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<SEC-DOCUMENT>/in/edgar/work/20000807/0000950152-00-005686/0000950152-00-005686.txt : 20000921
<SEC-HEADER>0000950152-00-005686.hdr.sgml : 20000921
ACCESSION NUMBER:		0000950152-00-005686
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20000630
FILED AS OF DATE:		20000807

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			OLYMPIC STEEL INC
		CENTRAL INDEX KEY:			0000917470
		STANDARD INDUSTRIAL CLASSIFICATION:	 [5051
]		IRS NUMBER:				341245650
		STATE OF INCORPORATION:			OH
		FISCAL YEAR END:			1231
</COMPANY-DATA>

		FILING VALUES:
			FORM TYPE:		10-Q
			SEC ACT:		
			SEC FILE NUMBER:	000-23320
			FILM NUMBER:		687226
</FILING-VALUES>

			BUSINESS ADDRESS:	
				STREET 1:		5080 RICHMOND RD
				CITY:			BEDFORD HEIGHTS
				STATE:			OH
				ZIP:			44146
				BUSINESS PHONE:		2162923800
</BUSINESS-ADDRESS>
</FILER>
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>e10-q.txt
<DESCRIPTION>OLYMPIC STEEL, INC.                     10-Q
<TEXT>

<PAGE>   1


================================================================================

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

                                    FORM 10-Q

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

                  For the quarterly period ended June 30, 2000
                                                 -------------

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

                         Commission File Number 0-23320
                                                -------

                               OLYMPIC STEEL, INC.
             (Exact name of registrant as specified in its charter)

                  Ohio                                     34-1245650
     ------------------------------                 -------------------------
     (State or other jurisdiction of                    (I.R.S. Employer
     incorporation or organization)                   Identification Number)

     5096 Richmond Road, Bedford Heights, Ohio               44146
     -----------------------------------------            -----------
     (Address of principal executive offices)              (Zip Code)

     Registrant's telephone number, including area code (216) 292-3800
                                                        --------------

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 the number of shares of each of the issuer's classes of common stock,
as of the latest practicable date:

                  Class                      Outstanding as of August 3, 2000
 --------------------------------------      --------------------------------
    Common stock, without par value                    9,674,800


================================================================================




                                    1 of 35
<PAGE>   2

                               OLYMPIC STEEL, INC.
                               INDEX TO FORM 10-Q

<TABLE>
<CAPTION>
                                                                                        PAGE NO.
                                                                                       ----------

<S>                 <C>                                                                   <C>
Part I.             FINANCIAL INFORMATION

          Item 1.   FINANCIAL STATEMENTS

                    Consolidated Balance Sheets - June 30, 2000 and                            3
                      December 31, 1999

                    Consolidated Statements of Income - for the three and six
                      months ended June 30, 2000 and 1999                                      4

                    Consolidated Statements of Cash Flows - for the six
                      months ended June 30, 2000 and 1999                                      5

                    Notes to Consolidated Financial Statements                               6-8

          Item 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                    CONDITION AND RESULTS OF OPERATIONS                                     9-14


Part II.            OTHER INFORMATION

          Item 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                       15

          Item 6.   EXHIBITS AND REPORTS ON FORM 8-K                                          16

SIGNATURES                                                                                    17

EXHIBITS                                                                                    18-35
</TABLE>



                                    2 of 35
<PAGE>   3

PART I.  FINANCIAL INFORMATION

                               Olympic Steel, Inc.
                           Consolidated Balance Sheets

                                 (in thousands)

<TABLE>
<CAPTION>
                                                       June 30,     December 31,
                                                         2000           1999
                                                       ---------      ---------
                                                      (unaudited)

<S>                                                    <C>            <C>
                            Assets

Cash                                                   $   1,535      $   1,433
Accounts receivable                                       14,505          9,802
Inventories                                              114,509        119,585
Prepaid expenses and other                                 5,979          6,693
                                                       ---------      ---------

   Total current assets                                  136,528        137,513
                                                       ---------      ---------

Property and equipment                                   158,523        156,849
Accumulated depreciation                                 (37,006)       (32,645)
                                                       ---------      ---------

   Net property and equipment                            121,517        124,204
                                                       ---------      ---------

Unexpended IRB funds                                         746          1,668
Goodwill                                                   3,571          3,622
Joint venture investments and advances                      (385)           (42)
                                                       ---------      ---------

   Total assets                                        $ 261,977      $ 266,965
                                                       =========      =========

                          Liabilities

Current portion of long-term debt                      $   6,050      $   6,061
Accounts payable                                          14,131         20,671
Accrued payroll                                            3,403          3,595
Other accrued liabilities                                  6,029          5,921
                                                       ---------      ---------

   Total current liabilities                              29,613         36,248
                                                       ---------      ---------

Revolving credit agreement                                51,599         47,892
Term loans                                                26,141         29,076
Industrial revenue bonds                                  10,194         10,397
                                                       ---------      ---------

   Total long-term debt                                   87,934         87,365
                                                       ---------      ---------

Deferred income taxes                                      7,748          6,532
                                                       ---------      ---------

   Total liabilities                                     125,295        130,145
                                                       ---------      ---------

                     Shareholders' Equity

Preferred stock                                                -              -
Common stock                                             100,459        102,237
Retained earnings                                         36,223         34,583
                                                       ---------      ---------

   Total shareholders' equity                            136,682        136,820
                                                       ---------      ---------

   Total liabilities and shareholders' equity          $ 261,977      $ 266,965
                                                       =========      =========
</TABLE>



      The accompanying notes are an integral part of these balance sheets.






                                    3 of 35
<PAGE>   4








                              Olympic Steel, Inc.

                       Consolidated Statements of Income



               (in thousands, except per share and tonnage data)

<TABLE>
<CAPTION>

                                                 Three Months Ended              Six Months Ended
                                                       June 30,                      June 30,
                                               ------------------------      ------------------------
                                                  2000           1999          2000            1999
                                               ---------      ---------      ---------      ---------
                                                                     (unaudited)
<S>                                              <C>            <C>            <C>            <C>
Tons sold

   Direct                                        267,802        270,112        557,125        521,662
   Toll                                           46,949         58,513         97,624        110,937
                                               ---------      ---------      ---------      ---------
                                                 314,751        328,625        654,749        632,599
                                               =========      =========      =========      =========
Net sales                                      $ 138,962      $ 133,802      $ 283,649      $ 263,194
Cost of sales                                    108,805        100,998        219,883        200,029
                                               ---------      ---------      ---------      ---------
   Gross margin                                   30,157         32,804         63,766         63,165

Operating expenses
   Warehouse and processing                        8,593          8,937         17,062         16,911
   Administrative and general                      6,630          7,003         14,387         14,049
   Distribution                                    5,192          4,679         10,677          9,225
   Selling                                         3,138          3,882          6,495          7,642
   Occupancy                                       1,113          1,119          2,399          2,352
   Depreciation and amortization                   2,275          1,891          4,543          3,767
                                               ---------      ---------      ---------      ---------
      Total operating expenses                    26,941         27,511         55,563         53,946
                                               ---------      ---------      ---------      ---------
      Operating income                             3,216          5,293          8,203          9,219

Loss from joint ventures                            (317)          (135)          (489)          (397)
                                               ---------      ---------      ---------      ---------
   Income before financing costs and taxes         2,899          5,158          7,714          8,822

Interest expense                                   1,649            949          3,235          1,819
Receivable securitization expense                    987            784          1,834          1,476
                                               ---------      ---------      ---------      ---------
   Income before taxes                               263          3,425          2,645          5,527

Income taxes                                         100          1,319          1,005          2,128
                                               ---------      ---------      ---------      ---------
      Net income                               $     163      $   2,106      $   1,640      $   3,399
                                               =========      =========      =========      =========
      Basic and diluted income per share       $    0.02      $    0.20      $    0.17      $    0.32
                                               =========      =========      =========      =========
      Weighted average shares outstanding          9,836         10,565          9,936         10,626
                                               =========      =========      =========      =========
</TABLE>






        The accompanying notes are an integral part of these statements.





                                    4 of 35
<PAGE>   5

                               Olympic Steel, Inc.
                      Consolidated Statements of Cash Flows
                        For the Six Months Ended June 30,

                                 (in thousands)

                                                       2000          1999
                                                     --------      --------
                                                            (unaudited)

Cash flows from operating activities:
   Net income                                        $  1,640      $  3,399
   Adjustments to reconcile net income to net
      cash from (used for) operating activities-
         Depreciation and amortization                  4,543         3,767
         Loss from joint ventures                         489           397
         Long-term deferred income taxes                1,216         1,741
                                                     --------      --------
                                                        7,888         9,304

Changes in working capital:
   Accounts receivable                                 (4,703)      (10,854)
   Inventories                                          5,076        12,995
   Prepaid expenses and other                             685           403
   Accounts payable                                    (6,540)       (7,862)
   Accrued payroll and other accrued liabilities          (84)        1,410
                                                     --------      --------
                                                       (5,566)       (3,908)
                                                     --------      --------
      Net cash from operating activities                2,322         5,396
                                                     --------      --------

Cash flows from investing activities:
   Facility construction and improvements                (230)       (2,792)
   Equipment purchases and deposits                    (1,195)       (1,916)
   Other capital expenditures, net                       (350)         (876)
   Investment in joint venture                           (147)            -
                                                     --------      --------
      Net cash used for investing activities           (1,922)       (5,584)
                                                     --------      --------

Cash flows from financing activities:
   Revolving credit agreement                           3,707          (300)
   Term loans and IRB's                                (3,149)        1,117
   Repurchase of common stock                          (1,778)       (2,423)
   Proceeds from IRB issuance                               -         5,973
   Unexpended IRB funds                                   922        (5,921)
                                                     --------      --------
      Net cash used for financing activities             (298)       (1,554)
                                                     --------      --------

Cash:
   Net change                                             102        (1,742)
   Beginning balance                                    1,433         1,825
                                                     --------      --------
   Ending balance                                    $  1,535      $     83
                                                     ========      ========



        The accompanying notes are an integral part of these statements.



                                    5 of 35
<PAGE>   6



                               OLYMPIC STEEL, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2000


The accompanying consolidated financial statements have been prepared from the
financial records of Olympic Steel, Inc. (Olympic or the Company) and its
wholly-owned subsidiaries, without audit and reflect all adjustments which are,
in the opinion of management, necessary to fairly present the results of the
interim periods covered by this report. All significant intercompany
transactions and balances have been eliminated in consolidation. Investments in
the Company's joint ventures are accounted for under the equity method. Certain
amounts in the 1999 consolidated financial statements have been reclassified to
conform to the 2000 presentation.


(1) SHARES OUTSTANDING AND EARNINGS PER SHARE:

During the quarter ended June 30, 2000, the Company completed its 1 million
shares repurchase program by purchasing 266,800 shares at an average price of
$4.42 per share. The 1 million shares were purchased at an average price of
$5.86 per share. On July 28, 2000, the Company's board of directors authorized a
one-year program to purchase up to an additional 1 million shares of Olympic
common stock. Repurchased shares are held in treasury and are available for
general corporate purposes.

Earnings per share have been calculated based on the weighted average number of
shares outstanding. Basic and diluted earnings per share are the same, as the
effect of outstanding stock options is not dilutive.


(2) ACCOUNTS RECEIVABLE:

As of June 30, 2000, and December 31, 1999, $55 million and $52 million,
respectively, of receivables were sold under the Company's accounts receivable
securitization program. Receivables sold are reflected as a reduction of
accounts receivable in the accompanying consolidated balance sheets.


                                    6 of 35
<PAGE>   7


(3) LONG -TERM DEBT:

Interest rates under the Company's various credit agreements are generally based
on LIBOR plus a premium (the Premium) determined quarterly, which varies with
the Company's operating performance and financial leverage. Commencing December
1, 1999, the LIBOR Premium increased from 1.5% to 2.0%. The overall effective
interest rate for all debt for the three and six month periods ended June 30,
2000 was 8.2% and 8.1%, respectively, compared to 6.8% for both periods in 1999.

The Company did not meet a required interest coverage covenant contained in its
bank credit agreement at June 30, 2000. However, the Company and its bank group
have agreed to amend the interest coverage requirement effective June 30, 2000.

Included in the revolving credit balances on the accompanying consolidated
balance sheets are $10.7 million and $6.3 million of checks issued that have not
cleared the bank as of June 30, 2000, and December 31, 1999, respectively.


(4) STOCK OPTIONS:

During April and May 2000, additional non-qualified options to purchase 171,500
shares of common stock were issued to the Company's outside directors, executive
officers and senior managers at an option price of $4.84, the average market
value of a share of common stock at the grant date. After issuance of the new
grants, options to purchase 441,833 shares were outstanding, of which 152,011
were exercisable at prices ranging from $7.18 to $15.50 per share. Shares
available under the stock option plan were increased to 950,000 from 450,000, by
shareholder vote on April 26, 2000.


(5) JOINT VENTURE:

In February 2000, the Company advanced its 49% proportionate share, or $147
thousand, to its Trumark Steel & Processing joint venture.



                                    7 of 35
<PAGE>   8


(6) SUPPLEMENTAL CASH FLOW INFORMATION:

Interest paid during the first half of 2000 and 1999 totaled $3.2 million and
$1.9 million, respectively. Income taxes paid during the first half of 2000 and
1999 totaled $54 thousand and $159 thousand, respectively.



                                    8 of 35
<PAGE>   9


                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS


OVERVIEW

         The Company's results of operations are affected by numerous external
factors, such as general economic and political conditions, competition, steel
pricing and availability, and work stoppages by automotive manufacturers.

         Olympic sells a broad range of products, many of which have different
gross margins. Products that have more value-added processing generally have a
greater gross margin. Accordingly, the Company's overall gross margin is
affected by product mix and the amount of processing performed, as well as
volatility in selling prices and material purchase costs. The Company performs
toll processing of customer-owned steel, the majority of which is performed by
its Detroit and Georgia operations. Toll processing generally results in lower
selling prices and gross margin dollars per ton but higher gross margin
percentages than the Company's direct sales.

         The Company's two joint ventures include Olympic Laser Processing
(OLP), a company formed in April 1997 to process laser welded sheet steel blanks
for the automotive industry and Trumark Steel & Processing (TSP), a company
formed in December 1997, to support the flat-rolled steel requirements of the
automotive industry as a Minority Business Enterprise (MBE). The Company's 50%
interest in OLP and 49% interest in TSP are accounted for under the equity
method. The Company guarantees portions of outstanding debt under both of the
joint ventures' bank credit facilities. As of June 30, 2000, Olympic guaranteed
50% of OLP's $19.4 million and 49% of TSP's $2.9 million of outstanding debt on
a several basis.

         OLP constructed a new facility and has initially equipped it with two
automated laser-welding lines, which are both in production. During the second
half of 2000, two additional manual-feed lines are expected to become
operational at OLP. Start-up costs for OLP have been expensed as incurred.

         Financing costs include interest expense on debt and costs associated
with the Company's accounts receivable securitization program (the Financing
Costs). Interest rates paid by the Company under its credit agreement are
generally based on LIBOR plus a premium (the Premium) determined quarterly,
which varies based on the Company's operating performance

                                    9 of 35
<PAGE>   10


and financial leverage. Receivable securitization costs are based on commercial
paper rates calculated on the amount of receivables sold.

         The Company sells certain products internationally, primarily in Mexico
and Puerto Rico. All international sales and payments are made in United States
dollars. These sales historically involve the Company's direct representation of
steel producers and may be covered by letters of credit or trade receivable
insurance. Typically, international sales are more transactional in nature with
lower gross margins than domestic sales. Domestic steel producers generally
supply domestic customers before meeting foreign demand, particularly during
periods of supply constraints.


RESULTS OF OPERATIONS

         Tons sold decreased 4.2% to 315 thousand in the second quarter of 2000
from 329 thousand for the second quarter of 1999, but increased 3.5% in the
first half of 2000 to 655 thousand from 633 thousand last year. Tons sold in the
second quarter of 2000 included 268 thousand from direct sales and 47 thousand
from toll processing, compared with 270 thousand direct tons and 59 thousand
toll tons in the comparable period of last year. Tons sold in the first half of
2000 included 557 thousand from direct sales and 98 thousand from toll
processing, compared with 522 thousand direct tons and 111 thousand toll tons in
the first half of last year. The decrease in second quarter tons sold was
attributable to weakened customer demand for steel commencing in April 2000.
Lower demand was particularly evident in the Company's automotive,
transportation, and other service center sectors. The Company expects this
weakness in demand to continue during the second half of 2000.

         Net sales increased 3.9% to $139.0 million for the second quarter of
2000 from $133.8 million for 1999. For the first half, net sales increased 7.8%
to $283.7 million from $263.2 million. Average selling prices increased 8.4% and
4.1% for the three and six month periods, respectively, primarily due to rising
market prices for steel.

         As a percentage of net sales, gross margin decreased to 21.7% for the
second quarter of 2000 from 24.5% for 1999, and to 22.5% for the first half of
2000 from 24.0% last year. The decreases reflect supply side price increases not
fully passed on to all customers, as well as lower proportions of toll sales in
the current year periods.


                                    10 of 35
<PAGE>   11

         Operating expenses in the second quarter of 2000 decreased 2.1% to
$26.9 million from $27.5 million in the same period last year. For the six
months, operating expenses increased 3.0% to $55.6 million from $53.9 million.
As a percentage of net sales, operating expenses decreased to 19.4% for the
second quarter of 2000 from 20.6% for 1999. For the first half of 2000,
operating expenses decreased to 19.6% of net sales compared to 20.5% last year.
Operating expenses were negatively impacted in the first half of 2000 by rising
fuel costs, the effect of additional shipping days, and over $600 thousand of
strategic consulting fees. Fees associated with the strategic planning firm's
services ended in April 2000.

         Losses from joint ventures totaled $317 thousand in the second quarter
of 2000, compared to $135 thousand in 1999. For the first half of 2000, losses
from joint ventures totaled $489 thousand compared to $397 thousand last year.

         Financing Costs for the second quarter of 2000 increased to $2.6
million from $1.7 million in the second quarter of 1999. For the first half of
2000, Financing Costs increased to $5.1 million from $3.3 million. Average
borrowings outstanding in the 2000 periods increased primarily as a result of
higher inventory levels and the repurchase of the Company's common stock (the
Stock Purchase). Receivable securitization expense increased due to higher
commercial paper interest rates in the current year. The Company's effective
bank borrowing rate increased to 8.2% in the second quarter of 2000 from 6.8% in
the comparable 1999 period. For the first half of 2000, the Company's effective
borrowing rate increased to 8.1% compared to 6.8% last year. The Company's
Premium has been 2.0% since December 1, 1999.

         Income before taxes for the second quarter of 2000 decreased to $263
thousand from $3.4 million for 1999. For the first half of 2000, income before
taxes decreased to $2.6 million from $5.5 million in 1999. Income taxes
approximated 38.0% in the 2000 periods compared to 38.5% in 1999.

         Net income for the second quarter of 2000 totaled $163 thousand, or
$.02 per share, compared to $2.1 million, or $.20 per share for 1999. For the
first six months of 2000, net income totaled $1.6 million, or $.17 per share,
compared to $3.4 million, or $.32 per share in 1999. As a result of the Stock
Purchase, average shares outstanding totaled 9.8 million in the second quarter
of 2000 compared to 10.6 million in last year's second quarter. For the first
half of 2000, average shares outstanding were 9.9 million compared to 10.6 last
year.


                                    11 of 35
<PAGE>   12


LIQUIDITY AND CAPITAL RESOURCES

         The Company's principal capital requirement is to fund the purchase and
upgrading of processing equipment and services, the construction and upgrading
of related facilities, its working capital requirements, and historically its
investments in joint ventures and acquisitions. The Company uses cash generated
from operations, long-term debt obligations, equity offerings, and leasing
transactions to fund these requirements. Historically, the Company has used
revolving credit borrowings and proceeds from its accounts receivable
securitization program to finance working capital requirements.

         Net cash from operating activities primarily represents net income plus
non-cash charges for depreciation, amortization and losses from joint ventures,
as well as changes in working capital. During the first six months of 2000, $2.3
million of net cash was provided from operating activities, consisting of $7.9
million of cash generated from net income and non-cash charges offset by $5.6
million of cash used for working capital purposes.

         Working capital at June 30, 2000 increased by $5.7 million since
December 31, 1999. The increase is primarily attributable to a $4.7 million
increase in accounts receivable and a $6.5 million decrease in accounts payable,
offset by a $5.1 decrease in inventory. The accounts receivable increase is the
result of higher net sales. The decrease in accounts payable coincides with the
decrease in inventory for the six-month period.

         As of June 30, 2000, and December 31, 1999, $55 million and $52
million, respectively, of eligible receivables were sold under the Company's
accounts receivable securitization program. The amount of trade receivables sold
by the Company typically changes monthly depending upon the level of defined
eligible receivables available for sale at each month end.

         During the first half of 2000, net cash used for investing activities
totaled $1.9 million, primarily consisting of progress payments made for a new
slitter in Detroit, which is expected to become operational in the fourth
quarter of 2000, as well as expenditures for the new Chambersburg plate
processing and machining facility.

         Cash flows from financing activities primarily consisted of net
borrowings under the Company's revolving credit agreement, the Stock Purchase,
and scheduled payments under its other existing long-term agreements. On April
23, 1999, the Company's board of directors authorized a program to purchase up
to 1 million shares of Olympic common stock. In June 2000, the Company completed
the 1 million shares repurchase program at a total cost of $5.8


                                    12 of 35
<PAGE>   13

million. On July 28, 2000, the Company's board of directors authorized a
one-year program to purchase up to an additional 1 million shares of common
stock. The cost of purchasing such shares has been funded from the Company's
revolving credit facility.

The Company did not meet a required interest coverage covenant contained in its
bank credit agreement at June 30, 2000. However, the Company and its bank group
have agreed to amend the interest coverage requirement effective June 30, 2000.

         As of June 30, 2000, approximately $31.4 million in unused availability
existed under the Company's revolving credit and accounts receivable
securitization facilities. The Company believes that funds available under its
revolving credit facility, other credit and financing agreements and funds
generated from operations will be sufficient to provide the Company with the
liquidity necessary to fund its anticipated working capital, capital expenditure
requirements and the Stock Purchase over the next 12 months. Capital
requirements are subject to change as business conditions warrant and
opportunities arise. In connection with its internal and external expansion
strategies, the Company may from time to time seek additional funds to finance
other new facilities, acquisitions and significant improvements to processing
equipment to respond to customers' demands.



                                    13 of 35
<PAGE>   14


FORWARD-LOOKING INFORMATION

         This document contains various forward-looking statements and
information that are based on management's beliefs as well as assumptions made
by and information currently available to management. When used in this
document, the words "expect," "believe," "anticipate," "plan" and similar
expressions are intended to identify forward-looking statements, which are made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Such statements are subject to certain risks, uncertainties
and assumptions including, but not limited to, general business and economic
conditions; competitive factors such as the availability and pricing of steel
and fluctuations in demand, specifically in the automotive, transportation, and
other service centers markets served by the Company; work stoppages by
automotive or steel manufacturers; potential equipment malfunction; equipment
installation and facility construction delays, particularly for the new slitter
in Detroit and the laser welding lines at OLP; the successes of its joint
ventures; and the successes of the Company's ability to increase sales volumes,
improve gross margins, quality, service and inventory turns and reduce its
costs. Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially from
those expected, believed, anticipated or planned. Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak only as of
the date hereof. The Company undertakes no obligation to republish revised
forward-looking statements to reflect the occurrence of unanticipated events or
circumstances after the date hereof.



                                    14 of 35
<PAGE>   15


PART II.  OTHER INFORMATION

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

         (a)  The Company's annual meeting of shareholders was held on April 26,
              2000.

         (b)  At the annual meeting, the Company's shareholders elected David A.
              Wolfort, Martin H. Elrad, and Suren A. Hovsepian as Directors for
              a two-year term, which expires at the annual meeting of
              shareholders in 2002.

         The following tabulation represents voting for the Directors:

                                     For             Withheld Authority
                                     ---             ------------------
         David A. Wolfort         8,484,138               625,265
         Martin H. Elrad          8,479,658               629,745
         Suren A. Hovsepian       8,485,558               623,845

         (c)  At the annual meeting, the Company's shareholders ratified the
              appointment of Arthur Andersen, LLP as auditors of the Company for
              2000. The holders of 9,038,356 shares of common stock voted to
              ratify the appointment, the holders of 40,747 shares voted against
              the ratification, and the holders of 30,300 abstained.

         (d)  At the annual meeting, the Company's shareholders ratified the
              amendment of the Company's Stock Option Plan to increase the
              shares available for issuance under the Plan by an aggregate of
              500,000 shares, to 950,000 shares. The holders of 8,010,236 shares
              of common stock voted to ratify the amendment, the holders of
              881,974 voted against the ratification, and the holders of 19,175
              abstained.

On May 22, 2000, the Company appointed William E. MacDonald, III to fill a
vacancy on its board of directors for a term expiring in 2001.





                                    15 of 35
<PAGE>   16




Item 6.  Exhibits and Reports on Form 8-K

         Exhibit 10.8 - Form of Management Retention Agreement for Senior
         Executive Officers of the Company.

         Exhibit 10.9 - Form of Management Retention Agreement for Other
         Officers of the Company.

         Exhibit 27 - Financial Data Schedule



                                    16 of 35
<PAGE>   17


                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized.


                                          OLYMPIC STEEL, INC.
                                          (Registrant)


Date:    August 3, 2000                   By: /s/ Michael D. Siegal
                                             -----------------------------------
                                          MICHAEL D. SIEGAL
                                          Chief Executive Officer


                                          By: /s/ Richard T. Marabito
                                             -----------------------------------
                                          RICHARD T. MARABITO
                                          Chief Financial Officer











                                    17 of 35
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.8
<SEQUENCE>2
<FILENAME>ex10-8.txt
<DESCRIPTION>EXHIBIT 10.8
<TEXT>

<PAGE>   1
                                                                    EXHIBIT 10.8
                   FORM OF MANAGEMENT RETENTION AGREEMENT FOR
                            SENIOR EXECUTIVE OFFICERS

         THIS MANAGEMENT RETENTION AGREEMENT is entered into on this 26th day of
April 2000, by and between OLYMPIC STEEL, INC. (the "Company"), and
("Employee").

                                   WITNESSETH:

         WHEREAS, Employee is an executive officer of the Company and an
integral part of its management;

         WHEREAS, the Company desires to assure itself of continuity of
management in the event of any threatened or actual Change in Control (as
hereafter defined);

         WHEREAS, the Company desires to provide inducements for Employee not to
engage in activity competitive with the Company;

         WHEREAS, the Company desires to assure itself, in the event of any
threatened or actual Change in Control, of the continued performance of services
by Employee on an objective and impartial basis and without distraction by
concern for his employment status and security; and

         WHEREAS, Employee is willing to continue in the employ of the Company
but desires assurance that his responsibilities and status as an executive of
the Company will not be adversely affected by any threatened or actual Change in
Control.

         NOW, THEREFORE, the Company and Employee agree as follows:

         1. OPERATION OF AGREEMENT. This Agreement shall be effective and
binding immediately upon its execution, but, anything in this Agreement to the
contrary notwithstanding, this Agreement shall not be operative unless and until
there has been a Change in Control while Employee is in the employ of the
Company. The term "Change in Control" shall mean, but not be limited to: (a) the
first purchase of shares pursuant to a tender offer or exchange (other than a
tender offer or exchange by the Company and/or any affiliate thereof) for all or
part of the Company's Common Shares of any class or any securities convertible
into such Common Shares and Employee has elected not to tender or exchange his
Common Shares; (b) the receipt by the Company of a Schedule 13D or other advice
indicating that a person is the "beneficial owner" (as that term is defined in
Rule 13d-3 under the Securities Exchange Act of 1934) of twenty percent (20%) or
more of the Company's Common Shares calculated as provided in paragraph (d) of
said Rule 13d-3; (c) the date of approval by shareholders of the Company of an
agreement providing for any consolidation or merger of the Company in which the
Company will

<PAGE>   2

not be the continuing or surviving corporation or pursuant to which
shares of capital stock, of any class or any securities convertible into such
capital stock, of the Company would be converted into cash, securities, or other
property, other than a merger of the Company in which the holders of common
stock of all classes of the Company immediately prior to the merger would have
the same proportion of ownership of common stock of the surviving corporation
immediately after the merger; (d) the date of approval by shareholders of the
Company of any sale, lease, exchange, or other transfer (in one transaction or a
series of related transactions) of all or substantially all the assets of the
Company; (e) the adoption of any plan or proposal for the liquidation (but not a
partial liquidation) or dissolution of the Company; or (f) the date (the
"Measurement Date") on which the individual who at the beginning of a two
consecutive year period ending on the Measurement Date, ceases, for any reason,
to constitute at least a majority of the Board of Directors of the Company,
unless the election, or the nomination for election by the Company's
shareholders, of each new director during such two-year period was approved by
an affirmative vote of the directors (including Employee) then still in office
who were directors at the beginning of said two-year period. Notwithstanding the
foregoing, if (i) any person's ownership interest in the Company increases to
20% or more, solely as a result of the Company repurchase of its shares, or (ii)
Michael D. Siegal increases his ownership interest to 20% or more, such
ownership shall not be considered a Change in Control for purposes of
subparagraph (b) above.

         Upon the occurrence of a Change in Control while Employee is in the
employee of the Company, this Agreement shall become operative.

         2. EMPLOYMENT, CONTRACT PERIOD.

            (a) Subject to the terms and conditions of this Agreement, upon the
occurrence of a Change in Control, the Company shall continue to employ Employee
and Employee shall continue in the employ of the Company for the period
specified in paragraph 2(b) (the "Contract Period"), in the position and with
the duties and responsibilities set forth in Section 3.

            (b) The Contract Period shall commence on the date of occurrence of
a Change in Control and, subject only to the provisions of Section 5 and of
Section 6 below, shall continue for a period of two (2) years to the close of
business on the second anniversary of such date.

         3. POSITION, RESPONSIBILITIES, DUTIES. At all times during the Contract
Period, Employee shall hold the position and have the duties and
responsibilities held by Employee as (CEO) or (COO) of the Company (Employee's
position as of the date of this Agreement) or such other position,
responsibilities, and duties as Employee may have had immediately before the
Change in Control occurred, or to which the Company and Employee may agree in
writing. Throughout the Contract Period, Employee shall devote

<PAGE>   3

substantially all of his time and attention during normal business hours to the
business and affairs of the Company, consistent with past practice, except for
reasonable vacations and periods of illness or incapacity, but nothing in this
Agreement shall preclude Employee from devoting reasonable periods of time to
charitable and community activities, and from managing his personal investments.

         4. COMPENSATION DURING CONTRACT PERIOD.

            (a) During the Contract Period, the Company shall pay Employee: (i)
a salary at a rate not less than Employee's base salary in effect immediately
before the occurrence of a Change in Control, or such higher rate as may be
determined from time to time by the Board of Directors of the Company, and (ii)
bonuses in amounts which are not less than the amounts Employee would have
received during the Contract Period if the determination of bonuses during the
Contract Period was made on the same basis as in effect immediately before the
occurrence of a Change in Control. Payments of direct compensation pursuant to
this paragraph 4(a) shall be made periodically on the same schedule as in effect
immediately before the occurrence of a Change in Control.

            (b) During the Contract Period, Employee shall be and continue to be
a full participant in any and all benefit plans in which executives of the
Company participate and which are in effect immediately before the occurrence of
the Change in Control, including, without limitation, the Employees' 401(k)
Plan, Profit Sharing Plan, automobile allowance, country club dues and any group
insurance, medical, dental, hospitalization or life insurance, disability
insurance and other employee benefit plans, programs, or arrangements or any
equivalent successor plans, programs, or arrangements that may thereafter be
adopted by the Company and provide Employee at least the same reward
opportunities that were provided to him immediately before the occurrence of
such Change in Control (collectively, "Employee Benefits"). Nothing in this
Agreement shall impair or diminish the ability of the Company to modify, amend
or eliminate any Employee Benefit prior to a Change in Control.

            (c) During the Contract Period Employee shall be entitled to
perquisites, including, without limitation, an office, secretarial and clerical
staff, in each case at least equal to those attached to his office immediately
before the occurrence of the Change in Control, as well as to reimbursement,
upon proper accounting, of reasonable expenses and disbursements incurred by him
in the course of his duties.

         5. EFFECT OF DEATH OR DISABILITY.

            (a) If Employee dies during the Contract Period, the Company shall
pay Employee's designated beneficiary (or, in the event of the decease of or
failure to designate a beneficiary, Employee's personal representative) the base
salary, provided for

<PAGE>   4

in paragraph 4(a) above for a 12-month period commencing with the date of death,
but without prejudice to any payments otherwise due Employee in respect of his
death.

            (b) If, during the Contract Period and before his employment
hereunder is otherwise terminated, Employee is prevented due to illness or
accident from performing his duties under this Agreement for a period of six
consecutive months, the Contract Period shall be deemed to end at the end of
such six month period, but without prejudice to any payments otherwise due
Employee in respect of his disability. During the period of any such disability
before the end of the Contract Period, the Company shall pay Employee the
compensation provided for in Section 4, at the rate being paid at the onset of
the disability, reduced by any payments paid to Employee for the same period
because of disability under any disability or pension plan of the Company. If
employee recovers from his disability before the end of the Contract Period, he
shall be reinstated as an active employee for the remainder of the Contract
Period under and subject to all of the terms of this Agreement.

         6. TERMINATION FOLLOWING A CHANGE IN CONTROL. Following a Change in
Control, Employee's employment may be terminated during the Contract Period:

            (a) by the Company for "cause." For purposes of this Agreement,
"cause" means Employee (i) is convicted of a felony, a crime of moral turpitude
or any crime involving the Company (other than pursuant to actions taken at the
direction or with the approval of the Board of Directors); (ii) is found by
reasonable determination of the Board of Directors made in good faith, to have
engaged after the Change-in-Control in (A) willful misconduct, (B) willful or
gross neglect, (C) fraud, (D) misappropriation, or (E) embezzlement in the
performance of his duties hereunder; or (iii) breaches in any material respect
the terms and provisions of this Agreement and fails to cure such breach within
ten days following written notice from the Company specifying such breach. The
Company may terminate the Employee's employment hereunder on written notice
given to the Employee at any time following the occurrence of any of the events
described in clauses (i) and (ii) above and on written notice given to the
Employee at any time not less than 30 days following the occurrence of any of
the events described in clause (iii) above. The Employee shall have no right to
receive any compensation or benefit hereunder on and after the effective date of
the notice provided in the preceding sentence other than salary, bonus and other
benefits earned and accrued, and reimbursement under this Agreement for expenses
incurred, prior to the effective date of such notice.

            (b) by Employee (i) for any reason, or no reason, within the
twelve-month (12) period commencing with the date of the Change in Control or
(ii) for "good reason" at any time during the balance of the Contract Period.
For purposes of this Agreement, "good reason" shall mean the occurrence of any
of the following:

<PAGE>   5

            (i) any reduction in aggregate direct remuneration, or any material
         reduction in position, responsibilities, or duties provided for
         pursuant to this Agreement or in the aggregate of Employee Benefits,
         perquisites, or fringe benefits provided for pursuant to this
         Agreement;

            (ii) any good faith determination by Employee that, as a result of a
         Change in Control, he is unable to carry out the responsibilities,
         duties, authorities, powers, or functions attached to his position as
         contemplated by this Agreement;

            (iii) imposition by the Company of any requirement that Employee's
         principal place of work be relocated to a place more than 25 miles from
         Employee's principal place of work immediately before a Change in
         Control or that Employee travel in connection with his employment to a
         significantly greater degree than was customary for Employee
         immediately before a Change in Control; or

            (iv) any liquidation, dissolution, consolidation, or merger of the
         Company or transfer of all or a significant portion of its assets
         unless a successor or successors (by merger, consolidation, or
         otherwise) to which all or a significant portion of its assets have
         been transferred shall have assumed all of the duties and obligations
         of the Company under this Agreement.

Termination by Employee for good reason as provided in paragraph 6(b) shall not
be deemed a voluntary termination of employment by Employee for purposes of this
Agreement, any plan, practice, benefit, or arrangement of the Company, or any
other agreement between Employee and the Company.

         7. SEVERANCE COMPENSATION. If, following the occurrence of a Change in
Control and during the Contract Period, the Company terminates Employee's
employment other than for cause pursuant to paragraph 6(a) above or Employee
terminates his employment pursuant to paragraph 6(b) above (the effective date
of any such termination being hereafter referred to as the "Termination Date"),
then, subject to Employee's obligations with respect to non-competition
(paragraph 9), the Company shall, as severance pay, pay to Employee and provide
him and his dependents, beneficiaries, and estate with the following:

         (a) a lump-sum payment, payable within thirty (30) days after the
Termination Date, equal to 2.99 times the average of the last three full
calendar years' Base Salary, Bonus and dollar value of all Employee Benefits
(other than medical, dental, disability and life insurance coverage); and

<PAGE>   6

            (b) during a two-year period after the date of termination of
         employment, Employee and his dependents, beneficiaries, and estate
         shall continue to be entitled to the medical, dental, disability and
         life insurance coverage referred to in paragraph 4(b) and the
         perquisites referred to in paragraph 4(c) as if Employee's employment
         were not terminated and continued through the end of such two-year
         period.


         8. LIMITATION ON PAYMENTS. Notwithstanding any other provision of this
Agreement, in the event that any payment or benefits provided by the Company (or
an affiliate) to the Employee under or outside of the terms of this Agreement
would constitute a "parachute payment" within the meaning of Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code"), the payments or benefits
provided hereunder shall be reduced to the extent necessary so that no portion
thereof shall be subject to the excise tax imposed by Section 4999 of the Code,
but only if, by reason of such reduction, the Employee's net after tax benefit
shall exceed the net after tax benefit if such reduction were not made. "Net
after tax benefit" for purposes of this paragraph 8 shall mean the sum of:

            (i)   the total amount payable to the Employee under this Agreement,
                  PLUS

            (ii)  all other payments and benefits which the Employee receives or
                  is then entitled to receive from the Company and any of its
                  affiliates that would constitute a "parachute payment" within
                  the meaning of Section 280G of the Code, LESS

            (iii) the amount of federal income taxes payable with respect to the
                  payments and benefits described in clauses (i) and (ii) above
                  calculated at the maximum marginal income tax rate for each
                  year in which such payments and benefits shall be paid to the
                  Employee (based upon the rate in effect for such year as set
                  forth in the code at the time of the first payment of the
                  foregoing), LESS

            (iv)  the amount of excise taxes imposed with respect to the
                  payments and benefits described in clauses (i) and (ii) above
                  by Section 4999 of the Code.

         All calculations under this paragraph 8 shall be made by the Company in
consultation with its outside auditors, whose fees shall be paid by the Company.

         9. NON-COMPETITION. During a period ending two (2) years following the
Termination Date, if Employee is receiving payments under paragraph 7(a),
Employee shall not take a management position with (i) any steel service center
or distributor within those portions of the United States wherein the Company is
conducting business on the

<PAGE>   7

Termination Date, or (ii) a business engaged in direct competition with any
other significant business carried on by the Company on the Termination Date,
nor shall he become a principal of or assume control of a business which so
engages in competition on or after the Termination Date; provided, however, that
in no event shall ownership of less than five percent (5%) of the equity of a
corporation, limited liability company or other business entity, standing alone,
be deemed competition with the Company within the meaning of this paragraph 9.
The sole remedy of the Company for breach of this non-competition covenant shall
be the forfeiture of the payments called for under paragraph 7.

         10. EMPLOYMENT RIGHTS. Nothing expressed or implied in this Agreement
shall create any right or duty on the part of the Company or Executive to have
Employee remain in the employ of the Company before any Change in Control.

         11. WITHHOLDING. The Company may withhold from any amounts payable
hereunder, all federal, state, city, or other taxes as may be required pursuant
to any applicable law, or government regulation or ruling.

         12. LEGAL FEES. The Company shall pay and be solely responsible for any
and all attorneys' fees and related fees and expenses incurred by Employee as a
result of any claim, action, or proceeding arising out of the enforcement of, or
any challenge to the validity or enforceability of, this Agreement or any
provision hereof; provided, however, that the Company shall not be obligated to
pay any attorneys' fees or related fees and expenses incurred by Employee in
bringing an unsuccessful action to enforce this Agreement.

         13. NOTICES. For purposes of this Agreement, all communications
provided for herein shall be in writing and shall be deemed to have been duly
given (i) when given by personal delivery, (ii) one business day after being
sent by overnight courier service, or (iii) five business days after being
mailed by U.S. registered or certified mail, return receipt request, postage
prepaid, to the addresses set forth below:

         If to Company:       Olympic Steel, Inc.
                              5096 Richmond Road
                              Bedford, Ohio  44146

         If to Employee:

         with a copy, in any
         case to:             Marc H. Morgenstern, Esq.
                              Kahn, Kleinman, Yanowitz & Arnson Co., L.P.A.
                              1301 East Ninth Street, Suite 2600
                              Cleveland, Ohio 44114

<PAGE>   8

         14. GENERAL PROVISIONS.

            (a) There shall be no right of set-off or counterclaim in respect of
any claim, debt, or obligation against any payment to Employee provided for in
this Agreement, other than as specifically provided in paragraph 9 above.

            (b) This Agreement contains the entire agreement between the parties
with respect to the subject matter hereof and supersedes all prior agreements,
written or oral, with respect thereto. This Agreement may be amended,
superseded, canceled, renewed or extended, and the terms hereof may be waived,
only by a written instrument signed by the parties or, in the case of a waiver,
by the party waiving compliance. No delay on the part of any party in exercising
any rights, power or privilege hereunder shall operate as a waiver thereof, nor
shall any waiver on the part of any party of any such right, power or privilege
nor any single or partial exercise of any such right, power or privilege,
preclude any other or further exercise thereof or the exercise of any other such
right, power or privilege.

            (c) This Agreement shall be governed by and construed in accordance
with the laws of the State of Ohio without regard to principles of conflict of
law.

            (d) In the event that any provision or portion of this Agreement
shall be determined to be invalid or unenforceable for any reason, the remaining
provisions of this Agreement shall remain in full force and effect to the
fullest extent permitted by law. In the event that any provision hereof shall be
determined to be invalid or unenforceable, the parties will negotiate in good
faith to replace such provision with another provision which will be valid or
enforceable which is as close as practicable to the provision held invalid or
unenforceable.

            (e) This Agreement shall be binding upon and inure to the benefit of
Employee, his heirs, and legal representative, the Company, and any successor
organization or organizations which shall succeed to substantially all of the
business and property of the Company, whether by means of merger, consolidation,
acquisition of substantially all of the assets of the Company or otherwise,
including by operation of law.

<PAGE>   9

         IN WITNESS WHEREOF, the Company and Employee have executed this
Agreement on the day and year first above written.

                                    OLYMPIC STEEL, INC.


                                    By:
                                        ----------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------



                                    --------------------------------------
                                    Employee


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.9
<SEQUENCE>3
<FILENAME>ex10-9.txt
<DESCRIPTION>EXHIBIT 10.9
<TEXT>

<PAGE>   1
                                                                    EXHIBIT 10.9

                       MANAGEMENT RETENTION AGREEMENT FOR
                                 OTHER OFFICERS

         THIS MANAGEMENT RETENTION AGREEMENT is entered into on this 26th day of
April, 2000, by and between OLYMPIC STEEL, INC. (the "Company"), and
("Employee").

                                   WITNESSETH:

         WHEREAS, Employee is an officer of the Company and an integral part of
its management;

         WHEREAS, the Company desires to assure itself of continuity of
management in the event of any threatened or actual Change in Control (as
hereafter defined);

         WHEREAS, the Company desires to provide inducements for Employee not to
engage in activity competitive with the Company;

         WHEREAS, the Company desires to assure itself, in the event of any
threatened or actual Change in Control, of the continued performance of services
by Employee on an objective and impartial basis and without distraction by
concern for his employment status and security; and

         WHEREAS, Employee is willing to continue in the employ of the Company
but desires assurance that his responsibilities and status as an executive of
the Company will not be adversely affected by any threatened or actual Change in
Control.

         NOW, THEREFORE, the Company and Employee agree as follows:

         1. OPERATION OF AGREEMENT. This Agreement shall be effective and
binding immediately upon its execution, but, anything in this Agreement to the
contrary notwithstanding, this Agreement shall not be operative unless and until
there has been a Change in Control while Employee is in the employ of the
Company. The term "Change in Control" shall mean, but not be limited to: (a) the
first purchase of shares pursuant to a tender offer or exchange (other than a
tender offer or exchange by the Company and/or any affiliate thereof) for all or
part of the Company's Common Shares of any class or any securities convertible
into such Common Shares and Employee has elected not to tender or exchange his
Common Shares; (b) the receipt by the Company of a Schedule 13D or other advice
indicating that a person is the "beneficial owner" (as that term is defined in
Rule 13d-3 under the Securities Exchange Act of 1934) of twenty percent (20%) or
more of the Company's Common Shares calculated as provided in paragraph (d) of
said Rule 13d-3; (c) the date of approval by shareholders of the Company of an
agreement providing for any consolidation or merger of the Company in which the
Company will

<PAGE>   2

not be the continuing or surviving corporation or pursuant to which shares of
capital stock, of any class or any securities convertible into such capital
stock, of the Company would be converted into cash, securities, or other
property, other than a merger of the Company in which the holders of common
stock of all classes of the Company immediately prior to the merger would have
the same proportion of ownership of common stock of the surviving corporation
immediately after the merger; (d) the date of approval by shareholders of the
Company of any sale, lease, exchange, or other transfer (in one transaction or a
series of related transactions) of all or substantially all the assets of the
Company; (e) the adoption of any plan or proposal for the liquidation (but not a
partial liquidation) or dissolution of the Company; or (f) the date (the
"Measurement Date") on which the individual who at the beginning of a two
consecutive year period ending on the Measurement Date, ceases, for any reason,
to constitute at least a majority of the Board of Directors of the Company,
unless the election, or the nomination for election by the Company's
shareholders, of each new director during such two-year period was approved by
an affirmative vote of the directors (including Employee) then still in office
who were directors at the beginning of said two-year period. Notwithstanding the
foregoing, (i) if any person's ownership interest in the Company increases to
20% or more, solely as a result of the Company repurchase of its shares, or (ii)
Michael D. Siegal increases his ownership interest to 20% or more, such
ownership shall not be considered a Change in Control for purposes of
subparagraph (b) above.

         Upon the occurrence of a Change in Control while Employee is in the
employee of the Company, this Agreement shall become operative.

         2. EMPLOYMENT, CONTRACT PERIOD.

            (a) Subject to the terms and conditions of this Agreement, upon the
occurrence of a Change in Control, the Company shall continue to employ Employee
and Employee shall continue in the employ of the Company for the period
specified in paragraph 2(b) (the "Contract Period"), in the position and with
the duties and responsibilities set forth in Section 3.

            (b) The Contract Period shall commence on the date of occurrence of
a Change in Control and, subject only to the provisions of Section 5 and of
Section 6 below, shall continue for a period of one (1) year to the close of
business on the first anniversary of such date.

         3. POSITION, RESPONSIBILITIES, DUTIES. At all times during the Contract
Period, Employee shall hold the position and have the duties and
responsibilities held by Employee as            of the Company (Employee's
position as of the date of this Agreement) or such other position,
responsibilities, and duties as Employee may have had immediately before the
Change in Control occurred, or to which the Company and Employee may agree in
writing. Throughout the Contract Period, Employee shall devote
<PAGE>   3


substantially all of his time and attention during normal business hours to the
business and affairs of the Company, consistent with past practice, except for
reasonable vacations and periods of illness or incapacity, but nothing in this
Agreement shall preclude Employee from devoting reasonable periods of time to
charitable and community activities, and from managing his personal investments.

         4. COMPENSATION DURING CONTRACT PERIOD.

            (a) During the Contract Period, the Company shall pay Employee: (i)
a salary at a rate not less than Employee's base salary in effect immediately
before the occurrence of a Change in Control, or such higher rate as may be
determined from time to time by the Board of Directors of the Company, and (ii)
bonuses in amounts which are not less than the amounts Employee would have
received during the Contract Period if the determination of bonuses during the
Contract Period was made on the same basis as in effect immediately before the
occurrence of a Change in Control. Payments of direct compensation pursuant to
this paragraph 4(a) shall be made periodically on the same schedule as in effect
immediately before the occurrence of a Change in Control.

            (b) During the Contract Period, Employee shall be and continue to be
a full participant in any and all benefit plans in which executives of the
Company participate and which are in effect immediately before the occurrence of
the Change in Control, including, without limitation, the Employees' 401(k)
Plan, Profit Sharing Plan, automobile allowance, country club dues and any group
insurance, medical, dental, hospitalization or life insurance, disability
insurance and other employee benefit plans, programs, or arrangements or any
equivalent successor plans, programs, or arrangements that may thereafter be
adopted by the Company and provide Employee at least the same reward
opportunities that were provided to him immediately before the occurrence of
such Change in Control (collectively, "Employee Benefits"). Nothing in this
Agreement shall impair or diminish the ability of the Company to modify, amend
or eliminate any Employee Benefit prior to a Change in Control.

            (c) During the Contract Period Employee shall be entitled to
perquisites, including, without limitation, an office, secretarial and clerical
staff, in each case at least equal to those attached to his office immediately
before the occurrence of the Change in Control, as well as to reimbursement,
upon proper accounting, of reasonable expenses and disbursements incurred by him
in the course of his duties.

         5. EFFECT OF DEATH OR DISABILITY.

            (a) If Employee dies during the Contract Period, the Company shall
pay Employee's designated beneficiary (or, in the event of the decease of or
failure to designate a beneficiary, Employee's personal representative) the base
salary, provided for

<PAGE>   4

in paragraph 4(a) above for a 12-month period commencing with the date of death,
but without prejudice to any payments otherwise due Employee in respect of his
death.

            (b) If, during the Contract Period and before his employment
hereunder is otherwise terminated, Employee is prevented due to illness or
accident from performing his duties under this Agreement for a period of six
consecutive months, the Contract Period shall be deemed to end at the end of
such six month period, but without prejudice to any payments otherwise due
Employee in respect of his disability. During the period of any such disability
before the end of the Contract Period, the Company shall pay Employee the
compensation provided for in Section 4, at the rate being paid at the onset of
the disability, reduced by any payments paid to Employee for the same period
because of disability under any disability or pension plan of the Company. If
employee recovers from his disability before the end of the Contract Period, he
shall be reinstated as an active employee for the remainder of the Contract
Period under and subject to all of the terms of this Agreement.

         6. TERMINATION FOLLOWING A CHANGE IN CONTROL. Following a Change in
Control, Employee's employment may be terminated during the Contract Period:

            (a) by the Company for "cause." For purposes of this Agreement,
"cause" means Employee (i) is convicted of a felony, a crime of moral turpitude
or any crime involving the Company (other than pursuant to actions taken at the
direction or with the approval of the Board of Directors); (ii) is found by
reasonable determination of the Board of Directors made in good faith, to have
engaged after the Change in Control in (A) willful misconduct, (B) willful or
gross neglect, (C) fraud, (D) misappropriation, or (E) embezzlement in the
performance of his duties hereunder; or (iii) breaches in any material respect
the terms and provisions of this Agreement and fails to cure such breach within
ten days following written notice from the Company specifying such breach. The
Company may terminate the Employee's employment hereunder on written notice
given to the Employee at any time following the occurrence of any of the events
described in clauses (i) and (ii) above and on written notice given to the
Employee at any time not less than 30 days following the occurrence of any of
the events described in clause (iii) above. The Employee shall have no right to
receive any compensation or benefit hereunder on and after the effective date of
the notice provided in the preceding sentence other than salary, bonus and other
benefits earned and accrued, and reimbursement under this Agreement for expenses
incurred, prior to the effective date of such notice.

            (b) by Employee for "good reason." For purposes of this Agreement,
"good reason" shall mean the occurrence of any of the following:

                (i) any reduction in aggregate direct remuneration, or any
            material reduction in position, responsibilities, or duties provided
            for

<PAGE>   5

            pursuant to this Agreement or in the aggregate of Employee
            Benefits, perquisites, or fringe benefits provided for pursuant to
            this Agreement;

                (ii) any good faith determination by Employee that, as a result
            of a Change in Control, he is unable to carry out the
            responsibilities, duties, authorities, powers, or functions attached
            to his position as contemplated by this Agreement;

                (iii) imposition by the Company of any requirement that
            Employee's principal place of work be relocated to a place more than
            25 miles from Employee's principal place of work immediately before
            a Change in Control or that Employee travel in connection with his
            employment to a significantly greater degree than was customary for
            Employee immediately before a Change in Control; or

                (iv) any liquidation, dissolution, consolidation, or merger of
            the Company or transfer of all or a significant portion of its
            assets unless a successor or successors (by merger, consolidation,
            or otherwise) to which all or a significant portion of its assets
            have been transferred shall have assumed all of the duties and
            obligations of the Company under this Agreement.

Termination by Employee for good reason as provided in paragraph 6(b) shall not
be deemed a voluntary termination of employment by Employee for purposes of this
Agreement, any plan, practice, benefit, or arrangement of the Company, or any
other agreement between Employee and the Company.

         7. SEVERANCE COMPENSATION. If, following the occurrence of a Change in
Control and during the Contract Period, the Company terminates Employee's
employment other than for cause pursuant to paragraph 6(a) above or Employee
terminates his employment pursuant to paragraph 6(b) above (the effective date
of any such termination being hereafter referred to as the "Termination Date"),
then, subject to Employee's obligations with respect to non-competition
(paragraph 9), the Company shall, as severance pay, pay to Employee and provide
him and his dependents, beneficiaries, and estate with the following:

                (a) a lump-sum payment, payable within thirty (30) days after
the Termination Date, equal to one (1) times the average of the last three full
calendar years' Base Salary, Bonus and dollar value of all Employee Benefits
(other than medical, dental, disability and life insurance coverage); and

                (b) during a one-year period after the date of termination of
employment, Employee and his dependents, beneficiaries, and estate shall
continue to be

<PAGE>   6
 entitled to the medical, dental, disability and life insurance coverage
referred to in paragraph 4(b) and the perquisites referred to in paragraph 4(c)
as if Employee's employment were not terminated and continued through the end of
such one year period.


         8. LIMITATION ON PAYMENTS. Notwithstanding any other provision of this
Agreement, in the event that any payment or benefits provided by the Company (or
an affiliate) to the Employee under or outside of the terms of this Agreement
would constitute a "parachute payment" within the meaning of Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code"), the payments or benefits
provided hereunder shall be reduced to the extent necessary so that no portion
thereof shall be subject to the excise tax imposed by Section 4999 of the Code,
but only if, by reason of such reduction, the Employee's net after tax benefit
shall exceed the net after tax benefit if such reduction were not made. "Net
after tax benefit" for purposes of this paragraph 8 shall mean the sum of:

                (i) the total amount payable to the Employee under this
            Agreement, PLUS

                (ii) all other payments and benefits which the Employee receives
            or is then entitled to receive from the Company and any of its
            affiliates that would constitute a "parachute payment" within the
            meaning of Section 280G of the Code, LESS

                (iii) the amount of federal income taxes payable with respect to
            the payments and benefits described in clauses (i) and (ii) above
            calculated at the maximum marginal income tax rate for each year in
            which such payments and benefits shall be paid to the Employee
            (based upon the rate in effect for such year as set forth in the
            code at the time of the first payment of the foregoing), LESS

                (iv) the amount of excise taxes imposed with respect to the
            payments and benefits described in clauses (i) and (ii) above by
            Section 4999 of the Code.

         All calculations under this paragraph 8 shall be made by the Company in
consultation with its outside auditors, whose fees will be paid by the Company.

         9. NON-COMPETITION. During a period ending one (1) year following the
Termination Date, if Employee is receiving payments under paragraph 7(a),
Employee shall not take a management position with (i) any steel service center
or distributor within those portions of the United States wherein the Company is
conducting business on the Termination Date, or (ii) a business engaged in
direct competition with any other significant business carried on by the Company
on the Termination Date, nor shall he

<PAGE>   7

become a principal of or assume control of a business which so engages in
competition on or after the Termination Date; provided, however, that in no
event shall ownership of less than five percent (5%) of the equity of a
corporation, limited liability company or other business entity, standing alone,
be deemed competition with the Company within the meaning of this paragraph 9.
The sole remedy of the Company for breach of this non-competition covenant shall
be the forfeiture of the payments called for under paragraph 7.

         10. EMPLOYMENT RIGHTS. Nothing expressed or implied in this Agreement
shall create any right or duty on the part of the Company or Executive to have
Employee remain in the employ of the Company before any Change in Control.

         11. WITHHOLDING. The Company may withhold from any amounts payable
hereunder, all federal, state, city, or other taxes as may be required pursuant
to any applicable law, or government regulation or ruling.

         12. LEGAL FEES. The Company shall pay and be solely responsible for any
and all attorneys' fees and related fees and expenses incurred by Employee as a
result of any claim, action, or proceeding arising out of the enforcement of, or
any challenge to the validity or enforceability of, this Agreement or any
provision hereof; provided, however, that the Company shall not be obligated to
pay any attorneys' fees or related fees and expenses incurred by Employee in
bringing an unsuccessful action to enforce this Agreement.

         13. NOTICES. For purposes of this Agreement, all communications
provided for herein shall be in writing and shall be deemed to have been duly
given (i) when given by personal delivery, (ii) one business day after being
sent by overnight courier service, or (iii) five business days after being
mailed by U.S. registered or certified mail, return receipt request, postage
prepaid, to the addresses set forth below:

         If to Company:                   Olympic Steel, Inc.
                                          5096 Richmond Road
                                          Bedford, Ohio  44146

         If to Employee:
                                          --------------------
                                          --------------------

         with a copy, in any
         case to:                 Marc H. Morgenstern, Esq.
                                  Kahn, Kleinman, Yanowitz & Arnson Co., L.P.A.
                                  1301 East Ninth Street, Suite 2600
                                  Cleveland, Ohio 44114

<PAGE>   8

         14. GENERAL PROVISIONS.

             (a) There shall be no right of set-off or counterclaim in respect
of any claim, debt, or obligation against any payment to Employee provided for
in this Agreement, other than as specifically provided in paragraph 9 above.

             (b) This Agreement contains the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior
agreements, written or oral, with respect thereto. This Agreement may be
amended, superseded, canceled, renewed or extended, and the terms hereof may be
waived, only by a written instrument signed by the parties or, in the case of a
waiver, by the party waiving compliance. No delay on the part of any party in
exercising any rights, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of any party of any such right, power
or privilege nor any single or partial exercise of any such right, power or
privilege, preclude any other or further exercise thereof or the exercise of any
other such right, power or privilege.

             (c) This Agreement shall be governed by and construed in accordance
with the laws of the State of Ohio without regard to principles of conflict of
law.

             (d) In the event that any provision or portion of this Agreement
shall be determined to be invalid or unenforceable for any reason, the remaining
provisions of this Agreement shall remain in full force and effect to the
fullest extent permitted by law. In the event that any provision hereof shall be
determined to be invalid or unenforceable, the parties will negotiate in good
faith to replace such provision with another provision which will be valid or
enforceable which is as close as practicable to the provision held invalid or
unenforceable.

             (e) This Agreement shall be binding upon and inure to the benefit
of Employee, his heirs, and legal representative, the Company, and any successor
organization or organizations which shall succeed to substantially all of the
business and property of the Company, whether by means of merger, consolidation,
acquisition of substantially all of the assets of the Company or otherwise,
including by operation of law.

                     [THIS SPACE LEFT BLANK INTENTIONALLY.]

<PAGE>   9



         IN WITNESS WHEREOF, the Company and Employee have executed this
Agreement on the day and year first above written.

                                    OLYMPIC STEEL, INC.


                                    By:
                                       -----------------------------------
                                        Name:
                                        Title:


                                    --------------------------------------
                                    Employee


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-27
<SEQUENCE>4
<FILENAME>ex27.txt
<DESCRIPTION>EXHIBIT 27
<TEXT>

<TABLE> <S> <C>

<ARTICLE> 5
<MULTIPLIER> 1,000

<S>                             <C>
<PERIOD-TYPE>                   3-MOS
<FISCAL-YEAR-END>                          DEC-31-2000
<PERIOD-START>                             APR-01-2000
<PERIOD-END>                               JUN-30-2000
<CASH>                                           1,535
<SECURITIES>                                         0
<RECEIVABLES>                                   14,505
<ALLOWANCES>                                         0
<INVENTORY>                                    114,509
<CURRENT-ASSETS>                               136,528
<PP&E>                                         158,523
<DEPRECIATION>                                (37,006)
<TOTAL-ASSETS>                                 261,977
<CURRENT-LIABILITIES>                           29,613
<BONDS>                                         42,385
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<COMMON>                                       100,459
<OTHER-SE>                                      36,223
<TOTAL-LIABILITY-AND-EQUITY>                   261,977
<SALES>                                        138,962
<TOTAL-REVENUES>                               138,962
<CGS>                                          108,805
<TOTAL-COSTS>                                  108,805
<OTHER-EXPENSES>                                26,941
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                               1,649
<INCOME-PRETAX>                                    263
<INCOME-TAX>                                       100
<INCOME-CONTINUING>                                163
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                       163
<EPS-BASIC>                                        .02
<EPS-DILUTED>                                      .02


</TABLE>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
