time to the business
and affairs of the Company and, to the extent necessary to
discharge the responsibilities assigned to Executive
hereunder, to use Executive's reasonable best efforts to
perform faithfully and efficiently such responsibilities.

(b) Compensation.

(i) Base Salary. During the Employment Period, Executive
shall receive an annual base salary ("Annual Base Salary"),
which shall be paid at a monthly rate, at least equal to
twelve times the highest monthly base salary paid or
payable, including any base salary which has been earned
but deferred, to Executive by the Company in respect of
the twelve-month period immediately preceding the month
in which the Effective Date occurs. During the Employment
Period, the Annual Base Salary may be increased, but any
such increase shall not serve to limit or reduce any
other obligation to Executive under this Agreement. Annual
Base Salary shall not be reduced after any such increase
and the term Annual Base Salary as utilized in this
Agreement shall refer to Annual Base Salary as so
increased.

(ii) Annual Bonus. In addition to Annual Base Salary, Executive
shall be awarded, for each fiscal year ending during the
Employment Period, an annual bonus (the "Annual Bonus") in
cash at least equal to the product of the Annual Base
Salary and the percentage of base salary actually awarded
to Executive under the Company's incentive compensation
plan or plans, if any, for the last full fiscal year prior
to the Effective Date (the "Recent Annual Bonus
Percentage"). Each such Annual Bonus shall be paid no
later than the end of the third month of the fiscal year
next following the fiscal year for which the Annual Bonus
is awarded.

(iii) Incentive, Savings and Retirement Plans. During the
Employment Period, Executive shall be entitled to
participate in all retirement, group insurance, life
insurance, medical and similar programs, executive thrift,
and stock option and other benefit plans which are
generally available to other executives of the Company
("Benefit Plans") but in no event shall such Benefit Plans
be, in each case, less favorable, in the aggregate, than
the most favorable of those provided by the Company for
Executive at any time during the 120-day period immediately
preceding the Effective Date.

(iv) Expenses. During the Employment Period, Executive shall be
entitled to receive prompt reimbursement for all reasonable
expenses incurred by Executive in accordance with the most
favorable policies, practices and procedures of the Company
in effect for Executive at any time during the 120-day
period immediately preceding the Effective Date.

(v) Vacation. During the Employment Period, Executive shall be
entitled to paid vacation in accordance with the most
favorable vacation policy in effect for Executive at any
time during the 120-day period immediately preceding the
Effective Date.

5. Termination of Employment.

(a) Death or Disability. Executive's employment shall terminate
automatically upon Executive's death during the Employment Period.
The Company may terminate this Agreement at any time after the
Executive is absent or unable to substantially perform his duties
by reason of illness or incapacity for six (6) months in any
twelve (12) month period. Upon termination pursuant to this
Section 5, this Agreement and all benefits hereunder shall
terminate, except that such termination shall not affect any
rights which Executive may have at the time of termination
pursuant to any insurance or other death benefit, bonus,
retirement or stock award plans or arrangements of the Company,
or any stock option plan or any options granted thereunder, which
rights shall continue to be governed by the provisions of such
plans and arrangements.

(b) Cause. The Company may terminate Executive's employment during
the Employment Period for Cause. For purposes of this Agreement
"Cause" shall mean:

(i) the willful and continued failure of Executive to perform
substantially Executive's duties with the Company (other
than any such failure resulting from incapacity due to
physical or mental illness), after a written demand for
substantial performance is delivered to Executive by the
Board or the Chief Executive Officer of the Company which
specifically identifies the manner in which the Board or
Chief Executive Officer believes that Executive has not
substantially performed Executive's duties, or

(ii) the willful engaging by Executive in illegal conduct or
gross misconduct which is materially and demonstrably
injurious to the Company, or

(iii) chronic alcoholism or drug addiction, or

(iv) a willful violation of the Company's "Code of Business and
Ethical Standards" as promulgated by the Board.

For purposes of this provision, no act or failure to act, on the part of
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by Executive in bad faith or without reasonable belief that Executive's
action or omission was in the best interests of the Company. Any act, or
failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or upon the instructions of the Chief Executive Officer
or a senior officer of the Company or based upon the advice of counsel for
the Company shall be conclusively presumed to be done, or omitted to be done,
by Executive in good faith and in the best interests of the Company.

(c) Good Reason. Executive's employment may be terminated by
Executive for Good Reason. For purposes of this Agreement,
"Good Reason" shall mean:

(i) any failure by the Company to comply with any of the
provisions of Section 4 of this Agreement, other than an
isolated, insubstantial and inadvertent failure not
occurring in bad faith and which is remedied by the Company
promptly after receipt of notice thereof given by Executive;

(ii) any purported termination by the Company of Executive's
employment otherwise than as expressly permitted by this
Agreement; or

(iii) any failure by the Company to comply with and satisfy
Section 11(c) of this Agreement.

For purposes of this Section 5(c), any determination of "Good Reason" made
by Executive in good faith shall be conclusive. Anything in this Agreement
to the contrary notwithstanding, a termination by Executive for any reason
during the 30-day period immediately following the 180th day after the
Effective Date shall be deemed to be a termination for Good Reason for all
purposes of this Agreement).

(d) Notice of Termination. Any termination by the Company for Cause,
or by Executive for Good Reason, shall be communicated by Notice
of Termination to the other party hereto given in accordance with
Section 12(b) of this Agreement. For purposes of this Agreement,
a "Notice of Termination" means a written notice which sets forth
in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment under
this Agreement, the provision so indicated and the termination
date (which date shall be not more than thirty days after the
giving of such notice). The failure to set forth in the Notice
of Termination any fact or circumstance which contributes to a
showing of Good Reason or Cause shall not waive any right of
Executive of the Company, respectively, hereunder.

(e) Date of Termination. "Date of Termination" means the date
specified in a Notice of Termination, of if no such date is
specified, the date such Notice of Termination is given or (iii)
if Executive's employment is terminated by reason of death or
Disability, the date of death of Executive or the Disability
Effective Date, as the case may be.

6. Obligations of the Company upon Termination.

(a) Good Reason; Other Than for Cause, Death or Disability. If,
during the Employment Period, the Company shall terminate
Executive's employment other than for Cause or Death or
Disability or Executive shall terminate employment for Good
Reason:

(i) the Company shall pay to Executive in a lump sum in cash
within 30 days after the Date of Termination the aggregate
of the following amounts:

A. the sum of (1) Executive's Annual Base Salary through
the Date of Termination to the extent not theretofore
paid, (2) the product of (x) the Recent Annual Bonus
Percentage and (y) Executive's Annual Base Salary and
(z) a fraction, the numerator of which is the number
of days in the current fiscal year through the Date of
Termination, and the denominator of which is 365 and
(3) any compensation previously deferred by Executive
(together with any accrued interest or earnings thereon)
and any accrued vacation pay (with respect to the year
in which such termination occurs and the three years
prior thereto), in each case to the extent not
theretofore paid (the sum of the amounts described in
clauses (1), (2), and (3) shall be hereinafter referred
to as the "Accrued Obligations");

B. the amount equal to the product of (1) Two and (2) the
sum of (x) Executive's Annual Base Salary (y) an amount
equal to the matching contribution made to the Company's
401k plan for the most recent full fiscal year and (z)
the product of (i) the Recent Annual Bonus Percentage
and (ii) the Annual Base Salary.

(ii) for Two years after Executive's Date of Termination, or
such longer period as may be provided by the terms of the
appropriate plan, program, practice or policy, the Company
shall continue benefits to Executive and/or Executive's
family at least equal to those which would have been
provided to them in accordance with the plans, programs,
practices and policies described in Section 4(b)(iii) of
this Agreement if Executive's employment had not been
terminated; provided, however, that if Executive becomes
reemployed with another employer and is eligible to receive
medical or other welfare benefits under another employer
provided plan, the medical and other welfare benefits
described herein shall be secondary to those provided
under such other plan during such applicable period of
eligibility. For purposes of determining eligibility (but
not the time of commencement of benefits) of Executive for
retiree benefits pursuant to such plans, practices, programs
and policies, Executive shall be considered to have remained
employed until two years after the Date of Termination and
to have retired on the last day of such period;

(iii)the Company shall, at its sole expense as incurred, provide
Executive with outplacement services.

(iv) to the extent not theretofore paid or provided, the Company
shall timely pay or provide to Executive any other amounts
or benefits required to be paid or provided or which
Executive is eligible to receive under any plan, program,
policy or practice or contract or agreement of the Company
(such other amounts and benefits shall be hereinafter
referred to as the "Other Benefits").

(v) if any stock awards made prior to the Date of Termination,
both vested or unvested, shall lapse by reason of such
termination other than for Cause or Death or Disability,
Executive shall be entitled to recover from the Company as
additional severance compensation amounts equal to the
value of any such options at the time of such lapse.

(b) Death. If Executive's employment is terminated by reason of
Executive's death during the Employment Period, this Agreement
shall terminate without further obligations to Executive's legal
representatives under this Agreement, other than for payment of
Accrued Obligations and the timely payment or provision of Other
Benefits. Accrued Obligations shall be paid to Executive's
estate or beneficiary, as applicable, in a lump sum in cash
within 30 days of the Date of Termination.

(c) Disability. If Executive's employment is terminated by reason
of Executive's Disability during the Employment Period, this
Agreement shall terminate without further obligations to
Executive, other than for payment of Accrued Obligations and
the timely payment or provision of Other Benefits. Accrued
Obligations shall be paid to Executive in a lump sum in cash
within 30 days of the Date of Termination. With respect to the
provision of Other Benefits, the term Other Benefits as utilized
in this Section 6(c) shall include, and Executive shall be
entitled after the Disability Effective Date to receive,
disability and other benefits at least equal to the most
favorable of those generally provided by the Company to disabled
executives and/or their families generally, if any, as in effect
at any time during the 120-day period immediately preceding the
Effective Date.

(d) Cause; Other than for Good Reason. If Executive's employment
shall be terminated for Cause during the Employment Period, this
Agreement shall terminate without further obligations to
Executive other than the obligation to pay to Executive (x) his
Annual Base Salary through the Date of Termination, (y) the amount
of any compensation previously deferred by Executive, and (z)
Other Benefits, in each case to the extent theretofore unpaid.
If Executive voluntarily terminates employment during the
Employment Period, excluding a termination for Good Reason,
this Agreement shall terminate without further obligations to
Executive, other than for Accrued Obligations and the timely
payment or provision of Other Benefits. In such case, all
Accrued Obligations shall be paid to Executive in a lump sum
in cash within 30 days of the Date of Termination.

7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent
or limit Executive's continuing or future participation in any plan,
program, policy or practice provided by the Company for which
Executive may qualify, nor, subject to Section 12(f), shall anything
herein limit or otherwise affect such rights as Executive may have
under any contract or agreement with the Company.

8. Full Settlement. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off,
counterclaims, recoupment, defense or other claim, right or action
which the Company may have against Executive or others. In no event
shall Executive be obligated to seek other employment or take any
other action by way of mitigation of the amounts payable to Executive
under any of the provisions of this Agreement and such amounts shall
not be reduced whether or not Executive obtains other employment. The
Company agrees to pay as incurred, to the full extent permitted by law,
all legal fees and expenses which Executive may reasonably incur as a
result of any contest (regardless of the outcome thereof) by the
Company, Executive or others of the validity or enforceability of, or
liability under, any provision of this Agreement or any guarantee of
performance thereof (including as a result of any contest by Executive
about the amount of any payment pursuant to this Agreement), plus in
each case interest on any delayed payment at the applicable Federal
rate provided for in Section 7872(f)(2)(A) of the Internal Revenue
Code of 1986, as amended (the "Code").

9. Certain Additional Payments by the Company.

(a) Anything in this Agreement to the contrary notwithstanding and
except as set forth below, in the event it shall be determined
that any payment or distribution by the Company to or for the
benefit of Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional
payments required under this Section 9) (a "Payment") would be
subject to the excise tax imposed by Section 4999 of the Code or
any interest or penalties are incurred by Executive with respect
to such excise tax (such excise tax, together with any such
interest and penalties, are hereinafter collectively referred to
as the "Excise Tax"), then Executive shall be entitled to receive
an additional payment (a "Gross-Up Payment") in an amount such
that after payment by Executive of all taxes (including any
interest or penalties imposed with respect to such taxes),
including without limitation, any income taxes (and any interest
and penalties imposed with respect thereto) and Excise Tax
imposed upon the Gross-Up Payment, Executive retains an amount of
the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments.

(b) Subject to the provisions of Section 9(c), all determinations
required to be made under this Section 9, including whether and
when a Gross-Up Payment is required and the amount of such Gross-
Up Payment and the assumptions to be utilized in arriving at such
determination, shall be made by KPMG Peat Marwick LLP or such
other certified public accounting firm as may be preparing the
Company's tax returns (the "Accounting Firm") which shall provide
detailed supporting calculations both to the Company and
Executive within 15 business days of the receipt of notice from
Executive that there has been a Payment, or such earlier time as
is requested by the Company. In the event that the Accounting
Firm is serving as accountant or auditor for the individual,
entity or group effecting and Change of Control as a result of
which a Payment would be subject to the Excise Tax, Executive
shall appoint another nationally recognized accounting firm to
make the determinations required hereunder (which accounting firm
shall then be referred to as the Accounting Firm hereunder).
All fees and expenses of the Accounting Firm shall be borne
solely by the Company. Any Gross-Up Payment, as determined
pursuant to this Section 9, shall be paid by the Company to the
Executive within five days of the receipt of the Accounting
Firm's determination. Any determination by the Accounting Firm
shall be binding upon the Company and Executive. As a result of
the uncertainty in the application of Section 4999 of the Code
at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments which will not
have been made by the Company should have been made
("Underpayment"), consistent with the calculations
required to be made hereunder. In the event that the Company
exhausts its remedies pursuant to Section 9(c) and Executive
thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly
paid by the Company to or for the benefit of Executive.

(c) Executive shall notify the Company in writing of any claim by
the Internal Revenue Service that, if successful, would require
the payment by the Company of the Gross-Up Payment. Such
notification shall be given as soon as practicable but no later
than ten business days after Executive is informed in writing of
such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid.
Executive shall not pay such claim prior to the expiration of
the 30-day period following the date on which it gives such
notice to the Company (or such shorter period ending on the date
that any payment of taxes with respect to such claim is due).
If the Company notifies Executive in writing prior to the
expiration of such period that it desires to contest such claim,
Executive shall:

(i) give the Company any information reasonably requested by
the Company relating to such claim,

(ii) take such action in connection with contesting such claim
as the Company shall reasonably request in writing from time
to time, including, without limitation accepting legal
representation with respect to such claim by an attorney
reasonably selected by the Company,

(iii)cooperate with the Company in good faith in order effectively
to contest such claim, and

(iv) permit the Company to participate in any proceedings
relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation
and payment of costs and expenses. Without limitation of the foregoing
provisions of this Section 9(c), the Company shall control all proceedings
taken in connection with such contest and, at its sole option, may pursue or
forgo any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at
its sole option, either direct Executive to pay the tax claimed and sue for
a refund or contest the claim in any permissible manner, and Executive agrees
to prosecute such contest to a determination before any administrative
tribunal, in a court of initial jurisdiction and in one or more appellate
courts, as the Company shall determine; provided, however, that if the
Company directs Executive to pay such claim and sue for a refund, the Company
shall advance the amount of such payment to Executive, on an interest-free
basis and shall indemnify and hold Executive harmless on an after-tax basis,
from any Excise Tax or income tax (including interest or penalties with
respect thereto) imposed with respect to such advance or with respect to any
imputed income with respect to such advance; and further provided that any
extension of the statute of limitations relating to payment
of taxes for the taxable year of Executive with respect to which such
contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company's control of the contest shall be limited
to issues with respect to which a Gross-Up Payment would be payable hereunder
and Executive shall be entitled to settle or contest, as the case may be,
any other issue raised by the Internal Revenue Service or any other taxing
authority.

(d) If, after the receipt by Executive of an amount advanced by the
Company pursuant to Section 9(c), Executive becomes entitled to
receive any refund with respect to such claim, Executive shall
(subject to the Company's complying with the requirements of
Section 9(c)) promptly pay to the Company the amount of such
refund (together with any interest paid or credited thereon after
taxes applicable thereto). If, after the receipt by Executive
of an amount advanced by the Company pursuant to Section 9(c), a
determination is made that Executive shall not be entitled to
any refund with respect to such claim and the Company does not
notify Executive in writing of its intent to contest such denial
of refund prior to the expiration of 30 days after such
determination, then such advance shall be forgiven and shall not
be required to be repaid and the amount of such advance shall
offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.

10.Confidential Information; Restriction on Solicitation of Employees
and Clients.

(a) Executive shall hold in a fiduciary capacity for the benefit of
the Company all secret or confidential information, knowledge or
data relating to the Company and its respective business and
Clients (as defined below), which shall have been obtained by
Executive during Executive's employment by the Company and which
shall not be or become public knowledge (other than by acts by
Executive or representatives of Executive in violation of this
Agreement). After termination of Executive's employment with
the Company, Executive shall not, without the prior written
consent of the Company or as may otherwise be required by law or
legal process, communicate or divulge any such information,
knowledge or data to anyone other than the Company and those
designated by it. For the purposes of this Section 10, the term
"Client" means any person or entity that is a customer or client
of the Company or any of its subsidiaries.

(b) During the term of employment of Executive and during the
Nonsolicitation Period (as defined below), Executive shall not,
without the prior written consent of the Company, solicit,
directly or indirectly (other than through a general solicitation
of employment not specifically directed to employees of the
Company or its subsidiaries), the employment of any person who
within the previous 12 months was an officer of the Company or
held a supervisory position with the Company. For purposes of
this Section 10, the term "Nonsolicitation Period" means the
period beginning on the date of termination of Executive's
employment with the Company (the "Termination Date") and ending
on the earlier of (1) twelve months after the Termination Date
and (2) one year after the Effective Date (if any).

(c) During the term of employment of Executive and during the
Nonsolicitation Period, Executive shall not, without the prior
consent of the Company, engage in the Solicitation of Business
(as defined below) from any Client on behalf of any person or
entity other than the Company. For the purposes of this Section
10(c), the term "Solicitation of Business" shall mean the attempt
through direct personal contact on the part of Executive with a
Client with whom Executive has had significant personal contact
while serving in a Line-Function Capacity (as defined below)
during his period of employment to induce such Client to transfer
its business relationship from the Company and its subsidiaries
to any other person or entity. The term "Line-Function Capacity"
means service to the Company in a primary capacity other than a
staff function, in which Executive has direct and regular contact
with Clients and responsibility for managing the business
relationship of the Company with such Clients. During the
Nonsolicitation Period, Executive may accept employment with or
enter into a business relationship with a person or entity that
has or seeks to establish business relationships with one or more
Clients provided that Executive does not engage in the
solicitation of Business from such Clients and does not disclose
confidential information concerning such client and its
relationship with the Company to any such person or entity.

(d) In no event shall an asserted violation of the provisions of
this Section 10 constitute a basis for deferring or withholding
any amounts otherwise payable to Executive under this Agreement.

(e) This Section 10 shall be effective from and after the date of
this Agreement notwithstanding that an Effective Date has not
occurred.

11.Successors.

(a) This Agreement is personal to Executive and without the prior
written consent of the Company shall not be assignable by
Executive otherwise than by will or the laws of the descent and
distribution. This Agreement shall inure to the benefit of and
be enforceable by Executive's legal representatives.

(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.

(c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the
Company to assume expressly and agree to perform this Agreement
in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place.
As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or
assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law, or otherwise.

12.Miscellaneous.

(a) This Agreement shall be governed by and construed in accordance
with the laws of the State of New Jersey without reference to
principles of conflict of laws. The captions of this Agreement
are not part of the provisions hereof and shall have no force or
effect. This Agreement may not be amended or modified otherwise
than by a written agreement executed by the parties hereto or
their respective successors and legal representatives.

(b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party
or by registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:

If to Executive:

If to the Company:

New Jersey Steel Corporation
North Crossman Road
Sayreville, NJ 08872
Attn: President

or to such other address as either party shall have furnished
to the other in writing in accordance herewith. Notice and
communications shall be effective when actually received by the
addressee.

(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any
other provision of this Agreement.

(d) The Company may withhold from any amounts payable under this
Agreement such Federal, state, local or foreign taxes as shall be
required to be withheld pursuant to any applicable law or
regulation.

(e) Executive's or the Company's failure to insist upon strict
compliance with any provision of this Agreement or the failure to
assert any right Executive or the Company may have hereunder,
including, without limitation, the right of Executive to
terminate employment for Good Reason pursuant to Section 5(c)(i)
- (v) of this Agreement, shall not be deemed to be a waiver of
such provision or right or any other provision or right of this
Agreement.

(f) Executive and the Company acknowledge that, except as may
otherwise be provided under any other written agreement between
Executive and the Company, the employment of Executive by the
Company is "at will" and, subject to Section 1(a) hereof, prior
to the Effective Date, Executive's employment and/or this
Agreement may be terminated by either Executive or the Company at
any time prior to the Effective Date, in which case Executive
shall have no further rights under this Agreement. From and after
the Effective Date this Agreement shall supersede any other
agreement between the parties with respect to the subject matter
hereof.

In Witness Whereof, Executive has hereunto set Executive's hand and, pursuant
to the authorization from its Board of Directors, the Company has caused
these presents to be executed in its name on its behalf, all as of the day
and year first above written.

NEW JERSEY STEEL CORPORATION
By:

Exhibit 23

INDEPENDENT AUDITORS' CONSENT

The Board of Directors
New Jersey Steel Corporation

We consent to incorporation by reference in the Registration Statements (No.
33-17435 and 33-52194) on Forms S-8 of New Jersey Steel Corporation of our
report dated January 10, 1997, except as to note 8, which is as of February
27, 1997, relating to the consolidated balance sheets of New Jersey Steel
Corporation and subsidiary as of November 30, 1996 and 1995 and the related
consolidated statements of operations, stockholders' equity, and cash flows
and related schedule for each of the years in the three-year period ended
November 30, 1996, which report appears in the November 30, 1996 annual
report on Form 10-K of New Jersey Steel Corporation.

KPMG Peat Marwick LLP

Short Hills, New Jersey
February 28, 1997

<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from the
registrant's consolidated financial statements for the year ended November
30, 1996 and is qualified in it's entirety by reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> NOV-30-1996
<PERIOD-END> NOV-30-1996
<CASH> 13
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<RECEIVABLES> 26580
<ALLOWANCES> (2307)
<INVENTORY> 15990
<CURRENT-ASSETS> 40958
<PP&E> 185563
<DEPRECIATION> (93956)
<TOTAL-ASSETS> 151370
<CURRENT-LIABILITIES> 39707
<BONDS> 36264
0
0
<COMMON> 59
<OTHER-SE> 75340
<TOTAL-LIABILITY-AND-EQUITY> 151370
<SALES> 145209
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